@CraigM said in Blog well worth reading:
As a new customer(7 weeks) who has regularly read opinions etc, I understand the importance of dividends, but can't see how this could be the only factor for prices right now. After all, most players will never win dividends, let alone enough to get near the price they can be bought at! Even with big guns, Messi and Ronaldo will never make their money back if bought today. Aren't we investing to a small(or large) degree in the power of the overall product here too, and the fact that if people are buying players for X amount now, as the product grows(hopefully) more people will also buy them and maybe more dividend opportunities, share splits etc will organically make our stocks more valuable? I do get the 'buy young' thing and although I don't invest time in looking for great young players, I have no player over 27 in my portfolio, but then again I am also trialling the next 6 months to see how it all pans out. If I make money and decide to stay in FI then I will undoubtedly look into a longer term strategy, but for now I just want to see if the demand is going to meet the heavy publicity and marketing that is being done by FI, hoping that I bought before more serious money pumps the market up as a rule? Time will tell!
Its important to remember what you are buying. Its a bet on the player winning dividends in the future. Yes other things do affect the price but if the market was efficient and people traded logically then nothing else other than FUTURE dividend yield would affect the price.
I think the problem is that when people say "there are too many variables to predict yield" it basically means you have no idea whatsoever how much a player is worth. As the index becomes more mature, people will start to have better attempts to project future dividends and there will be more accurate valuations. At the moment we are all pissing in the wind really.
Re the above post. Honestly if a player will probably never win a dividend in real terms they are useless as an asset.