Sunday, January 29, 2012

Playing the market

I've had a few questions of late about making transfers with the intention of making money, and the potential rewards this can have. Unfortunately I haven't uncovered any new secret so this post is going to be a bit unscientific, but it will hopefully give some general pointers (and warnings) about how to play the transfer game.

Being first to market
The easiest, and most effective, way to make money is to identify a player who isn't widely held, sign him, and then have him succeed, preferably in a very evident way via a double digit point game or two (consistent 6 point games aren't as effective). For example, after nine gameweeks Gareth Bale had largely been a fantasy disappointment. He had just 26 points (2.88 P90) with 10 of those points coming in one game against Wigan. At that point, if you bought into Bale (7.9m) you would have seen his price rise 0.5m in just four gameweeks and 1.0m after six. By GW21 his price had risen by a full 1.5m. That's great if you bought at precisely the right time, but if you knew how to do that every time you wouldn't be reading this blog.

Being first to market means you need to act quickly, and in my experience, this will more often that not lead to decisions which lose you points. A few other examples of acting early this season:

  • 78k managers signed De Laet after his goal in GW2. He earned 5 points in four subsequent appearances before being sent back to his parent club.
  • After goals in both of the first two games of the season, 83k managers jumped all over Shane Long, who has averaged 3.1 points per game ever since. 
  • 77k managers have signed Gary Cahill, who is yet to set foot on the field in a Chelsea shirt, and is by no means guaranteed a starting place
  • 130k managers bought Leon Best in GW6-7 and he's scored 1 goal and 32 points since
  • After a couple of good weeks in GW6-7, another 130k managers signed Ramsey who has topped 3 points twice in 14 appearances ever since
Granted, these are a cherry picked list of bad ideas but the point is that these kind of decisions can go horribly wrong and will often cost you points, while playing it a bit safer, and checking underlying data before making moves will often cost you money.

The popular vote
As explained by the good folks at Crack the Code, price rises are based on net transfers in for a given week. That means to earn more money you need to be signing the same players as the masses. Sometimes this will obviously be a wise move (such as the aforementioned period of success for Bale), but often the general public will simply be overreacting to a single gameweek and not basing their decision on logic. Making that transfer too may well net you an increase in money but that won't in itself give you any more points.

A large portion of the content on this site works with trying to spot differential players, so signing popular players is somewhat counter intuitive to this strategy. 

Time value of money
We'd all like more money, in the game, and I'm sure in real life too. But as in real life, the marginal value of each million earned decreases as you get richer and richer (what would you do with a million pounds/dollars/euros versus what would Warren Buffett do?) My team value is currently around 104m, with the growth generated through chasing points rather than value. Right now that can essentially buy the current dream team to date if I am willing to make a couple of minor concessions and accept a budget bench. 

That means that the extra ~3m advantage that some teams enjoy is really only buying them a better bench. That's great if you can get it, and they will certainly enjoy an advantage over my team and may likely finish the season with more points. However, there are a heck of a lot of other teams who took the risks required to earn that extra money who have a lot of cash but find themselves too far behind in points to catch up, now that teams have converged and become very similar. 

It takes 20+ gameweeks (at least) to earn enough money to have a noticeable difference, which of course means you only enjoy an advantage for half a season at best. I'm not sure how many points a better bench will generate over half a season but until I do some better research I'm not convinced it's enough to warrant changing the way we operate in the early part of the season (try to identify value based on player's underlying data and avoid needless risks).


gurka said...

I like the idea of this post, the market is where this game is won and lost.

Last season I managed to finish 6000, the reason for that is I managed to pick up on trends quite early or take a little bit of a punt on a differential that then rose in value.

Your right the time value of money in this game, it can only slightly improve your bench at the end of the day and sometimes what you think it improving is not.

nilov said...

Excellent points. But there is also a downside for "getting there first", which is the increasing gap between your team's gross value and net value. For instance my team's gross value is 107.5 mill, but its net value (selling price)is only 103 mil, and that's because I got RVP at 11.9, Adebayor at 8, Silva at 9.5, Bale at 8.4 and Sassegnon at 6.3.
To be honest I don't really care much about my team's value because I have the players I want, but what if one of these guys get injured and sidelined for 3-4 weeks? If I sell I will not get equal value AND will probably won't be able to get that player back when healthy unless I sacrifice value somewhere else.

And on a different topic: The price rise and fall seem very random. For example: between gameweek 18 and 21 Silva had a negative net transfers of 144980 which cost his stock to drop from 10.5 to 10.3, where in the same time-frame Phil Jones had a negative net transfers of 186168 and his price dropped only 0.1 point from 6.7 to 6.6. Is there any logic to this method that I'm missing?

Kalix said...

I believe red and yellow flagged players prices rise and drop more slowly. Jones has been doubts for many games in recent weeks.

could be that.

amtosh said...

Yeah, 'flagged' players prices need alot more NTI fluctuation before the price will change. The ratio is approximately 2.5 times more transfers will need to be made before a price change for a 'flagged' player.

It's all explained on the crack the code site.

I agree with nilov. I also have a team value of around 107.5, down from 108.1 after I wildcarded this week, because I got on Adebayor, Silva, RvP, Enrique, Vorm and Bale when their prices were low.

However, the real value of my team is only 103 which isn't much different from the starting 100.

Doesn't bother me though, currently 1st in my minileague and just wildcarded for the first time. My team has consistent quality across the board and should pick up points:

Vorm Lindegaard
Kompany BAE S. Kelly Enrique Evans
Bale Silva Moses Sessegnon Dempsey
RVP Adebayor Dzeko

amtosh said...

I should add that it's in large part thanks to chris that I'm doing well this season. My charge up the rankings coincided with finding this blog. Haha, thanks chris.

stooshermadness said...

Great post Chris. Nilov makes a huge point too; if RvP gets an inderminate knock, I've got a huge decision to make, having bought him at ~12. And @Nilov - I think one aspect of the erratic price rises/falls, aside from Kalix good point about red/yellow flags is twofold, as the game has grown, there are a lot of managers, I think, who think part of the 'fun' of FF is to make transfers and don't bother too much about point hits and (ii) there are more 'knee-jerk' managers too, who move markets with a good/bad GW on a particular player. Makes the conservative or 'wait-for-team-news' play more difficult when you are sitting on a 0.1 or 0.2 surplus with a particular target in mind and that player is subject to the vicissitudes of constant transfer or kneejerk managers.

vanilla said...

thanks for the post, Chris!

@Gurka: "the market is where this game is won and lost."
Amen, brother!
Call me a gambler, but sacrificing 4pts every other/third gameweek, and having just a handful of successes throughout the season (buying in on Sessgnon, RVP, Nani, Vorm early).. leaves you advantages late in the season other teams will not have. To maintain a lead after GW38, you have to play conservative: that means potentially missing 12pt gameweeks and paying +0.3M more than others to add form favorites.
Whether you utilize these tactics to cover the deficit from a non-leader position is a matter of risk tolerance, I suppose.

@nilov: the transfer price rules are built into the market. it's part of the game. Yes, it's a consideration, but having less-disposable players in yoru lineup means weighing heavier decsions: a great problem to have!

Maverick said...

Nice post chris, TY, i've been waiting for this post for a while, trying to understand how this works (this is my 1st year playing).
Gross value: 108.7
Net value: 105.9
The thing is I started on GW2, so it's kind of like if I had had a 3d WC which cost me the whole of my hypothetical GW1 points.
From what I understand of team value is that there is a lot of movement in the beginning of the season so it's important (team value perspective) to go with the players which have performed on the last GW in the BEGINNING of the week, this can of course cost an odd four points here and there because the player gets injured but i'd roughly estimate that I got an extra 2 to 3 mill by playing it this way.
Team (107.3 value + 1.4 in bank):
Lindegaard (-0.1); Vorm (-0.6)
Jose Enrique (-0.5); Evans; BAE (-0.3); Simpson (-0.2)
Mata; Sessegnon(-0.2); Gerrard; Surman(-0.1); Bale(-0.8)
RVP; Aguero, Bellamy
The numbers after the player are what I would lose if I sold them and bought them right back.
The only three players left from the starting team are Vorm, José and Simpson.
I'll probably be changing Aguero and Bellamy for Dzeko and Ba next week, will free space for at least one expensive defender
Kind of taking chances with Gerrard and Mata, one on them will go for Silva quit soon.
Oh, yeah, and real secret is... watching the games - got Surman two weeks before his 10pt game for the way he plays.
Oh, one last thing, please don't go and bench players which never play (de Laet, Ferguson - 13% ownership, WTF?...), there's no chance of generating value there.

SFQuakes said...

Thanks for this Chris. The thing I like about the fiso site isn't to jump on the bandwagon and chase points, but to stay ahead of the rise/fall of players that I already have targeted for adding or dropping. I might add or drop a player a week sooner than I had planned to in order to save or gain a few pounds. If having an extra 4-5M in the bank just means a stronger bench then I'm happy with that, it allows you to play the fixtures better and to be able to ride out an injury or suspension without having to give up points on a low value substitute or a transfer penalty.


Gummi at said...

The main point is how much the profit helps you gain extra points. The research needed to get a "real" answer would be quite time consuming.

One would have to factor in the points cost (or gain) of getting in early on bandwagons, when to optimize cost vs. points, and how much points gain there is from having a more expensive team in the latter part of the season.

I find the transfer market is moving much faster this season so there is both more chances to profit and less time to react (e.g. buy the players you want) if you don't have money in the bank.