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Post by bluechip on Jul 24, 2018 10:27:32 GMT
Thanks for sharing this bluechip – I have seen adverts previously but never got around to checking it out. I have just looked at their website and I do not really get the business model (maybe I’m not supposed to, I dunno, although 3 mins reading t and c's is about my limit to be fair) Let’s say I buy 1 share in Harry Kane at £5. What happens to my £5 when I buy the share? Then I would receive possible dividends (if he plays well etc) and possible media payouts (if talked about) – where are these paid from/by whom? Finally, how do they arrive at a £5 valuation and how does that change. Is there some clear formula or is that at the whim of FI? If it goes up to £10, where is that £10 coming from when I sell. Similarly if it goes to £1, who pockets the £4? Seems like we are effectively gambling against FI directly – but then FI set the prices? Sounds like a really interesting idea so not being cynical just curious Dandy - I'll reply as it's quick, but I don't want to overkill the thread, I've already got one or two people disrespecting the time I have chosen to dedicate to this: You buy Harry Kane for £5, if you buy 100 his price will likely rise to £5.01 - I don't know the precise formula they use. Your £5 is sitting in FI's bank account I assume, if you choose to sell those shares instantly the price will be something like £4.90. So the platform keeps 10p for each share you acquired and it will take a 2% commission on top. So you will lose say 20p share in total. If you sell to market then somebody could buy those shares from you for £5.01 - so you just lose the 2%, so you walk away with £4.91 roughly. This stops people flipping expensive players and manipulating price. Most of the time you will hold the share for up to 3 years. As the platform is growing and more people will probably buy Kane that will mean his price rises during that growth, you will also possibly win dividends whilst you hold him as he is a media magnet and will often score lots of goals. I have a situation where I hold Ronaldo shares, he has lost value since I brought him, but he has earned me more in dividends than I have lost in his current valuation. These dividends are paid into your cash account by FI, they make money from all the trading that takes place. They updated in February saying £1million was traded in one day, the market has grown significantly since then, so I'd imagine it does that daily now - during big news/games it's scary seeing the buying/selling taking place 100 shares of Ronaldo £900, then people are instant selling for say £8.50 which means the platform make 50p +18p on each individual share sold. In short they must be making a fortune now they have over 150,000 users. I don't think they have a public formula for the share valuations, whenever I buy 100 of a player they generally rise by 1p in value, ditto on the sale. I think they tweeked their formula when they carried out a share split a while ago, if they hadn't done this Neymar would be trading at something like £50 per share they claim instead of £13, which even as it stands put it beyond most people to hold a meaningful amount of shares in him. FI will IPO a player at a certain price, as most known players are on the market now and there are only 5 leagues of importance there is a limit to how many worthwhile new players can be added. They added World Cup players so you had random Saudi Arabia players available for 20p a share and stuff like that, but it was pretty pointless to be fair. Most players worth holding will be in the top 200, or will be the higher end of their 'squad list' in price. There won't be too many unknowns worth putting a lot of money on now, unless you want to really gamble on a hidden gem (which people do). I often read of people buying thousands of a player for 40-50p then a few months later they are selling for £1+. I prefer the safer route myself as I don't watch enough football or care to gamble beyond what it is. You are gambling against other players, but because the market is growing there are no real losers at the moment. Once the market saturates (growth stops) it becomes a different beast and more of a stock market. FI do pay you dividends out of their profits, but only one attacker, midfielder, defender and a media magnet can win each day. So 4 players maximum (at the minute 3 because there is no football on). I can not for the life of me imagine the dividend payments would come to even 10% of what they make in commission each day. They just did a £100k sweepstake during the World Cup, signed up for a multi-million pound deal with SKY, without raising more capital from Seedrs (or anywhere else that I am aware of), so the platforms business model seems to be an exceptional one from an outside perspective. If people start leaving in droves then it would be a concern, but those leavers need to pay their commission to get out and it would be easy to spot a problem with the amount of money in the market. I'd just like to also say that the prices tend to reflect the likelihood of a player winning a dividend and the frequency they would likely win. You will get random cheap players win dividends as any player can score a last minute winner, but the law of averages works out here. The most expensive players will bring the most consistent dividends, cheap players are a punt but also potentially you can see large percentage growth in their worth overnight if they are linked with a top club for example, so there is something for everyone. Diversify your portfolio is my advice, don't put all your money into some youngster you think may make it big, and likewise don't put all your money into Neymar as one injury could see a sharp decline (not total) in value. Hope this helps.
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invester
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Post by invester on Jul 24, 2018 10:40:24 GMT
Just don't see where the skill is. Let's not forget that in the first year or so of Saving Stream nobody had any hassles.
What if you bought a few footballers and they ended up being injured long-term? It seems largely down to luck.
I'm not against gambling. So far this year I have actually made more in betting than P2P, this doesn't mean I'd recommend everyone to go out betting.
I see this a pseudo-skill. In the stock market there are certain metrics which can be used to give an opinion on price, for instance some trade under net asset values. There is no such equivalent for a footballer.
Do you have their accounts? (I assume they update people on Seedrs). I'd suspect they are loss-making in order to build traction. They offer generous affiliate incentives and a £500 risk-free period for new customers. Future viability once these taps are turned off seems a worry to me. From my perspective most of the blogs have very positive reviews, neglecting to mention many of the downsides because they will be compensated well if someone signs up. I also see positive comments on forums, but this is also akin to people talking up shares on ADVFN, more people getting involved benefits them, however small.
Elements of pyramid selling come to mind.
I think there is a good chance that this ends up being a fad. And there is the flip side, for someone to make a massive gain on a players share price, someone else has to lose. It also seems to me that there is also a significant chance of this being hit by regulation.
The spreads are harsh. A popular player, Willian is £2.40/£2.33, compare that to equities, where a similarly priced one, BT, trades at £2.250/£2.256.
It is a bit of fun while the customer base is growing, but if there is net outflow of funds/users I can't see how the aggregate price of the footballers will not also go down, because people have to sell in order to cash out, and less trading means less money for the company to pay the dividends with.
I kind of have a bit of a problem with this while the underlying health of the company is opaque.... given that more people here are more interested in making money than football, if you are interested in taking a punt, surely the recommendation should be to buy shares via the secondary market on Seedrs, which offers much better upside if the company does end up being successful. One potential exit route to me if it ever becomes mainstream would be a sale to Plus500, which would have a similar group of users.
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Post by Butch Cassidy on Jul 24, 2018 11:06:20 GMT
I think if you treat it as a bit of fun gambling & don't risk what you aren't prepared to lose, money could be made. Football is perennially popular (look how fantasy leagues have grown) twinned with the possibility of winning/growing your investment I think they will have a popular formula for a few more years - PROVIDING REGULATORS OR SIGNIFICANT COMPETITION doesn't curtail their concept. So I actually think the Seedrs equity might be a more profitable investment.
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Post by bluechip on Jul 24, 2018 13:59:55 GMT
Just don't see where the skill is. Let's not forget that in the first year or so of Saving Stream nobody had any hassles. What if you bought a few footballers and they ended up being injured long-term? It seems largely down to luck. I'm not against gambling. So far this year I have actually made more in betting than P2P, this doesn't mean I'd recommend everyone to go out betting. I see this a pseudo-skill. In the stock market there are certain metrics which can be used to give an opinion on price, for instance some trade under net asset values. There is no such equivalent for a footballer. Do you have their accounts? (I assume they update people on Seedrs). I'd suspect they are loss-making in order to build traction. They offer generous affiliate incentives and a £500 risk-free period for new customers. Future viability once these taps are turned off seems a worry to me. From my perspective most of the blogs have very positive reviews, neglecting to mention many of the downsides because they will be compensated well if someone signs up. I also see positive comments on forums, but this is also akin to people talking up shares on ADVFN, more people getting involved benefits them, however small. Elements of pyramid selling come to mind. I think there is a good chance that this ends up being a fad. And there is the flip side, for someone to make a massive gain on a players share price, someone else has to lose. It also seems to me that there is also a significant chance of this being hit by regulation. The spreads are harsh. A popular player, Willian is £2.40/£2.33, compare that to equities, where a similarly priced one, BT, trades at £2.250/£2.256. It is a bit of fun while the customer base is growing, but if there is net outflow of funds/users I can't see how the aggregate price of the footballers will not also go down, because people have to sell in order to cash out, and less trading means less money for the company to pay the dividends with. I kind of have a bit of a problem with this while the underlying health of the company is opaque.... given that more people here are more interested in making money than football, if you are interested in taking a punt, surely the recommendation should be to buy shares via the secondary market on Seedrs, which offers much better upside if the company does end up being successful. One potential exit route to me if it ever becomes mainstream would be a sale to Plus500, which would have a similar group of users. No I believe they are registered in Guernsey, most gambling companies have offshore registration so it is frustratingly opaque as you say. Skillset is only important once the growth stops, it looks like ratcheting up to me and during this period of growth you can learn what you need to in order to make an informed decision, all my opinion and don't take to the bank. I very much doubt they are loss making, as they have built the website, only costs would be nominal staff, dividends and fixed overheads (15% gaming tax I believe) - they are obviously investing in improvements, but that must be from revenue generated as investor would be notified if their shareholding value is reduced. When you look at how much is being traded, that 2%+ covers it in my book, but that is based on nothing but watching the transactions for minutes at a time and the details I have mentioned above regarding claims of trading figures etc. Spread is only really relevant if you instant sell, a facility to allow people with cold feed to run for any reason, costs more but better than most other outlets (what is the spread on a regular bookies if you want to cash out, or P2P, not possible with most - I'd love to take a 4% hit on some of my P2P bad uns?). If you sell to market it is just the commission to the platform you pay. 90% of my sales are to market rather than paying needless extra commission. If the tide turns then it's bad news of course, but as I have hopefully explained, the signs look good that this is something gaining traction not losing it. Ultimately you could join today and leave tomorrow, again not possible with most types of investments. I'd predict that as user numbers increase and more trades take place, they will increased dividends, they have done this previously. I'd love to know more about the financials myself in all honesty, but I'm trying to connect dots and some of the decision making seems to indicate to me that money is flowing in a lot faster than it is leaving. I invested via Seedrs first, dabbled for a few months, gradually increased my allocation. As I say it won't be for everyone, but it might just be a 12-18 month investment worth making at this time.
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Mike
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Post by Mike on Jul 24, 2018 15:59:33 GMT
What you don't seem to get is the following
Money goes in from punters who bet
Money goes out to the company, staff, overheads, dividend, etc
... Meaning....
Money left to return to punters = less than they put in
In other words, you shouldn't expect a positive return from a diversified betting slip. Is that news to the OP? Maybe those trustpilot reviews aren't fake after all...
This is the business model of betting, which you claim to have invested in through seedrs -- don't doubt that may end up profitable
The only way you can expect to make money from this is by having more information than the market, or random chance, or getting in early enough you can profit from VC-funded promos...
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Post by bluechip on Jul 24, 2018 16:18:45 GMT
Yes but you are jumping years into the future, it's like not investing in cars now because one day we will be teleporting everywhere! True but nothing to worry about for a good while yet.
I'm not advocating a 5-10 year investment as it is too early to tell how things will go, I'm saying a 6, 12, 18 month investment could yield massive results because the formula they are using is working with signs of numbers growing rapidly. Maybe some people don't like the idea of being involved in something that will evolve and carries risk, I get it - but most of you are investing in P2P so surely you understand basic risk/reward principles.
What you don't seem to grasp is that as new users are joining in their thousands they all want a home for their money, so it inflates the prices of those players already held - in a month or two numbers will increase dramatically I predict (no promises) on account of their expansion plans - buy me a beer with your profits or sit back and watch, I don't really care but I'm passing on my knowledge and experience!
Once the market stops growing, or the growth levels slow down, that is the time you need to start thinking about worse case scenario if you haven't learnt what you are doing by then - but you will because there is so much money to be made if you bother to look at the rules and listen to advice from the numerous forums/podcasts/blogs in the public domain. Even when it stops growing it evolves into a trading system, like a stock exchange - for every winner there is a loser at that point - but not initially, as I say if you look into it I challenge you to find one sob story from somebody who lost money after investing for a couple of months. If you get in and think it's not right then walk away, but I'm confident you won't.
Nothing wrong with being cautious, but thinking this is a simple betting/casino is plain wrong and I suggest you do some research. I did invest through Seedrs like several hundred people did. Google it and you will see lots about it!
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macq
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Post by macq on Jul 24, 2018 16:18:55 GMT
With no judgement but at the end of the day they are under the gambling commission so its gambling whether some P2P should also be is another question
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Post by bluechip on Jul 24, 2018 16:25:05 GMT
Also you are wrong about the only way to make money being an unfair advantage or luck. At this stage a diverse portfolio will grow in line with the platforms growth so you are correct there and that is the opportunity I am making you aware of.
We aren't on Dragons Den. We are here to make money.
Much later you will need to apply knowledge/learnings/experience to succeed - just like people who buy stocks do. I think that is a fair way off though and you are worrying about running before you can walk.
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Post by bluechip on Jul 24, 2018 16:27:20 GMT
Yes it's classed as gambling because the shares expire after 3 years. You can sell and buyback for 2% commission if you hold for that long.
Being classed as gambling is not bad.
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Mike
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Post by Mike on Jul 24, 2018 16:32:07 GMT
Also you are wrong about the only way to make money being an unfair advantage or luck. At this stage a diverse portfolio will grow in line with the platforms growth so you are correct there and that is the opportunity I am making you aware of. The trouble is that you think this is true. [*edit I presume you did not mean in the sense of a ponzi scheme, but perhaps you did in which case fair enough] How can it be? Imagine this: The platform grows, massively, in fact it triples in size before midnight tonight. Almost everyone sits on an huge paper gain, it looks like they have made a massive profit. Hurray! But can they all in reality? No. As soon as they try to turn their 'profit' into cash in their bank account, they need to sell their bets. Who will buy them? Indeed, from a ponzi perspective it works. "a diverse portfolio will grow in line with the platforms growth" so long as you are the very first person to cash out. How about if you are not the first? Overall, the betters or 'investors' as you insist, are at a loss. There is no magic money tree. Money goes in, some gets taken by the casino/website/platform, and what is left (less than what goes in) is available for withdrawal.
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Post by bluechip on Jul 24, 2018 16:42:21 GMT
I get what you are saying but you can say that about anything. What if we all decided to withdraw our money from the same bank tonight? What if we all decided to sell our houses tonight? What if we all decided to boycott eating McDonalds tonight?
Granted with a small business the risks are higher, but every business in the world has costs. They currently make their money from trades, if I ran the business I would be thinking about alternative revenue streams as well. If we all decided to sell our P2P investments, firstly we couldn't and secondly despite the hellish conditions there are always new people investing.
I also understand it from an ethics point of view, but for arguments sake let's say this business is currently at 10% market saturation, I'm not worrying about a run on the index for another 40%, I'm certainly not seeing anything that would indicate a potential loss of confidence on the horizon - it looks good after a couple of years investing for me. The chances of a mass systematic withdrawal killing the platform are slim to nothing unless there is something out of the ordinary that occurs, there are zero signs that this could/would happen other than the fact it could happen. Anything can happen, but I'm confident enough to put my money into it for the returns I have made, they are growing by the day. Confidence in banks, housing sector and McDonalds not so much and nobody is worried about investing or storing money/shares in those.
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Mike
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Post by Mike on Jul 24, 2018 16:46:49 GMT
I get what you are saying but you can say that about anything. No, the sameisn't true about everything. You seem to enjoy what I view to be an idiotic comparison with p2p; so we can stick with that: Money in: We lend to the borrower More money in: The borrower pays various fees & interest Money out: Platform overheads/profit ..Meaning.. Money left: Can be more than investors put in! no need for investors to loose overall (like your example requires)! Money goes in, some gets taken by the casino/website/platform, and what is left (less than what goes in) is available for withdrawal. Overall the 'investors' need to loose in order for the casino to operate, because they are its sole (in general) source of revenue
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macq
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Post by macq on Jul 24, 2018 16:52:00 GMT
Yes it's classed as gambling because the shares expire after 3 years. You can sell and buyback for 2% commission if you hold for that long. Being classed as gambling is not bad. true that's why i said no judgement and to be fair i bet most weeks and a long time back used to be at the Stow for the dogs most weeks.I was just pointing it out to people who are trying to compere to investing
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Post by bluechip on Jul 24, 2018 17:08:01 GMT
P2P borrowers often do not pay back what they owe, there are hundreds of examples. I have lost thousands. P2P platforms collapse, I have seen two and I imagine many more will follow and have gone before. Many are living on lies and obfuscation.
This business model for FI is safer than P2P as a platform/business model in my opinion, the market moves prices, they take their cut from each transaction - things start going bad they can adapt, change what they pay out for a short period, run a special offer, they have much more flexibility than cash burner P2P platforms. Yes prices can go down and you can lose a bit if you cash out or are unlucky, but you can also earn more if you are patient, informed and a lot more if you are lucky. Fundamentally the only way you can lose everything is if the platform collapses, it seems to be going from strength to strength so I'm not worried about it. The only way you currently lose money if you are buying shares is if you are reckless or stupid, most people on here won't be. If you have a diverse portfolio then you will make money if the platform grows - you must be familiar with this concept it's all I read on P2P platforms, diversify, diversify, diversify. If you have knowledge about football, or decide to do some due diligence (like P2P investors should be familiar with) then you can make more money. It's like manual investing compared to blackbox investing, (Assetz style). You currently win either way, but the more you put in the chances are the more you will earn if the fundamental business is sound - which it all seems to be.
It's pretty simple. Yes there are costs and the net sum going out to investors over the entire lifespan of the business will be less than what comes in because of those costs if they don't add new avenues of growth, but that is a long long way away if the signs are being read correctly. They can add new revenue streams, they can expand internationally, they don't need to rely on new businesses needing to borrow, they can just add players as and when they want to. They are talking with Chinese companies and American companies about licensing their IP for different sectors (American Football, Celebrities etc), which will be revenue coming in with nothing going out. I don't work for them or sit on the board, but it doesn't take a rocket scientist to realise that the avenues to grow and expand from a simple 'market-maker' role they have at the moment are vast. if you did a tiny bit of research you would see that these areas are something they are looking into, which again could mean that the whole point of investors losing is potential moot.
I'm done trying to convince you that this is a good opportunity. I think it's wise to be cautious. You can call it a Pyramid, Ponzi, Scam whatever if it makes you feel better and yes I'm sure if you cherry pick certain aspects of the business you can convince yourself of anything, all I know is that it works and has done for 3 years, everything seems above board, thousands of people are enjoying it and benefiting from it, I understand the way they make money and I have put my money where my mouth is - people coming late will earn less than those in early, why shouldn't they. I earned more from P2P than people will coming into it now and that is fair, Mircrosoft investors earned more from their investment in the 80's than investing in it now. Way of the world.
This has taken up enough of my time now, I hope some of you have benefited from my insight, bye.
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invester
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Post by invester on Jul 24, 2018 18:42:10 GMT
How much did you pay for a share on Seedrs in the initial round? I am thinking of going in the Secondary market in August.
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