FIC Weekly 07.12.20

The rollercoaster continues and it looks like we are in for a bumpy ride up until the new year.


As mentioned plenty of times now, the market is fragile and due to how thin it is - wide price fluctuations are almost inevitable.


People continue to discuss the viability of Football Index, but ultimately, one's perspective on Football Index will largely depend on how well the new platform suits the individual.


There isn't an objective answer to whether people should remain on Football Index or not and it is only natural for many people to want to get out of the platform. It has changed a huge amount over the last 12 months and I do not blame people for no longer being as interested as they once were.

However, as the pendulum swing rocks back and forth going from pessimism to optimism many traders are getting sick of the constant battles in the mind of deciding whether to remain or leave the platform.


Football Index's management and what appears to be indecisiveness as they stand back and watch the fluctuations will undoubtedly be frustrating some traders, but as Football Index watch on - they will be pleased to hoover up the commission between swings.


Opportunity


Whilst prices are volatile, we have an opportunity to make better than average profits through trading.


Not only are dividend yields far better than the average yields in recent seasons, but the volatility is also constantly creating opportunities.


In the last FIC Weekly, I outlined what I had been doing to effectively trade profitably in and out of players during the price fluctuations. As these points remain the same today, you can find them once again below:

  • Disregard past prices and focus on new prices in this new system

  • Patiently buy, high quality, value players with low-ball bids

  • Patiently wait till high bids come in to sell at profitable prices

  • Buy back into sold players by placing more low-ball bids

  • Diversify even more to effectively trade in and out of more bids/offers

  • Hold a percentage of your portfolio as cash balance for any significant market drops

Personally, I have been trading a lot over the last few weeks and so far it has been very profitable. Like most people who joined before March, my portfolio is down a considerable amount from it's peak value. However, I have learnt to discard the past on Football Index and attempt to focus each day on the present.


When I look back at the prices that I bought some players at, I almost feel disgusted, but this offers no value to me and so I rarely do this. I am glad that the fundamental, underlying value of players has now increased and that the platform is now in a much better place for long term success, albeit with plenty of pain along the way.


In the last few weeks, I have seen the potential to make great profits on this platform and today's drops in price only provide another opportunity.


Trading players


A few weeks ago, I was becoming increasingly frustrated with the lack of instant sell prices on quality players. To me, this signalled more clearly than anything else how little the previous mechanism really worked.


Fortunately, the vast majority of players, especially good players do now have instant sell prices. If you are really desperate to sell a player you can drop their price considerably by offering a low offer which results in a wider bid zone and often subsequent bids.


The new mechanism now allows us to trade better during times of turmoil because the majority of players now do have instant sell prices. Players without instant sell prices can be particularly frustrating holds and I would advise offering the player at a lower price to attract bids if you think there is value elsewhere.


However, I would only do this if I am certain I will use the money generated from the sale on another player. One of the worse things that you can do during a drop in the market is to sell players and then wait too long before buying into another player that has become a better option.


An alternative strategy to buying in and out of players during drops is to hold out completely and to not sell any players at unfavourably, low prices. It really depends on a trader's personal circumstances and how much time they have to buy in and out of a player. There really is no right answer on this one as it depends on the trader.


IPO's


Football Index's failure to meet deadlines, over-promising traders and the general disconnect between company and customer base has been the greatest concern for a lot of traders in recent months.


Over the last four years, Football Index has always eventually got it right. Maybe those times are over as we enter a new era of Football Index, but hopefully not. The introduction of IPO's now is an uncomfortable reminder of Football Index's poor decision making of late.

Excusing themselves by telling us that they are adding IPO's to 'test demand' could be perceived as a perfect example of how poorly they have been judging the market lately. It is clear that the market has been dropping recently and so overall I think it would have been better for Football Index to wait until NASDAQ was ready and to launch IPO's via the auction-style bidding process.


Tomorrow's IPO's are all very promising youngsters that over time may well rise in price. The problem with them being introduced to the market now is that the issues with liquidity are already bad enough. Releasing new players to the platform now does not help with this issue.


Overall, the impact that their introduction has on the market should not be too significant but it is more the poor decision making from Football Index which is frustrating.

At the moment, other young players look like much better options than tomorrow's IPO's. For between £0.80 - £1.40 you could buy the following 18-20 year-olds.


Callum Hudson-Odoi

Reinier

Ferran Torres

Takefusa Kubo

Vinicius Junior

Jonathan David

Francisco Trincao

Mohamed Ihattaren

Adil Aouchiche

Bryan Gil


Most of these players are where the above IPO's would like to be in a season or two's time. Therefore, it would make much more sense to buy these existing players and I think all of which will rise considerably over the upcoming seasons.


Overall, it is currently much more difficult to make great returns on Football Index than it has been in the past but I do believe the opportunities are there and that in the long term the market will grow an incredible amount purely because of the value that is currently on offer.

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