I still think Weng's most recent fails relate to Beta not Alpha He completely missed the market inflation and ended up buying Laca and Auba at peak He should have made some decent investments in the last 3 years instead of leaving cash in the bank - the value of which has been significantly eroded. Meanwhile he remained over invested in assets with no real value. Liverpool have been much sharper about trading up with the rising tide. Wengs only real success was Alexis but the he lost half the value thru incompetenace
Exactly! At the risk of taking the asset management analogy to far - in today's market we don't see the same information imbalances that Weng exploited in the good old days when English clubs didn't have the scouting networks and contacts on the continent. Everyone already knows who all the hot players are and clubs won't usually mistakenly sell them on the cheap. (Mahrez and Kante are exceptional) So it all comes down to your valuation model. Who can value the players most accurately? That is where the arbitrages lie. It is also why we see such huge valuations for players at the margins - where only 2 or 3 super elite players are available and they have massive value to the top clubs So the problem becomes how much should you pay for a guy like Draxler who has the data at age 20 of an emerging superstar. The last investment Wenger made like that was Nasri IMO Anyway - people mocked Utd for the Martial deal, but I think they were reading the market rather better than Weng
For me Weng's other greatest fail was Suarez and the 40+1 When that didn't work - he should have gone balls out - as Suarez real price was revealed to be 65-70m (depending on what number you believe) So once more Liverpool understood better the real price
Didn’t Liverpool’s president say 40 was the actual clause? IIRC, he admited to basically lying about it after the window closed, to be able to sell Suarez for a higher fee.
Yes 40 was the actual clause - but not legally enforceable So Wenger was trying to get Suarez on the cheap But my thought has always been, when that didn't work - why didn't Wenger make a higher offer at Liverpools valuation? Suarez wanted to come - so had Wenger slapped down 60-65m he could have signed him
One more that kills me is Xabi Alonso. It was apparently a difference between 3-5 million, but he would have made such a huge difference for those years.
Well not completely true - as money was spent on Ramsey and Arshavin in january It looks like Nasri was signed instead
I won't link to random tweets, but has anyone else been seeing these rumors claiming that Gazidis is considering a move to Inter Milan?
But that’s with hindsight. He’d just moved to juve for 10.5m had a bad season and then we payed 11m. It wasn’t like the market over reacted to his bad season. Juve made a small profit on him. I agree, but this is more like house flipping in a hot neighborhood than value investing equities. Wenger actively managed the asset and added the value himself. This was also part of his “edge” back then which he lost.
I think this has been argued to death. There was a few extra million there back then. Club made 22m or something after tax profit and there was cash in excess of debt service requirements.
Disagree - in this analogy house flipping in a hot neighbourhood is Beta - So like getting a 60m offer for Alexis Alpha is finding the hidden value in the asset - not related to market moves
So is that now an accepted fact, that the transfer market peaked 6-12 months ago? Having seen CR7's transfer fee to Juve, it did make me wonder. But generally I have been assuming that transfer fee inflation is still going on. Without something like the DJIA or SP500 for football, is there any scientific way to know this?
No but then I don't do twitter. However it would seem odd for Gazidis to leave, at least on his own volition, when he just finally got the control he's been coveting for the better part of 10 years. Unless, of course, he's attracted by a bigger paycheck or a bigger club, reputationally.
Auba is 29 and Laca 27 - so in the case of those two specific players value is going to decline It would have been cheaper to buy Lacazette 2 years earlier As far as inflation goes - it is hard to see what inflationary factors would be in play right now given the flat TV deal
OK, I guess I misread your earlier post. I thought you were saying that Wenger bought those 2 guys at the peak of the market, rather than the peak valuation for those 2 specific guys.
Don’t mean just buy and hold and wait for market to rise. I mean buying a distressed property and fixing it up—polishing it and adding the value using your particular skills/knowledge—more than just beta or alpha. Maybe it’s semantics, but I think we more or less agree. I still don’t have a clear understanding why AW left the French/subAfrican market though. Was it bc of ACN or homegrown? It was more than just other clubs inflated those markets.
Now picked up by Arseblog news..... https://news.arseblog.com/2018/07/arsenal-unaware-of-ivan-gazidis-ac-milan-link/ Seems unlikely. He'd be walking into a huge mess.
Agreed. Especially now that it's clarified as AC Milan rather than Inter. That's a huge difference, considering ACM's current state of affairs! p.s. Nice to see you contribute to these threads on a more regular basis Yos! Always good to have more cooler heads around this place.