Divedends do NOT drive the market in any way, shape or form.



  • Now I am sure that has your attention, let me explain why...

    I keep hearing divs drive the market. They SHOULD, I think of that there is no doubt. But they don't.

    New players drive the market. New players come along and see 1p a goal for 30 days, or a couple of pence here and there for media etc. Or 30p rise for cap appreciation.
    So new players are chasing cap app. And because we see that is what they are chasing, we then do the same. We are all forcing the prices up through this and seeing massive gains compared to divs.

    If divs drove the market, Messi wouldnt be dropping and the likes of Greenwood, and all the others wouldn't be in the top 100, let alone top 20.

    The big boys who do get divs and are top are not top because the divs drive the market, they are there because the big investors understand they should drive the market.

    Discuss...



  • I’ve never really understood chasing divs. Cap appreciation is way more profitable and divs are a side bonus. On the big money men divs are massively outweighed by drops from high prices. I’ve a lot on Griezmann and the divs are basically beer money. His drop lately far outweighs them...



  • I always find this fascinating. Dividends in many ways don't seem to be driving the market but then if divs didn't drive the market why did Kimmich's price react the way it did yesterday to a position change?



  • Capital appreciation is more profitable whilst FI is still growing. When the platform matures, dividends should come into things more.

    Part of the reason the likes of Greenwood are so expensive is because people see them as being a high dividend earner in the future and are taking a position now. Some however, will just be buying him because they are a Man U fan with very limited knowledge of anything outside of Man U.



  • I think its wrong to say that dividends to not drive the market in any way. There are recent examples where this is not true.

    A couple of examples:
    Hazard going to Madrid - People believe his MB opportunities will diminish and so we have seen his price drop
    Kimmich - Became a midfielder and so people believe his chances of PBs have diminished and so we have seen his price drop
    United Players - Anyone linked to United seems to get an increase because they have a perceived greater chance of winning MBs

    I agree that a lot of people are chasing capital appreciation, and it is a more profitable way of earning money but i still believe that in most cases the potential to win future dividends is behind that. Having said that prices don't always make sense. Youngsters with potential to be the next star are higher than players who are already stars, so there is an element of hype and cap appreciation going along with the future dividend potential.



  • But the cap ap is simply people trying to buy the next div earner, because the current div earners are expensive.

    Greenwood for instance... Man Utds next young striker with great goalscoring record at youth level. People know Utd draws great MB... Goals drive IPD and PB. So in 3 years time it's plausible he will be a good dividend earner.

    Yes... Quite a few people make bad judgements and new users fail to understand what will make a good dividend earner... But divs d drive the market... Look at the most expensive players... Pogba, neymar, messi, Salah etc... All get the most divs.

    Messi is dropping because in 3 years his div potential is decreasing while others are increasing



  • @Vespasian32

    But the cap ap is simply people trying to buy the next div earner, because the current div earners are expensive.

    I don't think this is true, they buy because they think they will rocket.

    In Greenwoods instance, if he meets all expectations he will be at same level as what, Rashford? They are almost same price. Kane rocketed and is due a fall, if Greenwood is gonna fulfil all potential he might reach Kane's level. Still not far off his price.



  • I'm of the opinion that the best method is to attack this from both angles. Obviously the safe bet is to have a solid hold of some div earners and hold them long term and reap the easy rewards, but while that money is ticking over. You may as well keep an eye out for any trends and 'jump aboard' as they say. I'm pretty sure that this is what most people do, and I don't think that either are detrimental as long as you are in for the long haul. If people think they can come on here and jump on anyone that might be trending and make a fortune, a lot are likely to get burned, and F.I could start receiving a bad name. that's the only issue I can see from new users driving a portion of the market.



  • It's not just one factor that drives the market. It's a combination of multiple factors, which is what will keep FI moving forward. Mb. PB. Newly introduced ipd's . Cap app. Ipo's.
    FI have so many new things they could also introduce should things ever go a little stale, this will keep people interested.



  • If greenwood reaches rashfords level which people seem to think he will then he will win 20p plus in divs next season mostly mb.
    That would put him in the top20 div earners instantly.
    Combine that with the fact that he's so young and you got yourself a good hold.

    Divs are the number one driver of price rises. Name me a more influential factor. @MrWh1te



  • When I came on FI Oct 18 I was only chasing cap app. I soon realized what kinda money was to be made from divs and I added div earners to my port, mainly mb stars then I started to add a few pb players too. Many ways to make money on FI so why not have a hand in all of them. My port is down this week but is diverse enough to withstand most meltdowns.
    My point is most new users will initially be looking for cap app, but in my opinion as they get used to the platform they will diversify



  • It has taken 2 months of several mistakes for me to come to realise this. Which still baffles me as it is the only thing of true value. The rest is pyramid. I don't understand how players who are unliekly to ever deliver a dividend have any money in them, if it isn't pyramid. More portfolio is up 10% recently once I started investing more irrationally!



  • @Gregolocky2018 I am similar but consider this, over the 5 moths I have been here

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    0_1558174460296_upload-e64851bb-34b1-48b1-a04d-2e0395f494aa

    0_1558174634944_upload-3c973124-6e55-4540-9c98-8a65fc357de1



  • Hmm yeah in reality the chain probably goes something like this.

    Traders chase divs and the potential of divs eg greenwood
    Other traders hop on seeing the chance for capital appreciation
    even more hop on. Unstoppable train.

    Other traders buy similiar players to greenwood eg moise bily gilmour and the latest best thing
    Other traders hop on
    Div chasers hop on because even they cant ignore the cap app in people who are essentially worthless

    The rate the market is growing at means not many people lose as prices in the long term are going up regardless of form and fi form. The state of the market means you could throw a dart at the list of players and come back in a year and be up by 30%

    I prefer to always have the potential of divs on my side. Means i'm ready when the market slows (Don't see that happening any time in the next few years tbh). Everyone is gonna win. Some traders just win more than others.
    When the season comes around people will be chasing div earners who are young eg laporte n tah n kimmich and they will see big rises I'm already set up for that.



  • @MrWh1te 2 months, with only 4 players. There's two ways of looking at it. The bigger the PF, the more safer it is but with lower growth. The smaller the PF, the more chance of faster rises, but equally faster drops. I'm prepared to gamble on a longer hold basis, but with an eye on CA than dividends, in which I have no interest at all. We'll see where I am in 12 months time %wise, compared to larger PF's.

    0_1558176488859_Screenshot_2019-05-18 Football INDEX  .png



  • But the reason greenwood rocketed and someone like oh ban suk doesn't... Is potential dividends. Our bet is 3 years and the subsequent bet from the person you hope to sell to is 3 years... So buying greenwood now isn't saying he's going to earn as many divs as kane or rashford this season... Its that in 3 years or 6 years he will earn more. You don't wait for the player to earn the divs then buy... Everyone wants to get ahead of the market.

    Cap ap gives us more money.. But cap ap is achieved by finding an undervalued player... Where the value is his future dividend potential. Might be a terrible player that likes to cause a scene and is heading to Manchester utd... So has high mb potential... Might be a 30p striker thst scores 1 in 2 and has good ipd value... Or maybe a playmaker in a non pb league is moving to PB so has a chance of divs



  • But what drives cap app? Surely it's still divs. If not the immediate dividend opportunity (in an already saturated market the highest Div-earners are too expensive) - then cap app is surely driven by a player's potential to earn dividends in future. That's why the likes of Greenwood are high already - plays for United and English. If he turns out to be half decent he'll earn plenty of MB!



  • During the year how many players win mb on average. For two months we have 5 places = 300 media divs available. If we have say a further 2 months of 3 places = 180 media divs then Approx 8 months of 1 media div available = 240 media divs available. So in a year 720 media divs available. With ,as I understand it, media available to squad as well as top 200 there will be more players winning Mb next season than previously reducing current media magnets media dividend return IMO.



  • The best way to analyse this issue is by imagining FI without any dividends. Would anyone buy anyone? No. Of course people buy players for cap app, but that cap app is driven by the potential to win divs. It may well be the case that the cap app we often see far exceeds the div potential of the player concerned, and then it is down to individual traders to decide if the player is worth it or not. It is also true that traders will buy players who they do not believe will return significant divs purely to get on board a player who has started to increase, but that increase is at base influenced by div potential as perceived by others.

    I think a more accurate statement would be:

    Cap app often does not reflect true dividend potential, and has a momentum of its own.

    This does not alter the fact that divs drive the market, as the market could not and would not exist without them.



  • At the moment the market is growing so much that it makes dividends worthless. So what I've noticed is that transfers jump up in price a whole bunch and then less and less people are willing to hold that long as it's better to sell moussa dembele so they can buy longstaff rising twenty p or buy digne whose about to rise twenty p than to hold dembele and get some divs come media madness.

    At first my temptation was to say it was because divs are too small but i think that might not actually be correct. It's just cause the rate of growth is substantial i think.

    (I think?) The way to work out if divs are too high or too small is to calculate the amount of money in the index in total and see how much Fi give out in dividends.
    If they give out over 3% of the total amount of money in the index in divs then they are probably priced about right. (That's better than a bank i think)Obviously i'd like more if they have it)


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