The following is a post by Pauline. Enjoy!Â
My grandpa always told me that it takes just two opinions to make a market. The simplicity of his words made what would become a life long challenge seem very simple at the time. All I had to do was form smart opinions. Simple, right?
Of course, at the time I could not know the psychological challenges that lied ahead. Nor could I account for the role played by discipline or luck, or indeed the costs of expressing my opinions at a frequency that would filter out the latter (or lack of), and scale the former.
Such ignorance could not be more prevalent in the world of football, where the financials involved are only outdone by the emotional tidal wave that follows them. Wenger, Ferguson, Levy… These are the traders on the touchline, where liquidity comes only a twice a year, and where the assets themselves depreciate by the day.
So with a tip of the hat, I give you the top 5 trades in football:
- Gareth Bale (Tottenham Hotspur to Real Madrid): Estimated £80m return.Originally bought for £7 million as a left back from Southampton, Bales game transformed into a more attacking style while at Spurs. He caught the eye of European football during the UEFA Championships and was eventually transferred for an undisclosed fee (rumours: £77m – £85m).
- Christiano Ronaldo (Manchester United to Real Madrid): Estimated £70m return.
Sir Alex signed Cristiano from Sporting CP for £12m, his impact on United was almost immediate.
Together with Bale, Ronaldo has helped give the Premier League the largest war chest in Europe.
- Kaka (AC Milan to Real Madrid): Estimated £51m return.
Kaka joined Milan for an £8.5m fee later to join Real Madrid for €65 Million! The attacking midfielder spends the twilight of his career as an attacking midfielder for Orlando City.
- Zinedine Zidane (Juventus to Real Madrid): Estimated £43m return.
Zidane’s transfer from Juventus was a world record setting fee €75 millions. Stomach churning to think Marseille let him leave for Turn for just £3 million.
- Edison Cavani (Napoli to PSG): Estimated £40m return.
PSG’s new spending power puts Cavani fifth on the list, joining the Parisians from Napoli for £54 million.
A final note: Yield.
Of course, it wouldn’t be fair on Real Madrid, the buying party in 80% of these top trades, if we didn’t at least acknowledge the earnings yield of these assets. That couldn’t be more true for Christiano Ronaldo, but with number one the list, that remains to be seen 🙂
