What’s your Football Index Journey been like so far?
It has been fantastic most of the time and deeply frustrating some of the time. The rewards and enjoyment from FI are second to none for me, it is the perfect mixture of the sport I love, gambling, investing and intellectually stimulating – there is normally always something happening. The frustration comes with the company not making the most of what they have as quickly/efficiently as I would like them to. They always learn from their mistakes eventually, but so many of the mistakes made are avoidable and it annoys me that they have to learn the hard way all too often. Overall it’s phenomenal though, it’s just many of us traders have such high expectations and we tend to forget the good parts of FI very quickly when we feel aggrieved at a particular issue.
Why did you decide to go big?
I saw the true potential of FI during the World Cup of 2018. I imagine most traders start small, see how it goes for a few months. Put a bit more in and then evaluate where they are after 12 months or so. It took me a while before I felt ready to put in big money, but watching the ticker and seeing all the positivity about FI during that summer convinced me that I needed to make my move. Seeing other big portfolios on Twitter and FIG’s podcast were also factors in convincing me.
If FI don't increase dividends significantly in next 6 months, will you leave?
I won’t leave if they don’t increase dividends significantly, but I will certainly evaluate my position and possibly downsize my investment if it’s a nominal increase as it tells me they are not thinking the way I hope they are. One of my frustrations with FI is that they are always playing catch up with what the market is telling them. I understand why this is, but FI really need to get ahead of the market now. Every time they have to react they lose clients and confidence, so I really hope that FI take this chance to put in place a dividend structure that means the market has to catch up to them. If they are sensible and really make a statement here then it will enable them to attract bigger fish, lock in existing traders and see growth rocket leading up to order books. If they penny pinch then it will be papering over obvious cracks and sends completely the wrong message at a crucial time. Ticking over is fine once you have done your growing, but this product is primed for a growth spurt now.
The dividend announcement today came on the heels of a noticeable market correction over the past couple of days. Do you think FI were reacting in anyway or at the very least brought the announcement forward to help adjust the markets course…
Yes they were reacting I have no doubt about it. They are almost always reacting and whilst there is nothing technically wrong with reacting, the key is how long it takes and how big the issue becomes until they react. I get the feeling that some traders know more about the market and can read the market more than FI themselves can at times. This isn’t surprising because FI are looking at things from a macro level so it takes time to build a picture. We traders as a collective identify weakness very quickly because we care about our personal investment much more than FI care about our personal investments, we spot opportunities and act because our money is on the line. They can’t trade, so they have to read the market to know what is wrong or what problems are close to emerging and it seems that it’s nobody’s job to do this at FI from a trader’s perspective.
FI can do all the marketing, customer service, key client management, tech support etc in the world but having somebody in a traders shoes at FI is a must, they need to live and breathe the product through the eyes of a trader. If they already have somebody responsible for this then I’m afraid they are not doing a good enough job. Many of the negative periods we encounter are avoidable. I’m not talking little drops on the FOOTIE specifically, but more about traders talking down the product for days on end. The best marketing for FI is word of mouth without a doubt, so they need to keep us happy as a collective to encourage one another and newcomers. When forums and social media are toxic, that is a recipe for disaster and there is absolutely no reason why we should have these frequent negative periods and counterproductive interactions.
FI are getting bigger and as they get bigger it means more staff with tighter job roles and therefore smaller windows to see through. The market is getting more complex and sophisticated as well, so FI really need to think about how quickly they nip issues in the bud. I want them to fulfil their potential as it means all of us should make more money. Haemorrhaging customers whilst they procrastinate is the opposite to this and is totally unnecessary. They have gotten away with it so far because of a lack of competition and a trader base that have largely made great money and had a good time doing it, they have earned a mistake or two but patience wears thin.
However, now competitors are emerging on the periphery, not all traders are making money and because of the nature of the way the Index works, a small ripple of discontent can turn into a tsunami very quickly. The fact that most of us have made good money relative to our investment is also a double edged sword, we have become used to it. More and more seasoned traders are heading to that promised land of ‘playing with profits’ and it doesn’t take much to scare other traders into thinking, ‘it’s been a nice ride but I’ll take my profits now’. Traders can get off the train whenever they like, but I think there is a long way to go yet, FI just need to be more persuasive in their argument to convince traders their money is safe and will grow longer term.
Personally I have been increasing my investment rather than taking profits, simply because I think there is so much more room for FI to grow and I may as well have my money working for me. A lot of people however are looking for excuses to cash in their chips, FI needs to convince them not to.
As a big campaigner for increased dividends, in your opinion, how much should IPD/MB/PB increase to, in order to attract the big money investors?
Now that FI have committed to a dividend review, how would you restructure the dividend offerings?
There’s been discussion about how FI should deal with dividends in the future. What’s your opinion? Should they say that there is going to be a review every certain date? Should it be in line with the Footie? There seems to be no right answer….and I think it’s a real tough one for FI to deal with.
Does the precedent of FI increasing IPDs most worry you?
I’ll tackle this all in one go.
There needs to be a substantial increase in dividends for several reasons:
Competitors are starting to emerge, not a direct competitor, but ones that will nibble on the edges of the cake that FI has made for themselves. Those competitors have the benefit of being nimble and learning from the mistakes FI make. Mike Bohan talked recently about FI being able to move quickly, they can, but not as quickly as start-ups. Killing the USP of these potential competitors with a significant dividend increase (and a new addition that I will go into later) will be a smart move in my view. Don’t give potential competitors any oxygen is my advice.
The share split worked wonders and it needed to be followed by a dividend increase a few months later. I think they were too slow with the share split but they got away with it and then gave a modest increase to PB at the same time (mainly for rounding purposes). If anybody had said the FOOTIE would double in value but the top players would decrease during that time, you would think they were mad. At the time of writing this the FOOTIE is just over 125,000. If you told most knowledgeable traders this 6 months ago and asked them to say what the top of the market would look like, they wouldn’t say six (yes just 6) players would be over £5 in value. I’m sure most would expect £10+ to be the ceiling, not as it currently sits at just over £7 for Neymar. The rewards on offer for PB are simply too small for the difficulty in winning them and the price of the most likely winners is too high for the poor reward on offer. It’s obvious that dividends need to rise to extend the market. MB changing has further hindered the top of the market, as well as IPOs galore spreading capital and increasing the difficulty in winning. I’m a fan of Internationals being PB applicable, but again this has hurt the top of the market as treble MB days are reduced.
Too many traders are being convinced that the way to make money is by short term flipping – which is proving to be accurate currently. It becomes self-fulfilling because as people see their expensive holds drop in price and cheaper players rise relatively vast amounts, why would you not want a piece of that? It’s taking away the structure of the market and turning things into more of a lottery, fastest finger first and first to blink wins – that’s fine if you are in this short term, but terrible if you want FI to fulfil its potential and ultimately make more for all of us.
You can win PB and your player can actually decrease in value, it’s frankly impossible trying to explain that to a new trader or a potentially interested party (experienced traders understand why this happens, but so what, it is still counter intuitive?!). Your player could score high and just miss out to some freak score from a random Italian player and drop like a stone in price as a result. It’s not helpful to the long term future of things seeing this happen. Naturally if premium players drop and cheaper players catch up, the market will eventually spot value and the cycle should turn, but that isn’t happening right now because the dividends are not driving things directly, they are an afterthought to too many traders. I see debates on social media about whether you are dividends or capital appreciation focussed – it’s ludicrous that this is happening as everything is based around dividends (or should be) as they are the only thing that bring any value to our holds. It makes no sense that a player playing week in week out is cheaper than a player that hasn’t yet and may never kick a ball in a PB league, but it happens all the time because a large percentage of traders are now relying on the greater fool theory and ignoring the thing that should be driving the market. FI need to snap traders out of this quickly otherwise it will turn into pure gambling and serious investors will not be interested. A market needs to make sense for it to work, the feeling of late is that ‘sense’ is for losers and wild speculation is where the party is at!
The market needs more long term traders to provide structure, 20-30% a year return on investment is incredible really and everybody can get that by just riding the growth and picking up dividends with a diverse portfolio. No skill required aside from a bit of patience and lack of greed. When I say it’s ‘incredible’, it is compared to ISAs, Bonds, managed funds etc, the risks are different though and getting riskier so that has to be factored in.
If FI make the dividends appealing enough then bigger fish will join, existing traders will potentially deposit more as well. The market has moved too quickly into a pure trading platform based on speculation rather than sound reasoning (in most cases, not all). At this point there shouldn’t be any losers – it’s too early in FI’s lifecycle. There will always be people that flip players, pump players and simply convince people to buy so they can sell, but the time for that in FI’s development is not now. Eventually it will be a dog eat dog trading environment, once FI has reached a peak and dividends don’t rise any further, we are a long way from that (or should be).
I don’t blame traders for doing what they do short term wise and looking to find creative ways to make money, but the more that do this the scarier the market is for people with big money to invest (or invested). FI need to correct this by making it appealing for people to think slightly longer term than they are at the moment. The amount of people using Instant Sell (IS) after one game, or a substitution is simply phenomenal. I’m not going to harp on about a 3 year bet as FI need people to sell, but it needs to make sense to outsiders and insiders. The lunatics will fund dividend rises and help FI grow, but if we have too many lunatics they will take over the asylum very quickly. So a significant dividend increase is needed to help provide a bit more logic to things, at least until larger investors come in to solidify the spine of things – one will lead to the other.
FI’s niche is PB, they need to build everything around PB. I’d introduce a new mechanism to reward players that score high PB scores but may not necessarily win the overall lottery of being the top player in that position for the day in question. MB is a must have for none game days and to help add value to the most well-known footballers, despite its obvious issues. Newcomers to FI need to see the best known players at the top of the market, otherwise it makes no sense to them and they will likely not dedicate the time needed to understand the nuances of the platform and leave.
There are many more reasons but I hopefully have made my point that FI need to dramatically increase the prizes on offer and it’s at a tipping point. I would restructure dividends as follows:
4 categories of game day for PB, there are simply too many games played on some days for it to be attractive sticking with the current system; it’s far too hard to win.
-1-5 games = 3p top player in each position and then 1p* man.
-6-15 games = 5p and 2p*
-16-25 games = 7p and 3p*
-26+ games = 9p and 4p*
This is a good increase and makes the 26+ day well worth winning (argument says that if there is a big game day on a Saturday then Sunday will be much less than normal). It also gives FI back a game or two on the single & double days, so it’s slightly harder for us traders to win, but more beneficial if we do.
Most importantly I’d add a new in-play dividend for high scoring PB players. I’d make it for the first 30 days of purchase only, so as not to damage FI long term with a huge liability. If a player scores 200+ points it feels wrong to me that they can not only miss out on dividends, but also likely drop in price because they got close to winning but not close enough. So I’d do as follows:
-200+ points = 2p
-300+ points = 3p
-400+ points = 4p
With this in place it makes me want to buy players now that compete for dividends and get rewarded for near misses. It’s not quite tiered PB (1st,2nd 3rd place pay-outs per category), but it’s good enough for now and is only open for 30 days. The great thing from FI’s perspective is that it will encourage a shed load more trading all over the market. Currently, come 2pm the top of the market barely moves, it actually drops come Saturday night until Monday afternoon in most cases. Nobody is interested in buying or recycling their shares at the middle or top end for IPDs. However with this new metric I would certainly think about recycling my Messi/Ronaldo/Neymar shares every month or so if a nice run of fixtures emerge. It provides substantial liquidity to all of the market, rather than just cheap goal scorers, or freak cheap player PB scores, like we have at the moment. Traders would inevitably use the ‘market sell’ function rather than IS much more often if they know that their hold they want to sell is only one good (not necessarily PB winning) performance away from being purchased. Shares spend too long on the sell queue, this solves that problem and brings FI a lot of commission and trader satisfaction as they can reinvest elsewhere quicker – the whole platform would be livelier and therefore profitable for FI at the same time allowing traders to exit and reinvest quicker without using IS.
A key point here is that if the market is booming then dividends will likely get reinvested, the winnings stay within FI – it’s a win-win. I would trial this to see if it works how I think it would from FI’s perspective, but I think everyone’s a winner with this idea. No matter what part of the market you operate in as a trader this gives all players more chances of winning you some dividends and keeps the focus on PB scoring, which is the thing that makes FI what it is. Liquidity is key to FI and a new concept like this being added strikes me as a win-win. New traders will also not see their player that performed great drop like a stone, which must put so many newcomers off.
Another huge benefit is that it will likely nullify any competition that wants to take that part of the market. One competitor I read about is focusing on match betting on PB scores in some way or another. This potentially kills that competitor’s USP, it certainly makes it much harder for them to gain traction as the 30 day version of this comes with all the added extra ways of winning with huge capital appreciation on the side (if FI grows as it should).
MB is a tricky one. It’s boring, but it’s necessary for 365 days interest. It’s also a key part of the value derived from the top of the market, (or was), they need to increase this to account for both the natural growth of FI and the opening of the squad with more and more IPOs. I’m not as passionate about the increase here as I am for PB and the new 30day PB score idea, but if affordable and dividends do get reinvested as I suspect, then this is what I would do:
-MB – 3p/2p/1p on match days
-MB – 5p/4p/3p/2p/1p on non-match days
Possibly too generous but remember FI need to grow quickly and MB provides reasonable stability to big investors which is vital, it’s also much more random now than it was with the squad being introduced, but still easier than PB to win. I wouldn’t mind if the pay-out on non-match days is 3p/2p/1p, as it currently is, but it doesn’t get the juices flowing and the premium holds drag the rest of the market with them. The point is they need to go up to make more sense of the market and to reward holders of premium assets (traders taking the biggest risk with their money) – which will in turn stretch the market and pull everything up with it.
If they do this then the market should grow rapidly and will attract and retain traders like nothing we have seen previously. It may be expensive on paper, but FI need to remember what makes this market work. There is no point spending millions on advertising, technology, staff, new offices etc, if there is a slowdown in growth. FI need to constantly increase the ceiling, be ahead of what the market is about to do and constantly evaluate dividends. FI need to take hold of this market and move it how they want, the time will come when traders can take over, but it’s too soon now.
I’m in favour of further increases being in line with the FOOTIE value or some other transparent metric, but I think it needs to be made clear when reviews will happen if not. We can’t constantly be waiting for FI to step in and as traders we can’t always be living in fear/expectation. FI need to get in now, sort it out and then step back, no more deposit bonuses unless absolutely necessary as well. I’d make a statement when they do this dividend review on 29th October and say that there will be no more scheduled deposit bonuses on our birthday etc. The market needs to run without too much interference and the only way they can do that is by providing substantial leg room now with a big dividend increase.
I am not too worried about IPD’s getting the most love last time, as I think it was more to do with rounding. When you are dealing with 1p/2p then it’s obviously a huge increase percentage wise. I do worry that maybe too much attention is being paid to board members that come from a pure gambling background. Ultimately FI is a new idea, so sourcing advice from similar sectors/products and wise leaders from those sectors is great, but FI have to remember they are unique and what attracts most of us to FI is that they are not a bookies and our bet has longevity but constant interest. The best advisers to FI right now are the traders that live and breathe their product 24/7, not the people that attend a board meeting once a month (guessing here) and don’t think about FI again until the next meeting. I don’t know these people and I may be paying them a disservice, but many of us that think about FI most of our waking hours, we identified the recent issues months ago – why are FI not ahead of these things? I think it may have a lot to do with them heading into unchartered territory but using out of date maps as a guide!
FI has started to change because they have not read the market correctly and not paid enough attention to PB/MB dividends. I don’t think FI want to become a short term trading platform yet, that has no longevity as a business because the users of that business are fickle and will move to the next thing very quickly typically. They need to build trust and long term confidence, traders that will set-aside a percentage of their pay packet to top up their portfolio each month. They shouldn’t want a platform full of people looking to scalp one another, using instant sell as their sole method of selling, and doing so with the only reason behind it being ‘I have to get out before the rest do’. The market is turning into a very reactionary place right now. That needs to change, and I don’t mean going to the other extreme as that is boring and makes FI no money. But the see-saw has tilted too far and that needs correcting quickly – it’s making a lot of people very nervous the way the market is functioning right now.
FI must know that this dividend review or restructure probably carries them through to Order books. Does this mean we might see the most sizeable change since doubling of dividends in 2017?
I would like to think so. If I were FI right now I would want to make a statement of intent, I’d want to shut up the doom-mongers, and focus all my energy on making the platform fit for purpose. If they dramatically increase dividends, us traders will give them a lot more rope, we can be happy doing what we do best and FI can busy themselves with NASDAQ, Website, Marketing etc, rather than constantly having to put out fires and handle trader dissatisfaction. The market will grow rapidly and the word of mouth marketing will do much of the hard work in terms of client retention and attraction. This is a golden opportunity to turn this into something incredible, but they have to put their hand in their pocket. As I’m not privy to the finances I don’t know what is or isn’t possible, but I think an increase will pay for itself in no time and most will reinvest dividends if the market is growing.
How are you, as one of the largest investors on FI feeling about Order books?
I like the idea, but it’s too soon. The market is too small at the moment in my view and there are not enough buyers to fill the void if a player is tanking. If FI implement the dividend increase I am hoping for, then I wouldn’t be surprised to see the Footie at 200,000 by next March. Hopefully they should have everything in place by then to launch order books ready for the Euros. I really don’t know enough information about trading volumes and how many big traders there are out there, but I know there should be more and order books will help attract them. The key is having enough big fish in place before they launch order books though, they will only come in large numbers with a structured market that rewards properly (dividend wise) and makes sense at first glance. If order books launched tomorrow I think it would be a disaster, so a lot of work needs to be done. It’s easy on paper, but again it means putting enough dividends out there to get traders buying and lots more of us to do that buying.
What do you make of FI’s marketing in the past 9 months. We had massive success in early 2019, but it’s never really seemed to have hit the heights of user acquisition since then….
I like the guys at FI from the few bits of communication I’ve had with them and I think on the whole they are doing their best and have done a brilliant job. Marketing has been very good in particular, they have been let down by the technology and that’s always frustrating. I said previously that there is no point in throwing millions of pounds into flashy ad campaigns if the user experience is poor, or the actual prizes on offer (dividends) aren’t attractive. I would love to know the user retention numbers, but I imagine for every 5 people that join they lose 2 or 3. The tech side of things takes time but to make up for that they need to make the product as fun and rewarding as possible. FI is certainly fun, it makes game days so much better. I love nothing more than waking up on a Saturday, having the football on the TV, with my laptop open showing FI, Sofascore and IndexGain/Slack. The community aspect of FI is fantastic, slack is brilliant on a match day talking football as it relates to FI and then getting goal scorers through quicker than any website. Anybody that takes the time to understand FI will find a multitude of services and enhancements to their trading experience just a click away. So it’s an easy thing to market, I just think a combination of things has meant we haven’t seen it kick on as much as it potentially could.
I was expecting big rises with all the money being thrown at sponsorship and advertising, but it seems they only come with FI announcements. I honestly believe that every penny they are currently spending on marketing could do 10X more for FI if it went into dividends. Let happy traders market the product and once you have done that go back to advertising etc.
I also think most people that are into football will have at least heard of FI now in some capacity, if they haven’t joined yet it’s likely they need a bit more convincing than an advert can provide. If traders are happy and very confident about the future direction of FI, it will be much easier for us to get these ‘potential’ new traders over the line. Adverts are great and will spark conversations, but the complexity of FI and the negative connotation surrounding gambling make it a harder sell than a typical product. You need ‘people’ to convince ‘people’ that this isn’t typical gambling and isn’t an all or nothing game, you need people to say ‘I’m a trader on that, it’s been great fun and I’ve won X amount of money’. It can be a steep learning curve, so I would wager that the majority of new traders that stick with FI have a friend using the product or are active on social media. The best marketing FI can do in my opinion is have the hundreds of thousands of existing traders singing from the hill tops about how great their product is. A large dividend increase will ensure that happens.
How have you felt about their communication in 2019 thus far? It’s improved overall as a company since the beginning - but it seems like there’s a way to go….
Communication is a problem for any company, they are getting better, but as they grow it will be harder to police it. Ultimately when there is money involved and an out of date tech system there are going to be issues. I think they struggle to put themselves in the shoes of traders at times (especially customer service with their random suspensions of accounts for checks), it comes across to me that they forget some of us have a lot of money in this. Its fine them calling the shots, but nobody likes to feel taken for granted. OPTA-Gate (players changing positions for random reasons) was a real frustration for me, I seriously considered leaving over it to be honest. The excuse given didn’t make sense to me in that OPTA use a different database for International matches, considering some of the players that changed played in the same position for club and country and some hadn’t even played for country recently. Then they changed back in some cases before a ball was kicked and then changed again. I got burned badly. FI said traders over reacted, but I had the same issue the previous summer with Thorgan Hazard changing positions Forward-Midfield-Forward in the space of 4 days. It cost me a lot of money and I was assured this wouldn’t happen again! It did and it annoyed me and cost me a lot more money. I know many traders felt the same way.
I don’t want to harp on about negative war stories like this as bad things happen. But they need to be learned from and traders certainly didn’t over react as was suggested in the explanation from FI. If a value of a bet changes then you need to react quickly or you get burned, in this case if you reacted quickly you got punished, so it severely damaged my trust. My first major issue was the G&A introduction this time last year, which crippled my defenders (FI hadn’t considered the impact this would have which annoyed my more than the idea itself). Then OPTA-Gate happened and I started to go to bed worrying about my investment. I love the product and the money I’m making – but I have to be confident that my money is respected and the people holding it are fully aware of all the nuances of the platform they run. They deserve the benefit of the doubt but it has to be give and take when mistakes like this are made. They do a great job on the whole, any company growing this quickly will have issues to deal with, hiring new staff and training them is always difficult when it’s a fast moving business – traders sometimes need to remember that we aren’t dealing with a FTSE 100 company yet – there are going to be bad hires, under trained staff and mistakes that need to be learned from – so long as the same mistakes don’t get repeated and common sense is applied it is all we can ask for at this stage of development.
What have you made of their Tech in the past 12 months. It seems to be more, and more of a glaring issue - which has heaped a lot of pressure on the NASDAQ partnership. How much does the NASDAQ Partnership excite you?
It has been obvious for a long time (if not since it started) that the tech side of things hasn’t been fit for purpose. As more traders join and more action takes place those issues become even more apparent. I’d be more concerned if FI had been burying their head in the sand, but it seems their primary focus is to get everything working properly. Like most things it is taking too long, it seems like forever since a ‘new’ website has been in the works. The mistakes with dividend payments or PB turning off during matches is very frustrating for us traders, but I’m sure it’s even more annoying for FI (and expensive). I’ll give them a break here, only because the growth has been immense and when you are working with finite budgets you have to scale up in a logical way and timing user acquisition with tech is an imperfect science.
The NASDAQ thing is great, but again this relies on there being enough traders to make the assumed expense worthwhile. I like that FI are thinking big, but talk is cheap, the product needs to be robust and for traders to join and stay the prizes on offer need to be appealing. At the moment the tech is bad and the risk/reward ratio for our bets is off (in key areas of the market) as I’ve gone into ad nauseam above regarding dividends.
A partnership with NASDAQ is a statement of intent and it should add a lot of credibility to the platform with traders on traditional markets and Joe average traders/gamblers/football fans as well. Equipping existing traders with as many sales tools as possible to convert our friends, family and work colleagues is vital for FI, so this has the potential to be a deal closer for us as we try to convert the sceptics. Naturally we need to see what this all means in practice though before we try and covert the masses.
Out of 10, how confident are you feeling about Football Index right now? How does this rating compare to how you felt last time we did a blog post together - in December 2018, almost 12 months ago.
I’m a strong 8 out of 10. Last time I was probably a 7. The growth has been superb, but the drawback has been some of the steps FI have made (or haven’t):
I’d like to have seen much more progress on the tech side; we should have data products in place now (I think a partnership with Index Gain leaps out at me as an obvious bridge or joint venture), correct and timely dividend payments, trades being processed rather than freezing during big announcements. Obvious things which I think they will address soon if what they say is accurate.
Intention to flood IPOs into the market – I believe that FI needs to have all the players that qualify for PB games available to purchase it makes total sense. I also think they need to be ahead of the game with youngsters or overseas players that could join a PB league/team very soon. This is great for traders that research and brilliant for FI’s bottom line as more players equal less chance of traders winning. The obvious problem is that existing bets get damaged, it’s harder for our existing holds to win and money often leaves them to get onto the IPO’d players. This is another HUGE reason why dividends need to go up significantly. Traders that have ploughed their money into FI should not simply have to endure the full price of this necessary expansion. It’s a stealth tax on existing traders and the only winner as it currently stands is those waiting on the side-lines to snap up deals and FI. The loyal client with their money fully invested gets penalised for being a good customer. This needs to stop, if FI want to expand the player pool they need to expand the prize pool dramatically.
As mentioned I’d like to have seen dividends rise sooner with more emphasis on what makes FI work – PB.
Less predictable deposit bonuses, which cause artificial drops pre-announcement. The rises are great and the drop off after is never as bad as the rise is good (if you have a diverse portfolio), so they help make money for us traders on the whole, but send out the wrong message if too frequent or easily telegraphed. I hope FI are proactive here as I already fear for our portfolios next September if they aren’t.
The opening up of MB felt wrong in the way it was done. The argument is there was an MB dividend increase at the time of the share split. But that was needed anyway at the time. The last dividend increase was to catch up with the growth the market had derived pre-share split for me. We were due an increase even without the share split so trying to package the two together and saying ‘we just had a big rise’ is a bit crafty. It’s like being underpaid for years by your boss, he then gives you a pay-rise to make up for it. But then throws a load of extra work your way saying you should be happy doing this extra work because you just had a pay rise! The next dividend increase needs to account for the growth since the share split AND the hoped for growth leading well into the future.
Angering traders with nonsensical explanations. I think FI need to think very carefully before they announce anything or provide an excuse for something that has gone wrong. They tend to cherry pick details and ignore other salient points with their explanations (7% Squad players winning MB is a blatant case of this in my view, but I’ll leave that there).
Another is talking about risk teams scrutinising spreads, clearly this is either not done properly or the people doing it have no idea what they are doing. I don’t specifically care about spreads as I don’t use IS very often and frankly I want FI to try and prevent people using it as much as possible unless in an emergency scenario. However it makes little sense why they would be so vast on some players and not on others, they also increase them or leave them in moments of chaos in bizarre ways that defy logic.
For example - I got caught on Douglas Costa recently, he pulled his hamstring and the spread stayed the same for an eternity, despite IS trades going through like wild abandon on the ticker. His price got absolutely obliterated because there was a nominal spread on him, where were the risk team, toilet break perhaps? A different player would get a large spread placed on them instantly and the price would be protected, it’s totally random and that means we as traders are in the dark as to what may or may not happen to our holds in moments of crisis – so traders err on the side of caution and offload as quickly as possible. It’s also ridiculous that a pulled hamstring or an early substitution can cause such huge fluctuations in price, the reason for this (in many cases) is because people don’t want to be left holding the bag because they have no idea when FI will increase the spread. The slightest bit of bad news for a player now is treated disproportionately by a lot of traders, mainly because they are trading based on other traders assumed reaction rather than common sense. The IS craze to any bad news is fuelled by FI’s unpredictability and it needs to be curtailed.
Angering some traders with perceived weakness or lack of thinking behind key decisions. I’ve mentioned before that FI tend to get it right in the end, they just tend to go through maximum pain before sorting it out. This leads to them often looking like they bow to trader pressure, to be clear I don’t think this is the case. I think they just eventually realise there may be some merit behind what traders have been screaming at them via social media and the problem won’t go away until they act – so they do sort out the problem and it can look weak.
There are some very intelligent people at FI and there are some very intelligent traders out there. There are also a lot of short sighted traders who only see as far as their own short term profits – FI have to make sure that when they listen they listen to those whose interests are aligned with FI’s long term success. Some traders only play the game in a certain way, they flip, they trade cheap, they trade premium only. Some buy and hold for years on end. The traders FI should be listening to most carefully are those who apply a mixed approach to their trading strategy; otherwise the advice gleaned is biased towards a particular niche strategy. For example somebody could buy players solely for capital appreciation, their plan may be to talk down premium players (MB/PB dividend focused typically), as they realise any money coming out of the expensive players will likely find its way into the players they hold at the cheaper end of the market, short term win for them. They will typically be against MB/PB dividend increases, deposit bonuses or anything which adds value to the top of the market at the expense of the lower end. Likewise traders on a ‘buy and hold’ long term strategy with premium players will only want things which help their holds and will be against anything bringing value to cheaper players (IPD’s/IPOs for example) as it means money leaves their holds for alternative players.
I see the merits in all types of strategies and I’m not critical of any trader for doing what they think is best for them, (aside from pumping and dumping, or blatant lying). If FI indeed do listen to social media, then I hope they apply the appropriate filters. That isn’t to say that somebody having a niche strategy can’t provide great advice, on the contrary they will be experts in their area of the market. Their input could be invaluable to FI, but the people assessing this feedback at FI HQ need to understand the rationale behind it, they need to know their market inside and out from a traders perspective. I have no idea how deep their thinking goes, but it’s a truly complex beast now with many agendas and nuances to consider – it’s certainly no longer back of a fag packet policy changes and I get the impression that FI now understand this given the breathing space they give themselves between key announcements.
I have heard that they have introduced a trader panel now. Something I was suggesting in my last blog. I hope they have a good range of traders involved, but more importantly the people listening to this feedback are capable of truly grasping the nuances of it. Social media is full of short term traders at the moment, pumping their holds and convincing other traders that this is the future – it makes sense because a short term trader has a need to machine gun the timeline with their strategy/ideas, it’s constantly moving and they need to get in and out of players quickly to keep making money this way. There will be a silent majority who operate a more patient approach, but the impression one gets from reading ‘twitter’ at the moment is that the only way to make good money on FI is to flip players quickly and often. Anybody that holds long term that posts seems to have a consortium of short term traders shout them down as being a poor trader because they could have made X amount more if they were more active like they are. So it feeds a short term culture – I just hope FI see through this and as mentioned before I have nothing against traders playing the short game, unfortunately it just means that naïve newcomers get sucked into that mind-set and will often lose out to ‘experts’ at the short game and likely leave before they get to understand all the ways to play the game. FI can help with this by making dividends the obvious driver of things.
In saying all this, I am very optimistic because these issues are small fry compared to the growth expected. If FI do what they need to with dividends, implement a new website and support technology to ensure the trader journey is fun and winning/losing is based on their own decisions not FI’s mistakes or changes of direction, then it can only go one way. I’d like to see FI step out of the way as soon as possible in terms of product changes, less interference with things. The advertising, sponsorship, radio slots, podcasts, TV comms etc is all getting better. They nailed the new PB matrix despite my fears they wouldn’t get the balance right, so that is another feather in their cap. I think the signs look very good now they have announced this dividend review. Just fix the tech, make the product appealing to more people and bigger fish, stay ahead of the market, don’t take existing traders for granted and the sky is the limit.
How has your strategy evolved since we last spoke?
My strategy has remained pretty constant in that I apply a mixed approach with more emphasis on buying rather than selling. I like watching a match and seeing how the players score relative to how I think they performed. If I see a player that has scored high, but hasn’t played as well as I think they can then I will often buy them if other things are in their favour as well. FI will get a load of commission from me eventually and sometimes I am prone to go on a cull of some of my players that haven’t worked out as I had hoped, which gives some back to the company. I have 266 players in my port currently, so I cover the market, I have my punts for transfers, premium PB & MB players, some young prospects, cheap IPD players, players I believe are close to capturing form or have been unlucky not to be a higher price. I also have the better players for decent teams that may not be prolific for PB, but on single/double game days have a decent chance of bringing home dividends with a bit of luck.
I also repurchased some players that I sold much cheaper a while ago, ones that were not very good for the old PB matrix, but with FI’s growth and the new system could be good long term acquisitions despite being pricey. I like to hold the best players in the best teams so that I can potentially win PB each game day. I hate seeing a game day appear and not have any players viable for the dividends on offer, I see it as a wasted opportunity. I will buy players for a month or two that I don’t especially rate for PB, but I can see the market is keen to get onto them for other reasons. I miss some obvious cases because I have been burned on a player in the past. I often get the most rewards from buying and waiting. The market was growing rapidly so whilst there is a lot of money to be made by being very active in the buying/selling side of things, I tend to mainly buy broadly and ride the natural growth of FI – but there will always be strong logic behind why I purchase a player. I won’t just buy because others are, or because they score a freak goal that gives them a great score one week.
There are many successful strategies but everyone is different, we all have different amounts invested, time to dedicate, knowledge of the game and tolerance for risk/gambling. I found myself watching the last 5 minutes of France the other night hoping Griezmann would pass the ball 2 more times to ensure he won PB, sad, but this is how FI has me thinking now. I find myself watching teams I had never heard of until FI came along. FI dominates my thinking when watching football or even whilst waiting on a bench as my wife takes a look at ‘just one more shop’, it’s more than just a gambling product, it’s a key part of my life now because it is lucrative, but mostly because it’s fun. That’s why I want FI to succeed so badly, not purely the money, but because I think weekends and other match days would never be the same again without it.
Small ports and big ones must act differently yes? If so how should they for maximum or safest profit
Not necessarily, we should all work in percentages, so whether you hold 10,000 of a player or 100 the dividends being paid or capital appreciation being paid is the same relative to your investment. However if I had a small portfolio I would not adopt the approach I do now, because winning pennies in dividends is irrelevant to me. I would be 100% focused on what are classed as capital appreciation trades, cheap players that could one day be great, with a couple of premiums to reinvest dividends. The trouble is so many traders are doing that now and not just those with small amounts of money committed. Not everybody has the same risk profile as me though, so some traders with say £5k committed could easily be happy to buy Neymar/Pogba/Messi and just sit back and collect the dividends, it’s not a life changing amount of money and it’s stress free for the most part – but it brings in a better return than most other investments. I’d find that boring with a small budget as I like to watch matches with my players playing. So my advice to people that think similarly to me is to spread the money around good PB players that qualify for EL/CL football and ideally their European National team – that gives you maximum games to qualify for dividends and IPD’s, it also gives you more of a chance of them taking off in price if they perform well for a series of games. I’d probably be more active, taking little wins and wouldn’t be as patient with holds that experience a downturn. This is why FI needs a lot more larger investors to aid the structure of the market and to not chase a short term strategy.
To be clear though, I don’t advocate pumping players to then sell them to the people you are pitching them to. I also am strongly against those traders that look for loopholes and try to exploit FI and their fellow traders in other ways. It makes me sick when I see FI announce a deposit bonus and the amount of traders that immediately think and ask ‘how can I abuse this in the best possible way, have FI made a mistake so that I can get more from what they are offering?’ If everybody operated that way then FI would go out of business and we would all lose. If everybody focused on scalping traders there would be more traders who would give up and likely tell their friends it’s a con of some kind and growth would stall for us all.
We need to be as helpful as possible to new traders, we need to not make social forums a toxic place. I 100% believe in holding FI to account for mistakes and calling out traders that are a potential cancer to FI’s long term success, but if people have small portfolios it is very easy to sell those portfolios and walk away – we need to bear that in mind with our actions. For example when G&A was introduced it hammered my portfolio, I had done nothing wrong – FI moved the goal posts. If I had a much smaller portfolio I would have gone that day, IS’d the lot and never looked back, I was angry and probably would have over reacted, but I know some people did just that. The only thing that stopped me was that I had a big portfolio, it would take a while to sell (even if I used IS) so thankfully I slept on it. With OPTA-Gate I did sell a hell of a lot in frustration. A few months later I came back in with even more as I re-evaluated. My point here is that the only thing stopping me from walking on both occasions was the size of my investment. There won’t be too many traders that couldn’t IS their portfolio in 5 minutes and withdraw, never to return – so we need to be careful that traders only lose because of their poor decisions, not any other traders bad advice or FI’s action/inaction.
I’m not telling people how to act as it isn’t my place to do so, but a small trader can be next year’s big trader, or they could introduce a big trader. We all make money the more people that get involved and the more confidence we have in the product the more we will commit ourselves. I saw big traders showing off their portfolios and it was a key component in my deciding to go in big, so people showing off should be praised as it benefits all of us. There is jealousy everywhere but I would suggest that some people take a step back from time to time and appreciate that if somebody is proud of their 100% trade, let them enjoy it – it may spur on others to do the same and yes sometimes it can look pretentious and maybe it was lucky, but so what – if people are making money it means they will want to carry on investing.
There seems to be a lot more angst in the FI community these days. It feels like people are on edge a lot, possibly due to portfolios becoming larger, and people having more skin in the game. As someone who has the most skin in the game, what are some tips for people to remain calm and stay stress free with regards to FI?
More traders will always equal more clashes. The more money involved the more emotional things will get. I also think it’s easy to form alliances now and traders will work in syndicates both trading wise and via social media unfortunately. My tips are simple really, but I often have to take a step back and think about them myself:
Remember why you invested in the first place; don’t get suckered into the idea that you are a poor trader if you are not making 100% a year etc. If you are having fun and making money then that should be good enough. Even if you are breaking even, so what as long as it’s fun. Think of what other hobbies and interests cost you financially, to actually make money from a hobby is a dream, so try and remember that.
If you are a big investor and maybe have more in that you can afford to lose, then constantly be assessing and try not to get caught up in the emotions of it all. Don’t put pressure on yourself with arbitrary targets.
Be patient – if a player gets injured, dropped etc, then remember the fact you have 3 years. If you happen to be onto the news quick and you think your money can work better for you elsewhere (even with the 2% commission and spread) then do what needs to be done, but always remember FI is growing organically. I personally find it very difficult to buy back a player I have sold previously, it not only says I may have made a mistake selling (ego), but it’s costing me money to correct that mistake. I did buy that player for a reason, getting a red card and missing a couple of games shouldn’t typically matter that much, it means the reason you purchased wasn’t that solid in the first place (unless day trading or 30 day IPD trading).
Don’t follow the crowd all the time. I have made some right howlers, but the majority of the time they come good or I escape with a minor wound. One great example is Otamendi, I took him on last summer because he did well the previous season. He dropped constantly last season, so I topped up hoping things would turn around. I was losing money hand over fist. Most traders would have IS’d him and used that money elsewhere, it was probably the sensible thing to do. I waited thinking if I break even I will sell some, then City have their defensive problems last month and Otamendi is now starting every game, his price is at break even for me. I sold some, yes I missed out on that money working for me elsewhere last season and I was a bit stubborn and a gambler keeping him when everything suggested he was finished at City and getting old. But I was fortunate, I’m now holding far less shares but still hoping he does well over the coming months – I escaped by being patient and lucky.
Ask traders for advice, it’s relatively easy to know which traders speak with forked tongues and which ones are decent people. Don’t follow advice blindly but canvas opinion, always be thinking that there could be an agenda behind any advice given. However, there are many traders like me who have a lot of money invested, spread across the whole range of the market that frankly couldn’t care less if somebody sells 100-5000 shares in X player. Likewise we couldn’t care less if you acquired shares in a particular player because we have no intention of selling anytime soon or for an extra penny per share. There will be traders that buy/sell a player 10X over before I sell that same player, so short term drops/increases shouldn’t be looked at too closely. Some traders out there are bottom feeders, they would sell their mother to get somebody to increase the price of a player by a few pence so they can get out at a profit, so just be careful who you ask for guidance.
Tippers – Nothing wrong with tippers so long as you don’t trust them, make the decision to buy yourself, they can trigger ideas and you can’t know everything about every player. However always ask yourself, ‘Why is that guy tipping a player, surely if they were such a bargain they would want to keep his price as low as possible so he can top up when he has the money to do so?”
The only time I would tip a player is if I wanted to sell them (I don’t operate that way, I’m not a bastard, I’ll sometimes say who I’ve purchased if asked, but I rarely buy a player to sell them short term). Unless somebody is never going to spend another penny on FI or unless they are being paid for advice – why would they tip a bargain, surely they are giving you (a stranger) money they could make themselves!
If the market is going through a down period scroll out. Look at what the prices of your players were a couple of months earlier, most of them will be up overall. I can see my portfolio rise by 10% in a month and then drop 2% in a week and I will forget about that 10% quickly, it’s doom and gloom but very short-sighted. Try not to act rashly. I often see people moaning about drops and in the same breath they say they have had to IS their port of some players because of it! That just compounds the issue. One random guy clearing out his portfolio shouldn’t lead to mass drops all over the place with people over-reacting and following like sheep. You have worked hard for your money and planned your investment, just because some people think it’s time to sell you don’t know their circumstances, so just selling because others do, helps the negative chain reaction.
One last thing – if you opt to sell a hold, in my view you shouldn’t then slam that hold after selling them. Other people have just purchased that hold off of you and others still hold him, they have done you a favour so don’t call them stupid for doing it. Ultimately if you don’t hold a player then it looks wrong to assassinate that player’s value. I’m not saying don’t have an opinion, and I’m never going to change this, but if possible try to have some empathy for the poor sucker (in your eyes) that maybe has just put their months disposable income into that player – maybe it’s somebody’s first trade and you just publicly humiliated them, it might turn out to be their last trade as a result!
Football Index Trends
EJ, what were the hardest challenges you faced during the early stages of your portfolio’s rise to where it is now? Did you set yourself continuous targets and what’s the biggest tip you can give to someone who takes a low player, high futures approach
Hardest challenge was to be patient, when you just start out you will be prone to over-thinking, a week on FI feels like 6 months. It’s easy to over trade and to make rash decisions based on a few red days, or even if you make a few pence on a player to cash in too early. When I first joined the market was a lot different to the way it is today, but I can put myself in a new traders shoes today easy enough. Let’s say you put in £5k, realistically after 6 months (the time it takes roughly to understand the market properly imo), if you are up just 10% that is fine, you have learnt something new, had fun and made a bit of money for a bit of risk. Don’t judge yourself on other traders, everybody is different. The chances are if you are patient, spread your money around the various categories of player that you should make 20-30% from capital appreciation alone (I have no idea if this will hold firm of course). If you over trade or pile into a small number of players you massively increase the risk and you also don’t learn as much.
I have targets for my players but they are pointless to be honest, FI has been constantly changing things so it makes any target moot. The product itself has grown far quicker than I thought it would, which again makes any target moot for me. If you are trading short term then yes it makes more sense to say ‘I will sell at X price’, but if that player scores a hatrick from the bench, gets picked for his national team, then has a big club transfer rumour period what does that do to your target? You’d be foolish to sell because that player reached an arbitrary figure you placed on him some time ago when his situation was different. I did it with Tammy Abram recently, he scored against Norwich at the end of August, I purchased 2000 shares on that first goal. I lacked a Chelsea forward in my portfolio, could see he had put that poor Utd display earlier in the month behind him and I thought if I can make 20p on him per share that’s a nice bit of profit for a player I don’t think is that good for PB. He scored again after half time, his price had already reached my target – so I changed my mind and thought I’d hold for the 30 day IPD wins and maybe some media if he does well and maybe gets England action, £1+ later I sold up. I would have missed out on close to £2k if I had stuck to my arbitrary target at the point of buying – but a month later I’ve done well. Possibly sold too soon (time will tell), but it’s not an exact science and I’m very happy with that trade and the fact I ignored my original target.
If you are taking a low player high volume of shares approach then my only advice is to think very carefully about why you are buying. I have some players I am in very heavy on, Dybala is a good example. I took him on in the summer of 2018, I had been topping up leading into the winter transfer window as I had my suspicions that Ronaldo would mean he would move on. I also suspected Man Utd would be a likely destination. For those reasons alone it would be ludicrous to go in heavy, I may as well put a bet on at the bookies for the transfer to happen. So I had my dream ticket idea, but then if that didn’t happen I had to think of what else could, I looked at age, suitability to PB, chances of winning dividends in the interim, media appeal, other likely clubs. I held a lot of shares of him going into the summer of 2019 and then the strong rumours started with Utd. Things couldn’t have been any worse for him at Juventus last season, so I knew the worst case scenario with his price (without FI’s growth taken into consideration). I believed that if he went to Utd he would be a £6-£7 player, so I held firm despite him rising to £4. My average buy price is £2.77 (I took on some more recently). So I was looking at a juicy profit if I cashed in, but I wanted the deal to happen and believed it would. Some people may think I was being greedy, but this was a well thought out trade with a lot of money. I suspected that if the worst happened and he stayed at Juventus then that would mean he either started to play more for Juventus (he has) or he would be sold in January or next Summer (he still might be). This is where the 3 year bet thing comes in. He is scoring well at Juventus now PB wise, I’m a little concerned the transfer may not happen at all now, but Ronaldo is older and within my 3 years it’s likely he will go or Dybala will take centre stage if he stays. Basically I could have sold for a nice profit at £4 and repurchased if the deal didn’t happen once the inevitable drop took place (if only), I gambled, lost out that profit, but I believed the upside was better than the downside. I had that rollercoaster and I am no better off, but no worse off opportunity cost aside, but the dividends accrued in that time have been adequate compensation for the risk.
So in a nutshell, if you go big on a particular player try and make sure that there is a plan A/B/C behind the trade and know exactly why you are buying that player. If the situation changes be prepared to change. A lot of traders don’t realise that when you hold thousands of a player it is hard work selling them, especially if you time it wrong. IS will kill you with a big expensive hold, so patience and thick skin is vital in my opinion – this is gambling at the end of the day but I have some gambles and some investments as far as I’m concerned, they aren’t mutually exclusive either. I’m getting 10X more enjoyment value from my investment in FI than I am any other kind of investment I have, so you always have to put a valuation on that ‘enjoyment’ aspect as well when considering your portfolio value and trading decisions.
I hope this has been helpful and that we all make good money, enjoy our experience and we encourage FI to make the right decisions for all of us and them. I urge FI to be as generous as possible with their forthcoming dividend review and to consider the wider issues of competition, client retention/attraction and long term ambitions being realised as quickly as possible. But this must be financially possible, the last thing anybody should want is FI to take risks with the platform’s future. If they can’t afford it then hopefully they can make cuts to advertising/sponsorship to fund what is needed, because a bird in hand is worth more than two in the bush. My advice to FI is to look after your existing clients, they are your best sales tool, so give us the confidence to sell FI to our friends/family/colleagues – don’t underestimate word of mouth and don’t take us for granted – give dividends a big rise and introduce something to reward great performances that just miss out PB dividends because there are thousands of players now competing for too few or low value prizes!
@EJ_Footy_Index - this is my Twitter handle.
Hope you all enjoyed that! A shame I couldn't convince EJ to come on the podcast but this blog was amazing!