Football Index: Cash Builder Series – Third Installment

Introduction

If you haven’t done so already, and have not yet tried Football Index (“FI”), I’d suggest that you read our Football Index beginner’s guide as it explains most of the key concepts (including dividends, buying and selling players and commission). If you’d like to follow along, you can join Football Index here.

Welcome to the third article in my Football Index cash builder series for 2019/20. At the start of the season, I deposited £100 onto the platform and my goal is to grow that balance as much as possible. Each month I will top up my balance by adding another £100, but the focus of this series is percentage return on investment rather than cash balance.


If you haven’t already, and are new to the Index, please give my beginner’s guide a read and if you have any questions please reach out to me on Twitter @FPLBraveheart.

The state of the market

The Football Index market continues to grow with a market cap, at the time of writing, of £83 million. The market cap is the total amount invested in players and as it continues to go so too will there be natural growth throughout the Index. One way of working out if your trades are successful or not is by comparing them against the natural growth of the market. If you beat the rise in the market cap then you are a profitable trader (rather than someone simply being lucky by being in the right place at the right time).

The market this month has been very quick to react to someone winning performance dividends on a gold or silver match day (a day with 15 or more games, or 5 to 14 games respectively). The logic is clearly that because of player has won once, he is likely to do it again. I’ve only had one player who has returned a gold day performance win and as you’ll see in the November analysis section below, the player in question increased a very impressive amount!

In November, a new competitor to Football Index joined the scene. It is called Sportstack and is purely performance based and currently is only running match day premier league markets. I’m currently trialing a few ideas with this platform and will give more detail on those strategies next month when I understand the platform more and can offer somewhat proven conclusions. However, my initial dabbling has gone very well. I moved £20 from Football Index and used it in Sportstack. In the last two weeks that initial stake has increased by 226% to £65.43. I’m not going to invest more in Sportstack until I understand it better but my initial impression is that it is an excellent concept and there is money to be made. 

My strategy: overview 

In the opening article of this series, I said that I would be going with an in-play dividend hunting approach. My reasoning for that was that there were a lot of players under £2 who score or assist frequently and so represent good value for returning regular dividends. However, in light of the massive 57% increase in performance dividends announced at the end of October, I decided in November to diversify my strategy and have more than one strategy by which I would profit. To summarise the strategies I’m using, I’ve been targeting players for a number of reasons:

  • they are a young player who has potential to become the next big thing (“youth strategy”),
  • they are priced quite low because they are not frequently competing for performance dividends but they score and assist a lot (“IPD strategy”),
  • they are currently injured (and have been for quite some time) and are nearing a return to first-team action (“injury strategy”),
  • they are likely to move teams soon and so may have an improved chance at performance or media dividends (“transfer speculation”),
  • they are regularly putting up good scores for performance and/or media dividends and are likely to return regularly (“long-term holds”).

In November, I managed to use and profit from three of those strategies and will summarise my trades in November in the next section. 

As promised in last months’s article, as we approach January, I’ll look at identifying some transfer speculation players but I think that it may be too early for me to buy such players (as I’m a small portfolio and would prefer to have my holdings working more in December, rather than waiting for January).

How was November?

From the middle of October throughout November, I purchased shares in 9 players. One was to await a return from injury (Mattia Caldara of AC Milan), two were long term holds who dominate their position performance category (Trent Alexander-Arnold of Liverpool and Joshua Kimmich of Bayern Munich) and 5 players for in-play dividends or otherwise were short-term moves. Let’s see how they got on:


Trent Alexander-Arnold

  • Liverpool
  • Defender
  • Bought for: £4.33
  • Current price: £6.51
  • Dividends per share: £0.16 (3.7%)

Alexander-Arnold was one of the first big rises under the new performance dividends matrix. He had a mammoth score against Spurs before the new dividends were in place despite not returning any goals or assists. This was a sign that he has a quality base score and would likely return performance dividends in the not too distant future. He did just that on 02 November against Villa. His price kept rising through the first few weeks in November but has since started to decline. I’m content to hold as I have him earmarked as a long-term hold for performance dividends. Up 51.03%.

Joshua Kimmich

  • Bayern Munich
  • Defender
  • Bought for: £4.72
  • Current price: £4.25
  • Dividends per share: £0.01 (0.21%)

Kimmich is another defender I bought at the start of November as their prices rocketed on the back of Trent’s big performances. There are a trend of defenders rising as the majority of the performance-based rises linked to the dividend increase were to midfielders and forwards. Kimmich has declined since then as I unfortunately bought at his peak. I’m still holding as I think he represents good value as a defender – as long as he remains a defender! He is one player who may move position soon to become a midfielder and as a midfielder his value will diminish (at least a little bit). Down 11.55%.

Mattia Caldara

  • AC Milan
  • Defender
  • Bought for: £0.46
  • Current price: £0.47
  • Dividends per share: £0.00 (0%)

Caldara has been out for a very long time but is on the verge of a return. He is a goal-scoring defender and my plan is to retain him until he breaks back into the Milan team. It remains to be seen as to how he performs under the new performance matrix but at his current price I think he is a good option for holding to try and make some profit on his return to first-team football. Up 0.13%.


Jamie Vardy

  • Leicester
  • Forward
  • Bought for: £1.16
  • Current price: £1.62
  • Dividends per share: £0.04 (3.44%)

Vardy was bought for in-play dividends and he has been on prolific form during Leicester’s recent good run with an upcoming kind set of fixtures. My plan is to keep him throughout the Christmas fixtures and re-assess at the end of 30 days (possibly refreshing the shares so that I remain eligible for in-play dividends). Up 38.59%.

Karim Benzema

  • Real Madrid
  • Forward
  • Bought for: £1.33
  • Current price: £1.46
  • Dividends per share: £0.06 (4.51%)

Benzema was also bought for in-play dividends as he is always in or around goals and assists for Real. A good target for these kinds of dividends but now moving towards the pricey side. Up 10.59%.
Edin DzekoRomaForwardBought for: £0.90Current price: £0.89Dividends per share: £0.02 (2.2%)Despite being burnt on Dzeko before I have re-purchased shares in him as he has a good set of fixtures for Roma in December (including in Europe) and as he is priced under £1, I think Dzeko represents good value for in-play dividend hunting. Since holding, he has managed to return twice. Down 1.98%.

Cash Builder Summary

  • Balance at start of November: £219.20
  • Balance at 01 December (minus expected commission) : £286.43
  • Monthly Return on investment (%): +30.7%
  • Total Return on investment (%): +43.2%

Rules

  • I will invest £100 in the first week of each month,
  • I will buy no more than 5 players,
  • I will look to short-term trades (i.e. 30 day/monthly cycles) rather than longer term,
  • Every trade I do, whether profitable or not, will be discussed in this series of articles.

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FPL obsessive | Scottish | Top 200 of all-time.

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