So when IS was withdrawn I decided to de-risk a little and sell around a quarter of my portfolio. I got pretty good prices for it, especially in the run up to the new divs announcement. Since then I've fluctuated a bit, selling off little chunks here and there, as well as putting some money in when I got a 10% deposit bonus.

Any way today is a historic day for me. My net deposits in FI are now zero. My entire portfolio is effectively profit from trading.

I know a lot of you think it's a bad time to sell and you've probably been gobbling up my shares. Fair play to you, however I'm now in a very comfortable place where, if this all goes wrong, I've not lost a penny, I really am just playing with paper profit.

Despite all the negativity right now I don't know any other platform I could have done this on so cheers FI.

First off, apologies this is a long post. It's also a bit rambling. If you can't be bothered to read it all, the main point is that the ME probably isn't as bad as I first feared, but it's still not for me. It's sufficiently not for me that I'm taking the majority of my money out of FI.

So about a month ago I said in a post that I felt the changes brought in with the ME had made FI a little too risky for my tastes. I also said I was looking to de-risk by selling about 75% of my portfolio over the next three months, essentially bringing it down from £16K to around £4K.

I've now had around 50% of my portfolio up for sale for around a month and I've been able to sell and withdraw £4.5K. So pretty much on track for a 75% reduction over 3 months. All of these sales have been to the Market, not via the Instant Sell option.

Obviously there are some players that just aren't shifting and I probably need to accept that I'm going to have to IS them at some stage. Probably after the selling side of order books gets introduced. However some players have proven to be pretty easy to sell at Market Value, although still harder than before.

I suppose the point of this post is just to share my experience in trying to shrink my particular portfolio (I appreciate that every portfolio is unique, mine was mainly focused on top and mid price players with very few bottom of the barrel punts) and take money out. It's not been great, but it's not been awful either, much like many things in life both the doomsayers and the boosters aren't correct and the middle ground is probably right in most instances. I would however say that 3 months seems about right to sell a portfolio of this size without taking a huge hit (although the introduction of Goal Keepers may throw a spanner in the works). Something that people now need to keep in mind when putting money in.

For me FI is too illiquid to have a large sum of money tied up in it. It's a shame as the withdrawals I've made now have my actual investment in FI at £2.5K, while my portfolio has a Market Value of £12K, so I've obviously done very nicely. Even recently, my return solely on dividends in the last 90 days is 2.28% (so 9.14& over a year). Way higher than I can get elsewhere, but I'm not in a position to be able to have £16K I need to give 3 months notice to be able to access. £5K is probably about the level I'm comfortable at. If the level of liquidity rises considerably with the introduction of sell orders I may look at reinvesting, although I'll be honest my confidence in the product as a whole has been shaken by the number of rapid changes we've experienced.

Take from this post what you will. To get me to reinvest of a larger scale I suppose I'd be looking for better stability in terms of the rules and better liquidity in terms of the ability to cash out. However I appreciate that these things may not accord with FI's business model and I may just have to accept that for me personally FI isn't for me anymore, although I will keep a small interest in it.

For those of you who stay the course, I'm sure you will be rewarded long term. All the best.

I think it's clear that FI massively underestimated the impact that the introduction of ME would have on liquidity and therefore also underestimated the amount of money that would need to be introduced via the market makers like LP1.

I'd even potentially argue that LP1 is harming liquidity as people are reluctant to accept bids via the ME when there is the chance of winning the LP1 lottery and having him pay full price for your players.

The whole problem is that the ME basically down valued all of the players, however the side of the site which shows you your value of your portfolio is basically still working using the old system. So people believe the value their players are worth the Market Value when realistically that's only obtainable in a very small number of cases.

The sooner FI update the way player values are displayed the better, at that point things might start moving again. Of course everyone will suddenly see their portfolios in the red and won't be happy with a 20 to 40% loss, but realistically you've already suffered that loss, it's just not displayed at the moment.

There are definitely cycles but the current issue is pretty much unprecedented. That's because it's caused by a combination of factors rather than one single factor. These are:

1. Covid-19 - Nothing FI could have done about this and I think they handled it well. The temporary removal of IS kept money in the platform and protected the value of people's portfolios. Yes it sucked if you needed to get your money out but I don't know what else FI could have done here. However the knock on effects of Covid-19 are still being felt. Firstly there are people who have wanted to withdraw for three months who are still trying to do so, secondly a lot of people are struggling financially, which means less new money coming in. On its own this would have seen a drop in values.

2. The removal of IS and the poor implementation of the ME - FI switched from a temporary removal of IS to a permanent one. This lead to a loss in confidence for many traders who felt the goal posts had been moved. I cashed in about 25% of my portfolio and I did intend to cash in more over the next few months but will probably hold for a little longer. What I won't be doing however is putting any new money into the platform. FI were always pretty clear that IS would always be an option and I feel like they breached my trust. If they can make this change what other changes could they make? A lot of people will feel I'm over reacting but this is a personal thing and I'm sure I'm not the only one who felt this way. Could FI have handled this better? I would say yes, while the removal of IS was not doubt necessary for them as far as their business plan it wasn't communicated well. This must have been planned for a long time and could have been far better communicated.

3. High expectations on the new Dividend Structure - Some people thought the new dividend structure was going to see massive increases to the pay outs. As a result certain players sky rocketed. They are then retracting due to people's expectations not being fulfilled. Unfortunately, if you bought during this short boom you were going to lose money regardless as to what else was going on. This isn't completely FI's fault, you could argue they over hyped the new structure, leading people to jump to these conclusions. Personally I wasn't expecting much in the way of an increase so I didn't buy into it but I sympathise with those who did.

4. The introduction of a new player category. FI introduced goal keeper dividends. This saw a lot of new players essentially become targets for purchasing, unless new money comes into the system this is going to see other players drop as funds get spread over more targets. Unfortunately, due to the other factors listed above, there was unlikely to be sufficient new money to mitigate this. Could FI have handled this better, I would say yes, I don't think this was the appropriate time to introduce GK's. There was too much else going on. The GK's should have been announced in advance to allow a slower pile on and it should have been done during a boom time when new money was coming in, ideally in conjunction with an offer for new money put in and spent on GK's.

So it's been a quadruple whammy and that's lead to the current situation. One of these was unavoidable, two are definitely FI's fault and one is slightly FI's fault. In the face of all the above factors the introduction of liquidity providers is a drop in the ocean.

They'll be several stages to the recovery.

1. People who are disgruntled get their money out. Once they've gone they've gone and the that's that. Unfortunately, due to the lack of liquidity this may take a while. Also, due to the falls, there may be more people joining this group. I'd guess 6 months for this to completely shakedown, but the major impact will probably be done in 3.

2. The new season starts. This will likely lead to new money coming in, especially if it happens in conjunction with an offer and new advertising.

3. Covid-19 is sorted, people can start going to games again and interest in football picks up in general. No idea how long this will take.

4. The economy recovers from Covid and people have more money. This will be a slow process, for some people it will be happening already as they are unfurloughed and back at work. For some it may be 12 months or so, for my industry probably about 3 years. However this isn't just something that is going to impact FI.

5. FI intervene - No idea when this may happen or how effective it will be.

So, I would expect drops for at least a few more weeks, followed by a leveling off, a decent bump at the start of the new season and a slow but stead rise over the next 12 months. Realistically though if you bought in at the height of the pre announcement boom I reckon it's at least 12 months before you see a full recovery.

A lot of the above is speculation so I could be completely wrong. Just my thoughts though.

@Stevo

Increased liquidity helps by reducing risk. A reduced risk means you can buy at a lower yield. If income from dividends stays the same then a lower yield means a higher price.

So as an example; when IS existed people may have felt that this was relatively low risk and may have been happy to achieve a yield of around 5% to 7.5%, So a player who returned a yield of £1 in a year could be worth around £13 to £20.

With the removal of IS the risk of not being able to get out of a player had increased, so people would want a higher yield to compensate for the increased risk. If people now want a yield of say 15% to 20% that player is now worth £5 to £6.66.

However as prices fall and liquidity drops people might be revising that yield upwards even more as the risk continues to grow. That 15 to 20% now becomes 25%. So that same player is only worth £4.

If liquidity improves then risk decreases and as a result required yields drop and that player's value goes back up.

I think the reason not much trading is happening is because people want the best value, both when buying and selling. I'm as guilty of this as anyone.

I've got loads of players listed for sale, but they are all listed at Market Value, I'm not selling any using the Instant Sale option as I'm in no rush. Equally, I have some bids in for a few players I want to top up on, guess what I'm bidding below MV for them.

If pretty much everyone is taking this approach, only wanting to sell at MV and only wanting to buy at less than MV you're going to get a stagnant market. The market needs to shift either to a buyers market, with sellers realising that in the majority of cases they can't get MV any more, or a sellers market with buyers getting fed up with chasing bargains that aren't there in a lot of cases and paying MV or very close to it for players.

Not sure what will trigger the shift and as someone who is selling more than they are buying I hope it's a shift to a sellers market, but until the shift happens I think this is going to continue.

One of the issues with the market at the moment is the upcoming international break. Players are only IPD eligible for a month, so why buy when they are going to miss a good chunk of that month.

Instead would it be better if they were IPD eligible for a set number of their teams games, say 5? That way it removes the issues around international breaks or the close season. Appreciate it also removes the ability to pick a player who has a particularly busy schedule coming up but overall it probably provides a bit more stability over the course of the year.

What are people's thoughts?

Couldn't agree with Ericali more.

The ceiling on buying youngsters is very high, if you pick up the next big thing you can easily see returns of 200-300%. However the vast majority of youngsters won't be the next big thing.

Previously the floor was also pretty high as you could sell back the house, maybe you'd lose 10% or so but that meant you really only needed a strike rate of 1 in 10 and you'd still make a profit.

Now the floor on youngsters is much lower and the failed ones will sell for much less, or may even be unsellable. As a result you need a much better ratio of hits to misses to profit.

There is a certain amount of price memory factored into youth players at the moment and I think this makes them overpriced for the risk. Eventually I think this will fade and they'll start to be available at a lot less, at that point the return on the one that hits will be sufficient to warrant picking them up again.

For me the value is currently elsewhere on less risky players who are going to be returning PB in the near future.

I tend to think of these players as being like gold, during uncertain times gold values soar as it's a safe haven and that's what I think PB players are at the moment. Whereas youth players are more like Tech stocks. Sure if you buy Amazon early on you're laughing, but for every success story there are plenty of complete failures.

@Yellow

"You put your money in a gambling platform and you have to take responsibility for it and be able to face the prospect of losing it all. You have a duty to understand the rules and upcoming changes."

The problem was that a lot of people did put their money in and understood the rules at the time and made their bets accordingly. Due to Covid (completely outside of FI's control obviously) there was never a reasonable period to close those bets before the new system came in. FI rushed the OB system, which not only resulted in poor implementation but also resulted in all those who had wanted to sell for months and months all rushing to get out at the same time. There needed to be a period to allow an orderly exit for those who wanted out, which would of had the added bonus of actually allowing the OB's to be implemented properly.

Excellent post.

I can only speak for myself but I wouldn't classify myself as a gambler, but I think a lot of your comments still apply.

I don't generally bet, maybe once a year on the grand national and maybe on the boxing if I'm watching a big PPV with friends. Also play poker once a month with a group of mates, but it's a friendly game for £20 each and more an excuse to catch up.

What I do, do however is invest and I approach FI from that point of view (I'm not trying to sound like a big shot when I say this, I'm not loaded and my investments are generally long term, I still have to do a normal day job to pay the bills). So when the IS was removed I thought about the impact on my risk and realised that either prices would have to fall, or dividends would have to go up for it to be appealing to me. I'm not trying to sound clever after the event as I admit that I did underestimate the impact but I definitely saw it coming.

Because I invest across various assets classes I was able to compare FI with other investments and suddenly FI was less attractive than some of them, so I pulled a fair bit of money out. I probably would have pulled more out, but due to Covid everything else was also a bit uncertain so I wasn't completely sure where else to put it.

I don't know how many other users are like me, as opposed to traditional gamblers who converted to FI, but anyone who invests across multiple platforms will have the ability to compare those platforms and will always be looking to balance risk with return. While dividends have gone up they've not gone up by enough to balance out the risk and that's why I believe people like me have pulled their money out.

Rather than looking at just average PB I look for a player with high average PB and a high standard deviation in that PB. I'd much rather have a player who score 250 one week and 150 the next than one who scores 210 and 190.

The Football Index Data Centre rather handily gives you the standard deviation on their scores, so I'd recommend checking it out.

@trig

Yep I just got matched for 25 at £4. Wish I'd bid for more but I already held 175 of him.

@AndydfopT

Just to be clear, I'm not necessarily saying hold onto players. I'll be ISing some of the holds I've been stuck with for a while who I don't want anymore and will be putting that cash into other players who I want and who I think have better earnings potential.

@AndydfopT

Ok maybe not everyone but a lot of players who have currently got no IS prices will have them.

At the moment the IS price can only go a certain level below the Buy Now price and the BN price degrades very slowly. Thursday will see those prices drop more quickly, dropping the floor for the lowest IS price.

There are plenty of players I'd be happy to buy at the right price that I can't put offers in on right now as I'm not allowed to bid that low, I'm sure I can't be the only one.

I think some players may actually see rises (not in the Buy Now Price but certainly on their IS price). There are players who have been without an IS price for a while, assuming Thursday allows those players to be sold there will be a reasonable amount of cash freed up. A lot of that will likely be withdrawn, but some will be spent on other players, hopefully causing those players to rise a little.

If a player has had an IS for weeks now and people haven't cashed out then I can only assume it's because they don't want to, so I don't see why they would suddenly start Thursday. It's the players who haven't had an IS for a long time that are going to see the real hits.

@Kozo-Kira

They should be depreciating assets as future earnings should already be factored in at the start. However for younger players the yield likely drops as they get older and fulfill their potential and become less risky, so this could lead to their price increasing.

@Roon

There's still plenty of risk, you're making an estimate as to what a player will earn. That could change for any number of reasons, they could get a serious injury, they could transfer to a club where they don't feature as much, they could move to a non-PB league, a young player with potential could fail to fulfill that potential (I actually think valuation of young players is very difficult, at least with older players you have a proven track record to do by).

A 25% yield takes that risk into account. By aiming for 25% you actually get some players who make 50%, some who make 25%, some who make 0% and some who make a loss.

I agree it won't work if you just plough money in like a bank. The required yield reflects the risk of an investment. So sticking it in your bank gets you 1%, a bond might get you 3%, an office let to central government might get you 3%, whereas that same office let to dodgy rent payers ltd might get you 15%. The stock market you should expect around 10% and so on.

You need to set your target yield to determine valuation. People are saying the value is equal to the total expected earnings, or a 0% yield and that's what I'm trying to point out is incorrect.

@AndydfopT

I'm not looking to earn 100% either. I'm talking 20 to 25% per annum return.

You have to take into account that (assuming a players earnings potential has been accurately assessed and that's a big if because things change) he is a diminishing asset. His career earnings potential in 3 years time will be less than it is today so you'll be selling him for less.

Lets take the example already quoted where a player has an earnings potential of £4.80. Lets say he has 10 years left to play and that his dividends are evenly spread over those 10 years, so 48p per season (these are obviously not accurate assumptions but are done to simplify the maths). If his price, throughout his career is equal to his career earnings potential then you end up with the below scenario:

I pay £4.80 for him in 2020, I earn £1.44 and then sell him on for £3,36. So I've broken even over my three years (but I've actually lost money due to inflation and opportunity cost). Why would I do that? So I think we can say that a player is worth less than his total projected career earnings, the question is how much less. Let's try a few scenarios.

So lets say a players price is 95% of his projected career earnings.

I pay £4.56. I still earn my 48p per annum and I then sell on for £3.19 (48p * 7 *0.95). At that point I've made a profit of 51p or 17p per annum. On my initial investment of £4.56 that equates to 3.7% p.a. At that point, taking inflation into account I've pretty much broken even. However why not just stick it in a 3 year bond at that point. It's much safer and you don't have any exit issues in 3 years time.

You can do the same calculation for various percentages. I know you said you were happy with a lowish yield and I don't know what that yield is, but you do. So based on it what fraction of a players total career earnings are you willing to pay?

@Roon said in Is any player worth more the £4?:

@GeoffS said in Is any player worth more the £4?:

@SDOAFIT

While I agree that a player's value should be determined by the dividends he'll earn in his career. I don't agree that it his value should be the dividends he'll earn. That means you're only going to break even over the life of the bet, and given inflation you'd actually be making a loss.

A player who is going to earn £4.80 in dividends over his career shouldn't be worth anywhere near £4.80. His exact value is open for debate but it needs to be significantly less than that.

The bit in bold, surely you mean "i don't agree the price i pay should be equal to the dividends i predict he will earn".

Everyone accepts a players price should roughly equate to the dividends they will earn till the end of their career. Each individual will value players differently but as a majority they will be somewhere near to each other(at least in liquid/strong market). The individual then buys players they consider to be a significant amount below potential dividend earning factoring in negatives such as age/injuries/non pb move/retirement.

Long story short they probably won't be loads and loads of players that will do that but the skill is finding the ones you as an individual have the biggest discrepancies to your forecasts.

I don't think everyone does accept that a players value should equate to the dividends they'll earn over a career. A player's value should be based on the dividends they'll earn but it should be a fraction of that. If I think a player will earn £4.80 over their career I'm not going to pay £4.80 for them. That way I'm betting on myself to break even.

Yes the skill will be in finding players who everyone else thinks will earn £4.80 but you think will earn £6. But even then you wouldn't be paying £4.80 for them, you'd be paying £3 or similar.

@Valhalla

It was a genuine question to Sol, he was saying he couldn't understand the price drop in Neymar and I was asking him what he thought Neymar was actually worth.

Sorry I might have confused the issue by scaling it up to 100 Neymars. That was just to make it more realistic but lets just use 1 Neymar as an example.

Any investment should be valued based on the returns it generates. I used £1.50 as an example for Neymar's annual return, but that's just a guess, as you pointed out he was injured a lot last year so he could easily do more, however he does seem to be injured a lot so I'm not sure I'd want to take a punt on him staying injury free, but you might feel differently and might put a higher total on it.

Take whatever figure you think Neymar will return each season. Lets say £2. If this wasn't Football Index but a bond that pays out £2 a year for the next 6 years. How much would you pay for that bond today. Whatever that sum is that's the value of a share in Neymar.

As for CA. Why would Neymar be worth more in 3 years time when he's 32. His projected career dividends is less than it is now as he'll have 3 years less left of his career. So logically his value will go down. CA doesn't work like it used to as a players value isn't directly tied to how many shares are in circulation any more. So the growth of the platform no longer guarantees rises.