Updated: Aug 11, 2020
Disclaimer: This is a speculative, hypothetical article - do not assume we're time travellers, please read for interest rather than intent. We see both sides of the Sancho Coin. Written 04/08/2020.
The King of the Index. A record breaking investment. England's brightest talent. There are many reasons to view Jadon Sancho as the rightful Number 1 investment on Football Index. At over £15, he's lapping up dividends and paying out to all the investors almost daily. For all those invested in Sancho, it's a glorious time to be on FI. For those looking to invest in Sancho, many would still say he has growing room yet and he's paying out daily - there are plenty of positives in his investment and we absolutely agree that he's rightfully the most expensive player on FI right now. No question.
However, for there to be good days, there must be bad. For those to win, some must lose. Although we believe Sancho could yet hit the £20 mark in the future, given his huge media payouts and promising future ahead, we're going to present the counter argument to his investment. Why wouldn't you onboard Sancho, or why would you sell up now?
Here are a few reasons why Sancho is one to take caution to right now on Football Index.
All investments need hype to rocket. Hype fuels the index. The bigger the hype, the more people take an interest or onboard for fear of missing out (FOMO). When more media is churned out, everyone's happy with dividends being paid out. In the last 24 hours, Sancho has risen another £0.35 - many traders are seeing his media dominance and want a piece of the action.
Unfortunately, hype doesn't last forever.
There's only so much 'speculation' on Sancho's future that can unfold before it's realised. There's a chance he signs next week, then the speculative tone changes. remember what happened to Timo Werner upon confirmation of signing. Price dip, media ran dry. Werner vs Sancho is a lukewarm comparison but the principle is the same - media attention is on his transfer, not his performance right now.
We'll address the reasons for his hype in the coming points, but remember that many traders have held since Sancho was £5 or cheaper. Those traders are sitting on a 200% investment - do you think they'll need an invite to cash out over 200% profit?
If he goes to United, will his hype be better than it is now?
2. Future Media
The best thing about Sancho right now is his media presence. He's a gift that keeps on giving, and is one of the best holds of the season purely for his media dividend payouts. The wiser trader will also understand moving to United means big bucks in media over the long term, given United dominate the media rankings. You can read about the United Bias here - but take our word for it, United are hands-down the best club to invest in for Media dividends.
The issue is, Sancho has dominated the media from his speculation, and not his performances in a United shirt. The recent media review outlines FI will be continually working to give performance-related media a heftier score to improve the media ranking system.
If Sancho makes his move to Old Trafford, you've got two routes of interest to a trader looking for media divs.
Option 1 - He plays as well as Bruno did upon arrival, which has arguably been the most impactful signing at Manchester United in the last decade. This could ensure Sancho holds a steady value or even rises above and beyond his predicted £15-20 mark once he's signed.
Option 2 - He doesn't find his feet so quickly. This could crash his price, like Pulisic or Daniel James dipped when they first stepped up to the Premier League Top 6 and couldn't make an impact. The difference being, those two players were not a fraction as hyped or invested in. With thousands of traders holding Sancho, a disappointing introduction could see a mass offload or listing. The initial snowball dip in price soon turns to an avalanche as traders look to cash in their profits before the value further worsens. To be clear, Sancho is a far more exciting investment than Pulisic or James, but the point is that he may not just walk into the Premier League and post impressive numbers.
Of course, both situations will cause media buzz, but he'll be competing alongside Rashford, Pogba, Bruno, Greenwood and Martial for those media points. There are a lot of stars at United, so don't be fooled into thinking he's a big fish in a small pond. He's in a shark tank. If he's not playing so well, the media is likely to be lower than we'd anticipate as Football Index are aiming to promote better media in relation to better performances. Therefore, if Greenwood or Rashford keep him out of the side, they'll be taking home the dividends as frequently as Sancho will be, or perhaps more.
If he goes to United, will his media be better than everyone else there, or will he just take a cut from the United Buzz and feature as regularly as the others? If Sancho is taking similar media to everyone else, the difference in price looks either vastly underpriced for Rashford and co, or vastly overpriced for Sancho. Either way, Sancho looks almost dead-certain to be a popular media winner for the coming season and beyond.
If he goes to United, will his media be better or worse than it is right now?
3. Performance Buzz
The 'potential' a player can reach is limitless, so of course Sancho could be the next GOAT. But on Football Index, the more established stars are actually cheaper. The youngsters hold future value, the established stars hold 'real value'. Both are profitable, but one is safer than the other.
Yes, the age bias factors in retirement/injury/non PB league moves in players such as Ronaldo and Messi. Those two are both media and PB dominants in Football Index but sit relatively cheap in the Top 200 compared to the likes of Sancho.
So what about other superstars that don't have a looming expiration date in their career? If Sancho is as good as Neymar, or De Bruyne, Trent Alexander-Arnold or Joshua Kimmich, then his value is £10 tops in today's terms on the market based off of Performance Buzz. The very best investments for PB dividends are still well under the value of Jadon Sancho. That raises some alarm bells should traders be investing thinking his performance is the main form of dividends - because it's not yet proven. Traders can only justify Jadon's current price by his media attraction. The graph below says it all.
Don't be fooled though. Sancho has made some incredible PB scores and has a great PB profile. Of course, moving to a new side will cause all sorts of changes in PB, but let's take a look at what his current PB profile.
That's a fantastic PB profile for a 20 year old Englishman. It deserves more than the £0.15 dividends he's won in PB, granted. But it's also in Bundesliga. It's in an entirely different team, different league, different system. United's wingers are not high PB scorers in comparison.
Greenwood and Rashford may be capable of scoring and assisting at an elite level, but between the two of them they've only made 5 200+ PB scores and 0 over 250.
Sancho coming in to that system may improve United, but it's still not clear if it will improve his PB or in fact reduce it.
If he goes to United, will his Performance Buzz be better than it is now?
4. Capital Appreciation
A tonne of traders insist that Sancho will be the first £20 player since the share-split. They have had good reason to think this way so far, and I'd agree with them should he hit the ground running at Old Trafford.
Whether Sancho hits the ground running is a monumental factor that will dictate the future share value of the 20 year old star.
The main holdback with Capital Appreciation is that you need new money to go into the market to onboard players, or old money to shift from different players to Sancho - which would further widen the gap between the king and the rest of the market. The higher the value, the fewer traders will be inclined to buy. For a new trader Sancho at £15 is incredibly intimidating; to only have a handful of shares in a player and spend £100 is not the easiest way to join the index, particularly when you can buy other United stars at half the price, or other premier league stars at a third of the price. The higher Sancho's price distances itself from all other players, the fewer new traders will invest and potentially fewer traders would top up, so he'll max out at some point if FI traders follows any logic at all.
If the price drops a fraction upon the confirmation of a signing, will traders top up or sell? Those holding 200% profits may just think it's time to cash out. And plenty of the traders who onboarded under £10 hold hundreds or thousands of shares each, rather than those holding shares purchased at £15+ who perhaps hold fewer each.
Essentially, this means the power is in those holding many shares at a profit right now. These traders can sell up and spark a small dip in market value, which in turn can lead to a crash. There are likely more shares in circulation that were distributed under £10 than over it, so those traders that have held patiently could pull the plug at a great profit and leave those holding above £10 a share high and dry.
5. International Football
It comes around every so often. There's good media coverage, and the opportunity to post decent PB scores. But it's not all that big on Football Index yet. Speculation as to whether Sancho will start for Southgate is ever-present but it's just not a major factor right now. Of course, come the Euros or World Cup, Sancho could be headline material but it's exceedingly difficult to factor that into his current price. So much can change between now and then, but it's worth keeping in mind a long term investment in Sancho could pay out a little in relation to international football and improve his reputation or legacy, which in turn would favour future investments.
However, if he was England's poster boy, it would give him the same media attention and legacy that Marcus Rashford, Raheem Sterling or Harry Kane are currently building. Is it enough to justify why Sancho is double the price of these players?
He's been outstanding. The combination of a generational talent on the pitch, well-timed big-money transfer and prolong speculation around Old Trafford has meant he's been one of the most lucrative investments in Football Index History. The move is still up in the air, and dividends are flowing right now - he could well hit £20 before he's in a United shirt if the deal is prolonged for many weeks.
Sancho has an outstanding PB profile, albeit playing for a different side and no history of big PB dividends yet. His main dividend source is media, for which you could probably guess the vast majority is related to signing for Manchester United. It's crystal clear as to how he got to this price point with the speculative signing, and with International Football next year, increased dividend structures and summer bonuses, he's an obvious choice to have in your portfolio. In the next three years he'll certainly pay out good dividends in media.
However, it's not clear what his PB would be like at United. It's not clear how much media he'd win once he signs. It's not clear how many traders that have held for a long period of time will cash out upon confirmation of signing. It's not even clear if he'll sign - which could lead to a prolonged media dominance and reward investors even further, but that's another story.
If I were a new trader, I'd lean towards holding off investing in Sancho at £15 rather than onboarding him.
There are so many risks, so many uncertainties and so much to lose. Don't mix up our words, Sancho is a fantastic hold. But is he worth double that of Rashford and co? If his media hype halves or he has to share the United Media amongst other big stars, he'll be winning far fewer dividends than right now. If he moves to United, his PB could worsen rather than improve.
Holding Sancho at around 100-200%, having earned all the dividends along the way, would be an ideal situation to be in. Many traders are in this position and some could well cashout and crash the value. They could even look to top up once Sancho settles in, perhaps at a much cheaper value in a few months. But if Sancho signs, then fails to make an immediate impact, there's a MASSIVE drop of around 50% to the next most similar investment - Marcus Rashford. Time will tell if Rashford and others rise, or if Sancho drops - but we're confident the gap will have to tighten between Sancho and his team mates next season.
Sancho could hit the ground running, continue to dominate media and rise to £20. If that's the case, perhaps many other PB and Media dividend winners too are undervalued - Sancho's vast lead to the next most expensive player is still concerning. Is he going to win that much more in dividends over the next 3 years than the others? Perhaps it's not that Sancho is over-valued right now, maybe it's just that other young, strong dividend winners are undervalued for the time being whilst Jadon's in the spotlight.
It's a gambling platform, there's a lot to win with Sancho right now. He's paying out almost every day. But those that fear a crash are yet to be proven wrong, and only time will tell. It may not end so well for some traders, or Sancho will prosper for the coming three years and every trader holding on FI will be a winner...