Is Messi still a good investment on Football Index?

Updated: Jul 25, 2020

A question that is puzzled upon regularly amongst the Football Index Trading Community – Is Messi too old to invest in? The 33 year old demi-god has now contributed a record number of assists in La Liga, whilst racking up an equally impressive goal tally.

The veteran is a true king of Performance Buzz (PB) on the index. No player has been close to his dividend earnings, regardless of age. He’s earned over double that of Neymar, Ronaldo and Lewandowski in the 19/20 season.

Lionel Messi, PB King on Football Index

There are no players similar to Messi in the world. We can’t truly compare how good he is to any other professional player, let alone a player of equal stature on Football Index. However, on the basis of the goal involvements tally vs age, we’ve highlighted Jadon Sancho purely as a reference point.

Note - we know Sancho is English, he plays in a different league, transfer speculation etc. We know Sancho is 13 years younger and has the ‘potential’ factor AKA Wonderkid Bias. But for the argument of PB dividends vs Media vs Age, we want to highlight just how strong Messi is right now.

Messi vs Sancho Statistical Comparison

The table above demonstrates three simple conclusions:

1. Messi has won more dividends than Sancho this season.

2. Sancho has won significantly more MB than PB, in a season surrounded by transfer speculation.

3. Despite putting up incredible goal contributions, Sancho has just 1/7 of the PB dividends that Messi has earned this season.

These three takeaways form the basis of any rational argument – Messi is better than Sancho for PB. That’s a no brainer really. But when you put it in terms of Football Index investments, the concept of share value really tugs on the mind. Messi is 33 years old. Sancho is 20. Messi is more likely to worsen, Sancho is more likely to improve. Messi could retire in three years, Sancho could fill the role as one of the world’s best. This is what makes the debate so intricate. This is what spreads fear in investing in Messi now. There’s a very real chance that in the next 3 years, if he retires, suffers injury or leaves Barcelona and you don’t cash out between now and then, your £5.12 in share value is worth an agonising 0.

So how can we tackle fear, and invest using data rather than emotion? When you dive a little further into the stats above, you’ll realise two crucial factors that may sway your decision on Messi.

1. Messi’s league assists this term are the highest of his career. Back in 2014/15 he also made 20, but that was across a full 38 games. He’s not slowing down yet. Age is not hindering his performance output, despite injury keeping him side-lined.

2. Messi has paid back 42% of his £4.82 share value from 12 months ago in dividends.

Although capital appreciation is no longer a significant factor in investing in Messi, for those that onboarded last summer, they’ve recouped half of their investment already in cash dividends. Of course, Sancho has rocketed onto the throne and would repay investors today nearly 200% of their investment, but that’s not what this article is here to discuss.

So the bigger issue at play is capital depreciation. What if he retired in three years and you sold for a significantly lower value than the buy price, or even bottomed out to 0?

If you believe Messi has a full three years left in him, and are willing to ride the injury/retirement/abandon Barca risks, then you’re part of a small number of traders who are readily investing in Messi today. So if your beliefs were spot on, and he could repeat this season again for three more years, how much would you make or lose?

Let’s skim over play time and average output. With 4 League games left to play in La Liga, plus a ‘guess’ that Barca will play 3 more UCL matches, that’s 7 fixtures remaining. Then 3 seasons squeezed in before your bet expires.

Estimating Bronze, Silver, Gold matchdays and their respective PB scores for the remainder of the season is incredibly difficult to accurately model, let alone predicting the following three years. It’s simply beyond feasible, and frankly too time-consuming given that one bad tackle could scrap the entire estimation. But we can take a rudimentary average from his output so far this season, £1.05 PB dividends and £0.99 MB in 35 games, to give a very generic yet highly respectable estimation of what Messi could yield.

£2.04 earned in dividends across 35 PB eligible games averages 5.8p per match; 3p in PB, 2.8p in Media. It’s a staggering statistic. But numbers can’t be argued with. This is arguably the greatest player of all time. One outlier between this season and the coming ones is presumably the intermission – hence the increased media dividend earnings.

If you acquired 100 shares in Messi now, you could probably snatch some up using the Matching Engine (ME) for £5 each quite comfortably. That’s £500 invested. You’re assuming the same output, no injury, Champions League football every season, and a rate of 80% starts just like this season. What does it return? 38 League matches, 11 UCL. Let’s round to 40 PB eligible games per season (80% of 50).

Lionel Messi's expected Dividend Return if he repeated this season for three more years.

*It’s important to highlight that media dividends have been an unusual phenomenon this season due for obvious reasons regarding the intermission. Nonetheless, Messi could still reap some dividends before the season closes, particularly with Champions League on the cards.

To confirm, that’s £7.37 in dividends over three years. And to remind you, that’s assuming each three seasons are as good as his current in terms of dividend return. That’d mean your £500 investment would return up to £737; a profit of £237 even if Messi summed to 0 in share value after your 3 year investment.

That’s a very big ask on Lionel though.

We’ve produced a table to show what’d happen if he repeated his form for one more year, before halving his dividend return consecutively for the final 2 years of investment. This is to represent a slightly more realistic expectation – though we’re trying not to undermine him.

Lionel Messi's expected Dividend Return with halving output each year.

This would return £4.47. A loss of £0.53 per share. This is presumably what most traders would consider the realistic risk. Messi’s output decreases up to retirement, and the share value is not recouped in dividends before the 3 year investment expires.

However, we must address the truly gigantic elephant in the room. This week, Football Index is increasing their PB Dividend structure, meaning each matchday there will be greater Performance Buzz dividends to be won. If this is the case, no player will benefit greater from such an increase. Even if the PB dividend increase is just 10%, that would take the expected £0.53 loss as mentioned above into just a £0.06 loss, again assuming you’d hold for all three years and never sell the shares.

It’s a mind boggling amount of data to work with, and a huge degree of speculation and assumption as to where Messi will be in three years’ time. But the take-home message is that if you believe there are three years left in Messi, even with a decreasing PB output in a couple of years’ time, he could still almost breakeven through dividends - even if you were not able to sell for shares for a penny in summer 2023.

For many traders though, the risk factor is just too great.

Any significant injury would end his career as we know it, whilst fitness and 'changing of the guard' (rotating youngsters in, transitioning veterans out) is also a vital factor to consider. As a result, many believe his minutes will decrease, and his dividends will more than halve in the coming two seasons. All of these risk factors are just too great for the majority of traders to consider balancing the dividend return against the capital depreciation of Lionel Messi.

However, for those daredevils backing a PB dividend increase of 50% or more on Thursday, when FI announce the new dividend structure, they could be laughing before the end of next season. Messi will no doubt be the greatest benefactor in this department.

If you were ever going to give Messi one last hoorah on Football Index, now would be the time to invest.

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Football Index Gurus | United Kingdom