Skimming investment strategy

  • I've been thinking about my overall strategy regarding possibly skimming the profit on players that are doing well - So I've got 12 high profile media type players @ £1000 value - Skim profits if they rise above this and reinvest in the below 50p range players. But I've also got 100 low cost players(0.25p - 0.60p) who I bought for £200 pound each - my thought is I might start skimming profit over £300 sales value (so the player would be in 50% profit at that stage) to buy further players & rinse and repeat in the below 50p range guys. That way your continually realizing profit and freeing up cash for further players. It does limit your chance of hitting the jackpot with a player if your taking profits that low but should we really be scoffing at 50% profit on any player that's unproven - is my thought. I also like the idea from a trading point of view - between dividends, skimming profits on the big holds & now the smaller holds...I should be earning money quick enough to keep my trading hunger on "the next big thing" satisfied.

    I think it would alleviate some concerns I'd have in the thought alot of these players prices get built up on the hope/expectation that they are the next messi - If they turn out to be just average - their prices could dwindle as quickly without actual profit realized. Or indeed...if they turn out to be shite - at least you've come out of it well by locking profits in when their hype was building.

    What ya think?

  • have been thinking exactly the same the last copule of weeks....but its alot more of a stressfull/time consuming strategy, and i decided i needed to get some work done!

  • @NewUser297399 Well you wouldn't need to continually skim the profits - once a week, once a month - whatever works!

  • Surely after a certain period you will be left with a portfolio full of players that are falling/stagnant whilst watching many of the players you sold after +10% continue to rise.

  • I would say this is a very sensible strategy. Setting a pre-defined point at which you are happy to take the profit, and sticking to it relatively rigidly will avoid you getting sentimental about certain holds and keeping for longer than you should.

    We should really be looking pragmatically at each player as a means to an end, rather than an end itself. I'm somewhat guilty of being sentimental and holding onto some players for too long, and, for example, holding more than my fair share of Spurs players simply because I'm a fan.

    Your point about selling up big players to fund lower value players is also a good strategy. Really you want to sell up for a decent profit and put the money back into a player who is no higher than your original buy price for the player you sold - that way you can buy an equal or greater number of shares and still see the same or greater incremental rises per penny on his share price. I have sold some mid-value players in the past and bought up higher value players, and having fewer shares means you make less per penny rise in price, so it feels like a waste.

  • @Chris-J Not sure why you'd think that would be the outcome tbh..?

  • @Wiillaah Simply because no matter how pragmatic you are there will always be bad buys.

    If you are planning on flipping the amount of players at 10% that would be required for this technique to be successful then you will eventually accumulate a number of stagnant/falling players - This will tie up an increasing amount of your funds as you purchase more and more players.

  • @Chris-J Not really planning on flipping anybody mate. The idea is to sell the profit value above 50% on each player to lock in profits but still hold the remaining investment in that player. I rate all the players I buy obviously but at some point you have to lock in profits - this gives me a strict method of doing that... If players I've invested in meet that 50% profit point only.

  • @Wiillaah Great strategy. Allows you to diversify your portfolio without pumping more cash in. That's the principle anyway.
    We always pump more cash in! :)

  • I think it sounds very reasonable and I've done this myself.

    You're essentially de-risking your portfolio, with the trade off being, you'll miss out on dividends, given that the more expensive players tend to earn the most dividends.

    I have kicked myself doing it though... for example, a few months back, I sold a bunch of highly profitable Kane to fund Sane and Sterling... decisions I'm happy with given their rise but a month or so later, I chose to rebuy even more Harry Kane when he became the best buy on the market... so I wish I'd just funded Sterling and Sane using money from other players.

  • Appears sound. I've started to take the profits only of players rather than exiting them as a necessity this month because the market is so volatile now and my port is more than £5k in the red but with individual players in profit. I sell the number of shares of a player equal to the profit, including the commission if I think that player has peaked. If he hasn't, and his price starts to fly, I still benefit because I haven't exited the player, although of course I have a reduced share holding in him. I bank the cash.

  • 50% profits are definitely not something to be scoffed at @Wiillaah. I highly doubt a lot of our fellow FI users have the patience to let their players get anywhere near that figure tbh.

    I've been doing something similar since the first bonus period ended and have skimmed off just over 15% of my original investment in pure profit in that time. That's solely trading profit too, I don't count my bonus payments.

    I do differ my exit ROI per player though based upon the reason I bought them.

  • The continuous skimming of profits approach de-risks your portfolio while constantly freeing up funds to invest in the next great prospect without having to find money elsewhere... Your trading profits are funding your future trades.. I'm liking it more and more tbh lol

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