Is the market irrational?
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New and still finding my way.
I cannot help but thinking that ultimately prices should be driven by fundamentals - i.e. the inherent value of future dividend streams? However, there are countless examples where it's difficult to rationalise current prices. Let's take Max Aarons at £1.42. Is it really clear already that he has the potential to exceed the value that somone like Andy Robertson can provide at £1.05?
If not, then what drives the price? Or is just a bubble based on hype that at some horizon will deflate?
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Bubble driven by new players
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the market is completely and utterly irrational and will probably stay that way until the amount of money coming into the platform is similiar to the amount of money going out. and i dont see that happening anytime soon.
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@LuaLua said in Is the market irrational?:
the market is completely and utterly irrational and will probably stay that way until the amount of money coming into the platform is similiar to the amount of money going out. and i dont see that happening anytime soon.
This, this and this!! But fun nonetheless.
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Ok so then a related question - do dividends increase over time?
Because as more money floods into the platform, prices rise and yields fall.
Do FI have a track record of increasing dividends?
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@CBN yea it increased them just last month
dunno how many times before that. I assume numerous
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Il have to dig out my dissertation later and bore you all with some nice quotes about market rationalisation. Some gems from Eugene Fama and Paul Samuelson 🤓
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FI is mental, it's like a crazy cyber gold rush where everyone will find "some" gold, ok FI owners are the ones selling the picks and shovels, but it's so mental at times they accidentally give you a gold shovel!
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@LuaLua that's incorrect dividends were actually reduced approx 60% across the board....were all playing for smaller dividends now
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@scfc He's either being pedantic or still doesnt get the share split.
divs relative to share prices have increased then.
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@LuaLua not being pedantic at all but to say dividends have been increased is just wrong.
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Brewster a young striker who may or may not make it as a premier league striker is pretty much the same price as sadio mane. Mane has been named in the PFA team of the year and has been linked with a 100m move to real Madrid.
It's difficult to know what to say about that really ...
So yes ..... There is no semblance of rationale to the index sometimes.
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@Don-keyballs said in Is the market irrational?:
@LuaLua not being pedantic at all but to say dividends have been increased is just wrong.
Do you understand that they have increased relative to price tho?
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@Don-keyballs said in Is the market irrational?:
@LuaLua not being pedantic at all but to say dividends have been increased is just wrong.
Eh ?
Of course they have been increased. They made a cosmetic change to prices and volumes of futures then dividends were increased. 100 quid in messi returned more after the increase than before.
Sorry but to suggest anything else is being pedantic.
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Technically you are both right.
They have increased currently as a % only, relative to the share split and current prices.
Anyone new since the SS won't have any benefit from that, other than the actual prices of players being lower.Dividends HAVE dropped, and as players price increase, will represent a drop in dividends.
That said, I fully expect them to raise dividend prices as prices of players increase, probably at a time when the market is flat.
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@Don-keyballs Sorry mate, you ain’t getting how the share split works. They’ve defo increased in relation to money invested...
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@Robert-W Only for players who held shares pre-ss
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This post is deleted!
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@CBN said in Is the market irrational?:
Ok so then a related question - do dividends increase over time?
Because as more money floods into the platform, prices rise and yields fall.
Do FI have a track record of increasing dividends?
They have increased twice.
Before PB, players were way over priced and they massively increased dividends by bringing in PB and adding triple MB leading to players being under priced.
The second increase ignoring IPD was as part of the recent share split. This was a relatively minor increase and hasn't kept up with the massive price rises across the index. The result is most players are now over priced.
There will probably be rises in future but I think the days of genuine value are gone for good. Traders will need to make money by timing their buys and sells as most players are unlikely to return their value in dividends and are hence over priced.
