Just to clarify some of this, the aim is to make yields more projectable and engaging to encourage more trading and a more tangible valuation of players #footballindex https://twitter.com/PBMan9/status/1325766445679120384

As an example I’ve been picking up Caleta-Car at 22p. A young international level centreback capable of scoring 2-5 goals a season. I would estimate he is capable of putting up a score worthy of a gold day win one in every 40 games he plays. This is at best a guesstimate though

So this implies a gold day defender win of 14p around once a season. However through poor luck he may hit his big score on a day TAA knocks out a 300, he may hit it on a bronze day and end up with 4p. The reverse is true and maybe he wins a low gold day through chance

If he has a one in 40 chance at a gold day level score that’s great but infrequent. He may not hit a score of that level that level for the first 40 games. In fact it’s fairly likely he won’t. It’s unlikely but he may also hit a winning score twice twice in a row.

This randomness doesn’t effect his underlying dividend yield, it just makes it very variable. It’s a 1 in 40 roulette wheel spun 120 times over three years. The potential outcomes are vast.

So what’s the problem with that? Well the issue is if I’m valuing Caleta at 14p a season it’s kinda insane people are selling him at 22p. So why are they?

I think people
1) struggle to value these players because returns are so abstract
2) become impatient and sell at an irrationally low price due to infrequent big scores

Psychological factors like impatience and risk aversion come into play for traders since there’s no easily tangible value to underpin the price. You wouldn’t sell a 50 pence piece for 30p because you know it’s worth 50p. If someone was selling 50p pieces for 30p you’d buy

But because of the reasons I’ve outlined Caleta’s underlying value can be difficult to grasp. And maybe I’m wrong about it! There’s no real way to know since I can be right about my valuation and yet he still may not return a penny for three years.

And I’ve not even talked about other complicating factors. How likely are Marseille to go deep into a European competition? how likely is he to start for Croatia? How likely are Croatia to go deep into a tournament? How does all of this effect his expected dividend yield?

In essence I’m possibly in a small minority of traders who are happy to hold a player who may well return 0p for three years. And there’s only so much liquidity I can provide to such a player before I’ve had my fill.

And me being sat on a player with +ev with little to no incentive to trade out for his entire career probably isn’t ideal for FI either. Whereas if people are aware Caleta has a tangible three year div yield of 42p there is more likely to be trading around a more efficient price

So yeah I think this effect plays a bigger part in Caleta’s drop from 70p pre orderbooks (with halved dividend payouts) to people selling at 22p now (and a lack of liquidity at that price) than people give it credit for.

You wouldn’t sell a 50 pence piece for 30p but you might if you had no way to calculate its value. You also wouldn’t buy a 50 pence piece for 30p under the same circumstances. Just something to think about when it comes to the structure of the platform imo.