In my early days on the Index I can recall various trends occurring with traders having a tendency to stick to certain unwritten rules when it came to player valuations, but on reflection, it’s becoming very apparent that these rules have been completely disregarded and that we’re now trading on an “anything goes” platform.
Anyone who was on the index prior to the turn of the year will remember a time when Kante was rock bottom of the index on the verge of relegation at a disheartening 17p because the general consensus was that he’s not an attacking player, therefore, he won’t be in contention for the buzz so was rendered useless as an investment. Now he sits 38th on the Index at £1.51 and peaked at £2.24 before the Player of the year award. Besides Kante, there are many similar cases where players who infrequently Challenge for the buzz have increased in value significantly since that time.
Another myth on the index that appears to have been squashed is that there’s no value in Defensive players, especially goalkeepers. Go back to just the 1st of January and your most expensive ‘keeper was Joe Hart by some distance at £0.78 and although not a single goalkeeper has won the buzz since, hart’s added 79% to his value and is currently priced at £1.40 not only that, but four other goalkeepers are also currently priced higher than Joe was on New Year’s Day.
When considering what the factors have contributed to these trend changes one predominantly stands out. That being that the Index has not only had a further influx of investment during this period of change but also the increase in new traders too. Back in January, the average player price was £0.64 with the most expensive player being £3.21. Exactly Four months on, the average price is up 84.4% to an impressive £1.18, with the top of the pack priced at £5.38. So clearly, more money results in a boost across the whole spectrum of the index but further to this, the introduction of new traders also brings new ideas and opinions of player value. With many new traders appearing to be more attracted by price growth rather than buzz capabilities and a lot more long-term investments being purchased, whether that’s young players with bags of potential or foreign players who could eventually get a big money move to the premier league. I believe this is because many traders are forecasting similar levels of growth continuing in the future and it results in value being found in almost any player at a range of different prices.
Although these points aren’t exactly groundbreaking realizations, they are certainly worth contemplating, especially for investors who have been on the index since its early days as it’s easy to look at current prices and identify them as overpriced in comparison with their previous valuations but you have to be mindful of the fact that new traders don’t know anything else, they weren’t around when Hart was £0.78, or when Kante was £0.17, all they can do is look at the market as it is in the present and find value accordingly. Therefore players that veteran traders perceive as overpriced can still offer them potential profit, even if you’re paying over what you see as a fair price. For example, I recently purchased 200 Joe Hart at a price of £1.10, as well as 200 Dolberg at £1.12. These are prices that I, as someone who’s been on the index around a year, would consider expensive to pay for a goalkeeper and a player from a foreign league, never the less, both trades are currently generating healthy profits and with the transfer window opening soon and a possible Europa League final for Dolberg against Manchester United in the near future, I would expect these profits to continue to strengthen.
Obviously, I’m not suggesting that every trader ignores all their previous experience, as experience on the index is very valuable to help foresee future trends or to keep calm during times of panic. However, I personally feel that in the current conditions of the market it’s more beneficial to consider the reasons why a potential investment may increase in the future and what events may trigger that rise as well as how much that player would have to increase in order for you to breakeven through instant selling to help manage your risk, rather than dwelling on the fact that this player is more expensive now than they were three months ago as that can result in many missed opportunities and although this is a difficult adjustment to make as it’s a subconscious, natural reaction to be cautious of paying over the odds for someone when you’ve seen them previously a lot cheaper, it can definitely be a profitable change to your trading technique.