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It's been fascinating to see the IPD replacement proposals on the #footballindex timeline. If we were looking at it as though we were part of the FI team what methodology would we follow? The question I'd seek to answer first is 'what tests must any IPD replacement pass?' (1/6)
I'd then come up with a series of options to develop from there, with only options that pass most (ideally all) of the tests progressed. With that in mind, what tests should be applied? My starter-for-10 would be that all options should: (2/6)
- improve the appeal of FI to external liquidity providers & at the very least not be detrimental to that appeal
- be simple - in terms of the mechanism itself and the overall impact on FI's complexity
- provide regular wins, given the psychological impact of micro wins (3/6)
- be simple - in terms of the mechanism itself and the overall impact on FI's complexity
- provide regular wins, given the psychological impact of micro wins (3/6)
- be financially affordable. As part of that, financially forecastable with low/no risk of extreme divergence from forecasts, in the way IPDs weren't.
- provide some intrinsic value to a high proportion of active footballers on the market (4/6)
- provide some intrinsic value to a high proportion of active footballers on the market (4/6)
- [this is one I think not everyone would agree with, but I'll add it]
Be permanent, ie not something that requires traders to trade in and out of to be eligible for. The aim being intrinsive value traders can seek to project - and not risk collusion/extreme flipping (5/6)
Be permanent, ie not something that requires traders to trade in and out of to be eligible for. The aim being intrinsive value traders can seek to project - and not risk collusion/extreme flipping (5/6)
That's my start at creating a list of tests for a new dividend to replace IPDs. So, #footballindex community - is that a good way to approach this challenge?
If so, what tests should be added to the above? Which of the above are red-herrings/ill-conceived? (6/6)
If so, what tests should be added to the above? Which of the above are red-herrings/ill-conceived? (6/6)
