Firstly I’d like to apologise to FIG and all those taking the time to read this for not making it easier by going on the Podcast. The reason I prefer this route is simply because I value my privacy and I see little upside from potentially being identified by friends/family etc, should they listen to a Podcast. It’s my experience that people change when money is involved, (often those with it and more starkly those around you without it).
To be totally clear I think it’s very important that people highlight their successes on FI. It can be seen as bragging and it often is, the whole point of FI is for us to win money from our football knowledge so talking about successes and failures is natural. This helps build confidence in what others can achieve and if ‘big money’ is being made it means other people will be upbeat about what their money can do for them, however much they have invested. FI has the ability to improve people’s lives in a meaningful way, so seeing those nice wins on twitter is fantastic for everyone in my opinion. It certainly helped me seeing big portfolios and success stories when deciding to invest a relatively large amount into FI. I joined Twitter specifically to talk about FI and hopefully help other traders on their FI journey; this is why I also agreed to this Q&A with FIG.
So with that out of the way, I’ll crack on with answering the questions some of you submitted.
When did you really believe in the index, and how did you hear about it in the first place?
"I was watching the first games of the World Cup and I could see the ticker moving like crazy and it clicked that this was about to take off big time."
I really believed in the index during the World Cup. I started out in the spring of 2016, with a relatively small amount. I read about FI on an investment platform called ‘Seedrs’ and I liked the idea. I must admit that I did grow bored very quickly though as it was just ‘Media’ focused back then and the money moving around was quite small, the market wasn’t very liquid. I dabbled with trading despite this, every time I made 30p-50p on a player I’d sell, but it wasn't very exciting. I would occasionally top up but the novelty wore off quickly.
Around this time last year I started to see my portfolio rise in value and noticed that PB was introduced. So, I put a bit more in and watched my portfolio value increase further. I started to watch more football, and found I was enjoying games a lot more knowing I had X player involved and if they did well I could win some dividends.
Then at the end of 17/18 season I realised I had doubled my money, from not doing anything special at all. Like most of us I wish I had focused on FI a lot sooner. I was watching the first games of the World Cup and I could see the ticker moving like crazy and it clicked that this was about to take off big time. I realised FI must be making money hand-over-fist and it gave me confidence that my money would be reasonably safe for a relatively large, long term investment.
Before I went in big I read a lot, I read FIT’s daily newsletter going back to the beginning, I listened to FIG’s Podcasts, I lurked on Twitter, I read a lot of the FI Forum. I basically decided to take it more seriously. I had made money but nowhere near what I could have made, so I was determined to do it properly if I was going to make a substantial deposit. So this was the point I decided to believe in the Index and commit to it.
How much prep/learning did you do and how has your strategy changed since day 1?
Day 1 my strategy was to just buy some good on-field players and hope they got in the news, nothing special. During 2017 my little deposits went into more of the same and more foreign players of high profile. Last summer when I decided to invest in a big way my strategy was more considered but straightforward. I looked at the top scorers in each league, I looked at the teams that had qualified for CL & EL and also teams that I felt would be competing for European competition this season, so their value increases this year and rapidly once they qualify for Europe next season. I then acquired a mix of players from each league that would qualify for each positional PB. So a good balance which would provide me with as much opportunity as possible to win dividends on each match day for each position. That was the plan anyway.
I underestimated how flippant the market will be, the trader crush on young players, the fact that amazingly a lot of traders seem to completely ignore dividends. There are certain players I owned that I sold because I could see they needed ridiculous luck to ever win PB, players like Mbappe, Lukaku, Diego Costa – I held them and felt that despite being of some value in real life (arguable in some cases) their style is not suited to the PB scoring system, so moved out quickly. This worked to a level but with Mbappe in particular I made a huge error in judgement. Seeing his incredible rise, I did buy some younger players for the future as I had been depositing regularly up until the day after the first G&A announcement. Whilst dividends should drive the market it is still very young and growing, people want exciting players like Mbappe, so this further highlights the need for a share split. It reminds me of trading stickers as a kid seeing these players rise, but it has led to me speculating on potential with some of my more recent acquisitions. I just think there should be more value placed on the actual dividends, but each to their own and I’d be foolish to fight the tide.
Mbappe pays out hardly any dividends currently, so imagine if his price was reduced to £3 with a split, FI will be making money galore and traders will be able to fill their crazy desire to hold as many of him as possible. It’s a win-win and as mentioned even if Mbappe suddenly turns into a dividend machine, most people will re-invest those dividends if the trajectory is good.
Can you tell us more about your background in betting/investment?
I like to bet on the football most weekends. Betting has always been a fun thing for me, it would make matches more interesting, and I like the idea of my understanding of football paying off in a meaningful way.
When FI came along and introduced the PB mechanic, it ticked all my boxes. I know a lot about football, I understand how football works, I now understand how FI works and it was a great marriage. The key for me is making money from something I love to do.
Another great perk for me is waking up in the morning earning X amount in dividends, and knowing that same player could win me money every day for the next 1000+ days without spending another penny on him. Plus I can probably sell him back at any time for a significant profit, especially if I wait long enough.
Investment wise, I have done a lot of different things-I’ll list a few of them:
- I looked at Peer-Peer lending, I was earning between 5-12% for a few years – but I sensed that increased competition was leading to risk taking by the P2P platforms and they were starting to recklessly gamble with my money to gain an edge – so I have left most of these. Their quest for growth was starting to hurt the clients they had already signed up as loans were not being considered as carefully as before – (this is something FI need to be very mindful of and I’ve explained why at the bottom of this blog post.)
- I have dabbled with trading certain commodities, I read everything I could about Sugar, Coffee, Cotton etc, but it was riddled with contradictions left right and centre – it was just roulette. I have also held investment funds and have seen them do well, but I think we are in for a rough ride over the coming years so I withdrew a lot from those funds to invest into FI. Where I think my money will both be safer and work much harder for me, not to mention 10X more fun.
- I have also traded stocks. I read everything I could about the companies I was looking to invest in, I’d read expert reviews like with commodities. But again, one supposed expert would say the opposite to another supposed expert, so without inside knowledge or actually doing this job as a full time profession I just saw it as a casino. Incidentally, I often see Tweets from people saying “X player has just scored, played great and yet his price has dropped, it makes no sense to me”. I can explain that easily enough I think, but trying to explain the rationale behind the stock market moves is something I struggle with, there seems to be little common sense with the markets at the moment! There is too much shenanigans going on with capital markets for my liking, too much relying on other people’s knowledge/actions – so again I have downsized my stock portfolio.
The best unique selling point FI has is that everything is very clear, how players score points for PB, how dividends are awarded, how the trading works on price. Stocks and most other investments are not as clear, they can cut dividends, the company can get taken over, there are millions of things outside of your control that can affect your investment. With FI there are lots of small things, injuries, transfers, form, media issues etc, but most of these are somewhat predictable and if it goes wrong it can often recover quickly with minimal damage. I see each of my players as a company I have invested in – I know a million times more about a footballers qualities related to FI than I do about one FTSE 100 mining company compared with a mining company listed on the Australian stock exchange for example. With stocks we are only told what the company can get away with and there is often a lot of waffle, where as we can see our product in the flesh every single week with FI.
FI should appeal to anybody that knows about football and plays the markets. I’d advise FI to make more of an effort to convince investors that their product is the same side of the coin as investing in stocks, just ten times more fun, more transparent and probably much more lucrative. I think the move into G&A damaged a bit of my confidence though because it came from nowhere and I had invested a lot of money based on the values of the game being played at the time. I hope we don’t see FI interfering too much with things like this, which hinder one part of the market for another’s benefit.
For those interested in why I believe a player sometimes does well on a match day then drops in value, it is simply due to the scale of the market. It’s not hard to move the market at the moment, so if somebody with a few thousand shares changes direction that can mean a significant drop, it can also spook others which can compound the issue. Basically you may have picked right but a holder may have to exit for some other reason and that is one of the unfortunate aspects of FI whilst it grows. This time next year I imagine the index will better reflect player performance and somebody needing to withdraw to pay for a wedding, mortgage etc will not cause big short term damage to a particular hold. Throwing in G&A has just compounded this issue. The market needs to grow rapidly to reach its potential, but it was too soon for G&A in my view.
Do you have a current strategy?
My strategy is hold tight. I have tried playing the ‘flipping game’ and I’m not very good at it. I have a relatively large portfolio. Most of my holds are 1000-3000 of a particular player and I have 200+ players right now. It is hard to get out of a player efficiently and quickly without killing your profits with the spread if you instant sell. There are exceptions but if a player does well, why would you want to sell if you are in this long term? Almost every time I have traded out of a player I have ended up regretting it not long after. I really regret every trade I made back in 2016/17 for peanuts in capital growth. I don’t want to be saying the same thing about players I sell during 18/19 in a couple of year’s time.
Despite the Footie on a rise at the moment, the money in the index has never been spread as wide (because of G&A and IPO’s), so even with my 200+ players I have been experiencing a loss in portfolio value over recent months – this should not be the case at this stage in FI’s development in my view. I fully understand that if you are quick, lucky, buy/sell small quantities, or very well researched there is a lot of money to be made at the low end of the market. I believe this is mainly (not solely) because newcomers are operating at this end and there are a lot of sharks in those waters. Undoubtedly there is skill involved as well, not everyone making money at the bottom end is being crafty of course. There is a nice feeling associated with finding a sub £1 player and watching them rise to £3+. A lot of people think like this currently because the prices at the top end are too high, so it’s forcing newcomers to become experts in ‘Mickey Mouse’ footballers in the hope they find a superstar. This is why we see wild swings at that end of the market and why some experienced traders love operating down there, it’s cheaper to trade and easier to move markets. It’s just not for me and I think it’s ultimately harmful long term for FI’s ability to retain new traders, but sometimes people need to learn the hard way – it’s just important they come back for more and don’t run off.
My focus is on buying players for dividends, because eventually the market will move in that direction more than it is currently.
Are you thinking of investing more? If so, before or after SS?
No. I’m not thinking of investing more at this time, I have as much as I feel comfortable with in the Index for the time being.
I have been advocating a share split for what feels like a very long time. Despite some traders throwing out accusations that this is self serving for a rise in the players I already own, it is much more complicated than that. We are all on FI to make money and hopefully the majority of traders are enjoying football matches more than they did and enjoying engaging with fellow traders as a bonus. There are some traders on FI with significant amounts of money invested. Every trader is important, but fundamentally that large investor is crucial to FI at this stage in its development and I feel they have been neglected a little recently which gave me some concern back in October.
"Most of us have enjoyed wonderful growth periods, but taking big risks in start-ups ought to be rewarded otherwise nobody would have made the money they have, small or big investor."
A share split was needed in September in my view and I have been very frustrated with FI and traders opposing a share split because ‘the market was working just fine’ according to them. I am a proactive person rather than reactive and it was clear as day to me that the rises during July/August could and should have been the rule. There is always a lag after moments of euphoria and deposit bonuses papered over the obvious cracks in regards to player pricing stalling at the top. My over-riding complaint was ‘what’s the point in spending millions in advertising if only a select few people can afford to buy a meaningful number of shares in the players they actually want?’
Maintaining the wonderful growth was easy to accomplish by ensuring the top players are priced at a level that appeals to the thousands of new eyeballs that are on the platform, instead existing traders saw the huge profits they were making and decided to spend more of their money topping up, further increasing the prices. Newcomers were stuck, deposit an uncomfortable amount of money to buy the best players (that were increasing in price because of the buoyant feeling from existing traders), or spend the £500 risk free amount and buy a bunch of riff-raff. Chances of winning PB for most top players is very hard, but for cheap players it’s a pure lottery. So inevitably they would not win PB with their small portfolio of players, likely if they hold one or two shares in the big boys they may win MB, but they only get a few pennies for their trouble – hardly worth the time/hassle of learning something new and risking that sort of money on such little returns.
G&A adds even more complexity to this as players drop for playing well and scoring now, the opposite of what should be happening, so it will severely damage confidence of newcomers! It will also not help long term traders as many have no idea where to put their money as everything is so erratic at the moment. (Clearly the trend now is to buy certain players for the share-split, so many other great long term assets are being sacrificed to catch that train). Before G&A my portfolio was 90% green, now it’s 50% green /50% red and I have a broad portfolio. Too many traders are needlessly seeing that horrible red throughout their profiles at the moment unfortunately.
Furthermore as mentioned above, it was obvious to me that sharks would operate in the ‘newcomer’ territory £50p-£2 level, we have the pump/dump schemes that highlight this and kill the confidence of new traders. We also have the issue that a new trader is buying dross for short term G&A, or speculating for long term youth prospects in the main, which will not pay dividends for quite some time or see meaningful cap growth for several months/years in some cases. Whilst experienced traders understand this, newcomers are used to instant gratification as FI are attempting to migrate them across from the bookies. It doesn’t matter if you win £10 in dividends if your portfolio value has dropped by £11 – you walk away a loser despite winning the game, it’s not healthy.
Gamblers are the least patient people on earth because they often crave a rush and instant gratification. There is minimal rush to be found at the cheap end of the market. G&A was introduced to help with this, but FI totally neglected their existing user base with this move. It was unintentional I have no doubt about that, but they damaged anybody with defensive players and a large portfolio built around the old PB framework. Cheaper players became more desirable, so money left the top/middle market to fund this lust for quick wins and newcomers were encouraged to buy poor long term holds for instant gratification. The focus should be trying to convert gamblers into investors, it adds stability, loyalty and a great deal more money being deposited. It doesn’t mean so much in commission short term, but long term it’s better for FI as trader retention will be much higher.
So a share split would have seen the market rise rapidly without the need for Deposit Bonuses. Existing traders would not have needed to be hurt by G&A’s introduction, newcomers would have the opportunity to own a meaningful amount of shares in the players they want rather than being limited to the amount they can afford with their initial deposit. I doubt many join FI and deposit thousands, most start small, learn the ropes, get a feeling for what works for them and then if they like it they build up their investment levels. Dividends are important for some but most traders are focused on capital growth in my view, especially newcomers as the dividends are tiny unless you have a large portfolio and see FI as an investment. More focus needs to be placed on dividends by FI and they need to take a more long term view with their decision making.
The relatively poor overall performance over the past couple of months is purely down to the failure of FI to introduce a share split riding the wave of happiness and fantastic word of mouth being generated during the summer. The introduction of G&A was ill timed in my opinion as the market was too small and it was obvious to me that confidence would be damaged across the board at a delicate time. All the blame has been put onto G&A for the dips of late, but the failure to split the shares earlier is the real issue here, I have absolutely no doubt about it. For the avoidance of doubt I know the Footie is growing, but it could be far higher by now if they had been proactive and made a share-split sooner. Word of Mouth alone has cost them thousands of new traders during this period.
So whilst I am delighted a share split will occur during Q1, it is annoyingly from a position of relative weakness rather than strength compared to where they could be. They have missed out on immense growth opportunities during the past 4 months. Many people will have looked at FI and walked away during this time, I’m confident everyone who likes gambling and football will have heard about FI by now. FI have done an incredible job marketing the brand, top notch stuff – so that wave of new traders was unfortunately missed as it’s hard to get somebody to look twice once they have dismissed something.
An argument I often come across for a share split not being necessary, is the issue with dividends reducing and that being less appealing to old and new traders. It’s true but capital growth is where FI is at for many people at this time unfortunately, it will be for a few years yet. Once natural growth has reached a certain level, that is when dividend investing really kicks in – this is when the market is mature and FI changes into a ‘proper’ trading platform for me.
I also think dividends are due a rise, so maybe the share split ratio will not mirror the dividend splits. I would certainly expect dividends to be lifted shortly after the split if not at the same time. The market has expanded a great amount without a dividend increase, the G&A layout from FI’s perspective is something I would have avoided as mentioned and that money would have been far better served aiding the PB dividends, or having an extra winner for each category on big match days. With this share split and dividend reduction they must not show any priority to G&A over PB or MB, if even more edge is given to G&A trading then this platform is not what I invested in – that’s what I go to the bookies for!
The focus should be - Share/Split-Dividend Increase, Share/Split-Dividend increase. This pattern can be repeated forever or certainly until user take-up is maxed out. It’s essential, a shares-split and dividend increase should happen regularly in order to keep the top players at a price that is realistic and appealing for new traders and the growth trajectory can continue. This is the only way FI can open in new territories and be appealing long term, it is the only way new users can fall in love with the platform and it’s the only way existing traders will feel emboldened to deposit more and continue to praise FI to all that will listen. The majority of traders will re-invest their dividends if the product continues to flourish, the extra costs are non-existent to FI for doing this – but the rewards for all are immense.
At least FI are acting now and the lost time can be recovered easily. My views should not be interpreted as a lack of confidence in FI long term, as I wouldn’t have the money invested that I have if I was overly worried, so I’m not in this for the potential quick bump that a share split should bring. I see FI as a core component of my investment portfolio for the long term, but I need to see them be more proactive and to think more critically about the decisions they make and the impact it can have on people’s hard earned money. I’m critical at times because I want FI to fulfil its potential. I think they have done incredibly well so far and I am delighted with my investment to date, but it could and should be a lot better.
If you were in charge of FI, what would be the top 3 things on your “to do” list?
I've gone for 6, as I thought 3 was too few!
It's tricky to answer because I don’t know enough about their finances, quality of staff, short/medium/long term objectives. Some of my ideas may not be feasible, they may have been considered and rejected for reasons I don’t know about, or they may be brand new concepts that maybe start conversations at FI HQ. It’s easy for me to provide a critique from my armchair, like most of us do watching the football. However FI can take this product in many new directions and there are only so many hours in the day. They have accomplished a great deal already. But making assumptions from my limited outside perspective, I would do the following:
Immediately I would set-up a trader consulting panel. FI are a young company with a relatively small team. They have done exceptionally well to get it to this point and have shown great intelligence and innovation. However they have also shown recently that they lack an element of critical thinking when it comes to the effect of their decisions on us traders who face the ramifications. This may be down to the fact that FI employees can’t trade and I agree with this rule. There are a lot of traders in FI with money they cannot afford to lose, irrespective of the ‘warnings’. People want to risk money to make money. So FI need to be 100% clear about the respect they have for the money people have invested. The way G&A was handled showed little respect for the money people had already committed to the platform – it was not even considered. The quest was clearly for new money and increased trading, fair enough but you should always be considerate to those that have backed you earlier and are playing to the existing rules.
The G&A decision was made with a closed group of people ‘need to know’. Quite simply more people needed to know because they completely ignored the issues their decision would make on the wider market. They believed this would be a fantastic initiative embraced by all traders, new and old. If they had a panel of trusted traders to consult, the flaws in their idea would have been pointed out instantly. They have made steps to do something with an account manager for certain traders. I like the idea of aggregating feedback, but this is often post an announcement – it needs to be before implementation. They also corrected some of the more blatant errors with their update to G&A in November, but it’s still causing unnecessary issues with valuations and scaring old/new traders.
I also like how FI interact on Twitter with polls etc, but this shouldn’t be a democracy and the words of some traders need to be listened to more than others. Somebody with £500 invested (or nothing and just a twitter account) currently has the same voice as somebody with £500k invested. It doesn’t mean one is more intelligent or even correct over the other; it does mean one should have more consideration to the long term direction of FI than the other. It’s easy to pull out £500, not very easy to pull out £500k without causing mayhem and losing a fortune. Now the twitter polls are not that serious, but Adam Cole did use one to justify a decision recently at the Dublin Trader meet (I may be mistaken here), so clearly those polls are being used to aggregate ‘trader opinion’, its corrupt data in my opinion and shouldn’t be used for any decision making as far as I’m concerned. No business decisions should be made sourcing random feedback. There are a lot of idiots around that can’t think further than their own nose, so it’s important FI treat much of this polling and twitter feedback as an indicator but nothing more than that.
I understand there may be issues with foreknowledge/insider trading with having a trader panel – but that is a small price to pay for FI and there are obvious steps that can be taken to avoid this drawback. Those traders with significant amounts of money invested have a much larger interest in FI being successful than even the employees of FI, let alone a trader with a few hundred pounds committed. If FI fails, then employees may lose their jobs ‘eventually’ and move into something new as they have all done very well to get FI to where it is today, it’s brilliant for the CV. However, those traders with a lot of money locked up will take many months, years or even decades to earn again and in some cases due to age or life situations it may be impossible to ever recoup that money lost. More than that it can harm relationships and ruin lives. So I strongly believe engaging with a panel of traders before big changes are implemented is vital to avoid unnecessary mistakes and quite possibly improve upon the idea being planned. Money shouldn’t be the only criteria, but those with a lot of money committed have to care about FI’s long term success as much as their own personal trading. Larger traders in the main will not be exploiting newcomers for a quick buck as they know a small trader today could be a big trader tomorrow, or that new trader could introduce 10 more traders if their experience is positive.
We are all trusting FI to do the right thing with our money, but there are a lot of very intelligent and experienced, (dare I say benevolent) traders using FI, they should be engaged with to make FI as great as it can be. It’s an untapped resource and most would do this for free on account of having so much money/time invested in this product.
Engage with IFA’s – Financial Advisers like to have innovative ideas to pass on to their clients; it is a much easier sell for an IFA who is being paid to provide advice than a random trader down the pub selling the virtues of FI to anybody who will listen. The fact FI is tax free is a huge USP. Yes the word ‘gambling’ can be scary, but the stock market is gambling as well, any investment is gambling (even holding more than £85k in a bank account is gambling). I would have a team of sales staff roaming the country with a detailed prospectus highlighting the growth of FI, player yields, testimonials from traders, example strategies etc. I’d then have a PDF version which each IFA can have and can pass to their clients that like a little bit of risk and are interested in football (not essential). I’d also set-up a series of simple funds for the passive investor to get into at FI HQ, Dividend Fund, Youth Fund, High Profile Fund, French Fund, Italian Fund, High Frequency Flipper Fund (haha) – basically making it as easy as possible for people to park money and let somebody else manage it for them. There is no reason I can think of why this wouldn’t be immense for FI as it would enable people who have no understanding of football to invest, because most people are invested in funds blind anyway, they just look at the annual returns, risk and fees. I believe there is a bear market on the horizon globally, people are starting to withdraw from the markets. The banks are offering nominal rates, it’s a great time to attract some loose money at the moment. So FI should be engaging with accountants, IFA’s, HNWI networks, etc, and making it easy for their clients to allocate their money into a range of funds for a range of purposes. There may be regulatory issues to overcome, but that’s what good lawyers are for!
Share split January 1st and increase dividends shortly after (if not the same time). Every day they delay is a day wasted, they are spending millions on advertising and those eyeballs need to turn from window shoppers into long term buyers. If there is money in the kitty I’d hike the dividends in order to attract as many customers as possible as quickly as possible and to encourage more people to deposit their savings into FI rather than other places. The next 6 months are a crucial period, interest rates are low, new financial year in April (compete for that ISA money), have as many people trading as possible and good news stories everywhere drowning out the few moaners. Once you get used to winning dividends most days because you have a large portfolio it is very hard to walk away from that – so getting traders to deposit in a meaningful way is crucial as they are a captive then. It’s difficult to sell up quickly, so once you are in you are in barring any serious miss-steps from FI.
If you have a portfolio of 10-20 players you could have all your players play on a Saturday and nothing on a Sunday, so enable people to buy more players which means they use the website more and will spot more opportunities. Personally my investment levels increased the more I was on the website, as I would see opportunities everywhere and couldn’t get my money in quick enough. Most people don’t want to watch some random French football match because they have some no-mark full back playing as that was all they could afford. They want to have players competing in CL matches, the top matches in the 5 domestic leagues – the more people watch their players and watch the website the more they will deposit – but the price for those players HAS to be realistic for a new user at all times. I see no way of keeping prices practical for continued new trader appeal other than continued share splits and dividend increases.
I’d introduce tiered PB next season. The Sunday sell off is depressing and worrying, granted FI make money but they make enough with standard trading as they said people hold for 3 days on average I believe. Just watch the ticker for 10 minutes during matches and you see how much money is flying into the FI coffers. With the amount of PB players now applicable it is difficult to predict who will win, you get a few outliers but on the whole it’s a bit of a lottery. MB is more predictable so don’t change that. But PB needs to have more winners on a busy weekend, there are far too many losing bets on a weekend and as a result people whip out their money Sunday/Monday – this recovers later in the week, but how much of that is money lost forever out of the market and how much is existing traders topping up? Let’s say 100 people leave FI every week and they gain 120. That growth of 20 users is tiny compared to what it could and should be. The time for FI to make real money is 2-3 years from now and it will be 10X more lucrative for them if they sacrifice short term profits now to build a massive user base that are all positive and talking up FI – it will spread rapidly into new territories and will really break the barriers they need to break. I don’t know the financial situation of FI, but I strongly believe that they could afford to do this if they are sensible and use financing/cash flow appropriately. Debt is fine for a growing company with a monopoly and provable profitable business model. Traders should not walk away from FI and I know several that have unfortunately.
Basically I would double down on the growth and build the product into something quickly, destroying any chance of emerging competition and cementing the loyalty of traders.
I would stop all talk about ‘other indexes’. We don’t care about other indexes, (or shouldn’t if we are serious about making money on FI), it distracts; it puts fear into people like me that resources will be needlessly spread. FI will lose traders to the new indexes to capitalise on start-up growth assuming it follows a similar path to FI – but anything else isn’t football. They have a perfect idea, globally loved sport, provable concept and yet it’s still so far from where it could be – any spare money should be spent on improving FI. Any time needs to be spent on improving FI. So I’d shelve these new index plans until FI has matured and is taking care of itself. If they run before they walk they will fail.
I appreciate they may want to get started on other sports to avoid competition – but let competition make the mistakes and learn from them if that is your worry – there is nothing that comes close to football and a bit of competition is healthy if it’s a new market, it keeps you on your toes. There is 10X more money to be made with football than anything else so I’d ban all talk and thinking about new indexes for the foreseeable future. If you turn FI into what it should be then you can snap up any competition in due course, as they will be minnows compared to the whale of FI and will have done all the donkey work for you. Talking about new indexes makes me nervous and if I saw this on the near horizon I would be ripping my money out of FI, I imagine many serious traders would.
One final one I promise – as made clear I have confidence in FI and believe they have a fantastic business model but I think the closed nature of their finances is handicapping them. I imagine they are well financed and solid as a business. Therefore I think it would help ease concerns some traders may have if they are more transparent. I have put my money where my mouth is, but undoubtedly there is money in people’s accounts that they would love to invest in FI but are worried about the financial stability of the company. Serious investors need to trust where they put their money. When you start talking 6/7/8 figure amounts you need to know that this money is relatively safe and potential losses are on playing the game and not anything to do with FI suddenly going out of business.
I often see posts saying doing XYZ would cripple FI. Nobody knows if this is true or not, but the fact people are making assumptions like this tells me FI need to be more transparent with their financial position if they want to maximise growth and appeal to a different type of investor rather than the gamblers that they mainly appeal to now. I have a belief that FI are in a very strong position, but they should try and take away that unnecessary but maybe fair worry some people may have.
What’s your withdrawal strategy?
I don’t have one, I see FI being around for many years to come if they make the right decisions. For the first time recently I was going to bed worrying about FI and what my portfolio might look like in the morning. I know this feeling is shared amongst other people, not fear, just a niggle that wasn’t there before. FI have earned our trust, but they haven’t earned our uncompromising loyalty – so if they keep making steps in the direction of G&A which I perceive to be ill thought through or counter my personal risk appetite, I will downsize. If they do what I think they are capable of then I will increase – for the time being the jury is out for me, so I’m waiting. FI are going to make miss-steps here and there, it’s how they react and adjust that matters, they did very well recently following the G&A debacle and it should give us all a bit more confidence that they want to do the right thing and listen.
Trading strategy wise, how are you going to approach the winter breaks across the multiple PB leagues?
Again I’m doing nothing, I have a couple of transfer punts that I will watch and act if necessary – but I can hold for 3 years so a few weeks off is no worry to me and I don’t like selling a percentage of my shares in a particular player. I like to be all or nothing, otherwise I kick myself if that player does well after selling some and kick myself if he does poor and I haven’t sold them all. So whilst it’s good to hedge, I feel I have enough hedge with a 200+ player portfolio.
Almost every time I have sold a player he has risen not long after, obviously because the market is still growing overall. I may be able to sell my winter break players now and buy back cheaper in a couple of weeks, but it will take time to sell those players and most traders operating in the £3+ market are a bit more long term so I don’t think there will be much to be made if you factor in the spread for instant sell and commission. There are exceptions and I have no doubt that there will be traders that are a bit more nimble than I, they will likely clean up during the winter break. I am primarily using FI for my enjoyment of football and ability to make money from my hobby – if I turn it into a job then that fun aspect starts to diminish. I have no doubt that if I subscribed to the data-sites and researched stats like crazy, I could make a lot more money – but I simply don’t want to do that yet as I’m content with my portfolio tracking the natural growth of FI. Until G&A was introduced, if the Footie was up I was up, down and I was down, now the Footie has nothing to do with my portfolio unfortunately, it’s a shame but I expect the natural cycle of things to revert back to this being the case eventually.
What has been the reaction from friends you've discussed it with?
Excited initially, but then very quickly sheepishly admitting it wasn’t for them. The main reason being the price movements are irrational and erratic and it’s too expensive to buy the players they would like. For the past 6 weeks I have won dividends nearly every day but my portfolio value has declined by more. I understand why and know this trend will be bucked, but newcomers do not and will simply see their player playing well and often losing value! A couple of people I really worked on loved the idea but couldn’t justify spending a large sum to buy a meaningful amount of a top player to win X amount in potential dividends because the capital growth is practically non-existent at the top level (or was until the S-S announcement). A couple have been spooked because of the way G&A was introduced and how in an instant a third of the markets value just plummeted and poor buys were artificially increased in value which knocks on to the premium players – friends were astonished that FI acted in this way and couldn’t believe I entrusted so much of my money into a business that could operate in that way. I had no argument against this as it was truly awful in my view. Thankfully FI apologised and provided a deposits bonus to compensate. But these bonuses are now a problem in themselves because the market slows down straight after and most people are reluctant to deposit without a bonus.
I understand the ROI is still very good on the whole even if playing for dividends, but for the risks involved for newcomers there has to be both dividend potential and solid capital growth prospects. It is a hard slog pitching to friends and associates, it should be the easiest thing in the world. FI have a 25,000+ sales force willing to work for free, this needs to be embraced, we need the tools to sell it though. I was telling everyone who would listen to get involved with FI during the summer, not so much now. Most of the 20-30 players I acquired in recent months are all at a loss so I can’t in good conscience convince people to spend their money with so much uncertainty. I have long term confidence as mentioned, but I can do without friends/associates contacting me every week asking why they are losing money despite buying what were good players until G&A was introduced (even the G&A ones are losing money in most cases). When the market gets back to where it was I will be back on the sales campaign.
One thing that helps attract newcomers is a deposit bonus, but I’m not a huge fan despite making a lot of money from them. A couple of us traders were talking about this on twitter recently, following that conversation, I hope the next time FI launch a deposit bonus that it is:
- Uncapped (why not allow people to deposit £100k and benefit if they want to, it can only help and is just like 10 people depositing £10k?)
- Has a play through requirement to avoid the ‘chancers’ that just take the 10% and run, it will make things more stable and only people that are serious will take part
- It is made clear that there will be no bonus for X amount of time at least and that number is stuck to! This will ensure the market continues to function with fresh investments post a deposit bonus, at the moment too many traders are withholding deposits for a bonus which may never come. 10% is peanuts if it means you miss out on 6 months growth.
How much focus do you give Potential PB compared to Proven PB winners?
A bit like the above, I have predominantly focussed on current PB that is proven or looks like being very soon. There are some cheap players I watched carefully that always seemed to score high but missed out on the dividends that I punted on, but that has continued so I have moved out of them. There are some like Dybala, SMS, James Rodriguez, Bale, Eriksen & Isco that I have stuck with for both PB hope & mainly chance of a transfer. I’ve punted on a few youngsters but recently exited Sancho & Nelson – probably a mistake?!
How do you decide when (if) you’ve missed the boat and it’s too late to buy into somebody?
I don’t think any boats have been missed yet, granted I could have gotten a better seat on the boat if I’d acted quicker but the market is probably less than 10% its potential size if the correct decisions are made by FI. I do find it very difficult to buy back a player that I have sold relatively recently, it’s a weakness I have and I think many people have it. You can’t look at that player the same way once they have been cut loose, especially if to buy back you have to pay much more than you sold them for. Pride comes before a fall, but certain players like Mbappe I can’t stomach buying now simply as I have missed out on close to 100% growth in such a short space of time and the fact I am waiting for people to finally realise that dividends drive the market I don’t want to miss the 100% rise and then get stung on the decline if it ever happens.
I don’t trade much at all day-day. I tend to go in spurts when I do, I’ll cull a player completely if I have no hope of selling to market and will tolerate the spread using IS at times - I hate throwing money away using IS but sometimes it’s best to take the hit and move on.
What is your opinion about Kylian Mbappe? His price rise all the time non stop , do you think will be the new Messi or Ronaldo ?
I like watching Mbappe play but he isn’t involved too much. I think he will never quite make the level of Messi or Ronaldo in real life. He is powerful, rapid and technically fantastic, but he lacks that X factor, he is a much better version of Rashford, it’s something about the way he carries himself, the raw hunger doesn’t seem to be there and his game is mostly pace. I imagine his career will go a bit like Rooney’s, drop off when the years of wear and tear catch up with him. I reckon by his late 20’s, we will be saying ‘that Mbappe was some player a few years ago’ – he does look great though and probably the closest thing to Messi or Ronaldo out there, just not sure he has that magic ingredient to be one of the best ever.
For the Index I have no idea what will happen, he shouldn’t be the price he is because we have seen so much of him now and he plays for a team that dominates – yet his scores aren’t that great. Granted he is up against Neymar, but so what? If he moves to another elite club there will be other ‘playmaker’ type players that the ball is given to more often. He is a finisher, somebody that creates something out of nothing, but he isn’t a playmaker. The ball doesn’t gravitate to him and if there was no Neymar teams would be able to double up on him quite effectively I think.
I like to think I have common-sense but the market is not making too much sense to me at times, obviously I understand the potential, the hype and that is appealing to many people on FI. But he never looks like being a prolific MB or PB scorer for me, so when the market becomes more sophisticated I expect his price to reflect his FI value, at the moment it reflects his real life value. I’m disappointed in myself for not letting Mbappe just ride in my portfolio, but I gave traders too much credit, assuming they would be able to differentiate between real life and FI rules, many traders simply don’t yet. Now watch Mbappe post 3 games of 200+ points on the spin. I suppose that’s what makes FI so much fun, anything can happen!
I’d just like to close by saying that I value all the work FIG, FI and the other traders do to promote and discuss the nuances of the platform. It’s been a fun experience getting more involved with Twitter. It's great engaging with people from all walks of life with a range of levels of money invested and opinions. I have great respect for all traders committing to FI and what their money means to them – we all need one another to make FI what it should become and to each benefit financially from the journey we are on. There will be decisions that we don’t all agree with, but fundamentally we all want what is best for ourselves and FI. It’s vitally important that new traders can join easily and are not exploited as they learn the ropes, existing traders will deposit more and FI will make money as a result. I hope FI starts reaching its potential even quicker during 2019. I also hope my views have been helpful for those interested in them and my passion for FI has come across as intended. It is not a perfect beast by any means, but it can be and should be.
If anybody from FI is reading this then I will leave you with one piece of important advice. There will be many directions you can take this product, there will be lots of fantastic and innovative ideas that are dreamt up to help that growth. However the number one box that needs to be ticked before any of these ideas are implemented is that any existing trader must not be adversely affected by any amendment to the framework you have pinned your colours to. You can not change horses mid-race, it will be tempting as when you start a business you can’t possibly see all the angles, but many great businesses have perished because they have taken their existing clients for granted in the quest for new clients. If any trader stands to lose because of a new idea then you have to let it go, no matter how good it could be for profits, new users, etc. One eye always needs to be on the clients you have worked hard to gain and that have invested on the back of the rules you have set-out. You are too far down the track now and whilst safeguarding old traders is not as exciting as attracting new ones, it’s how you guarantee success. Trust is a hard thing to earn, but it can be gone in a second, so always value the bird in hand more than the two in the bush. Any new idea has to benefit every singly existing trader, if you stick to this mantra and game it out, thinking two, three, four steps ahead then you will not go far wrong. Thanks for the work you have done so far.
I’m sure every one of us is delighted FI came into our lives and with the right tools at our disposal I am sure we will all do our bit to help build this into something truly special, that benefits all of us including the company.
Merry Christmas and Happy New Year to one and all!
@EJ_Footy_Index - this is my Twitter handle.
P.S. I’ve noticed traders using ‘EJ’ as their trader name lately, so be aware as it will almost certainly be somebody trying to profit from passing off. Not that it should mean much but maybe knowing I tend to buy large blocks and tend to keep long term, it could be the exact opposite situation afoot. When money is involved it attracts all sorts of crafty individuals unfortunately, so be mindful.
Hope you all enjoyed that! A shame we couldn't have EJ on the podcast but this blog was just as exciting in my opinion!