My 'World Cup guide' to wise investments
PUBLISHED: 00:01 11 June 2018 | UPDATED: 00:01 11 June 2018
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If you're searching for a winner, on the football pitch or the stock market, invest in blue-chip stock. You really cannot go too far wrong, reckons Peter Sharkey
Are you already bored silly and despise the faux dramatic voiceovers accompanying the musical intros on both BBC and ITV?
I’m talking, of course, about the World Cup, which gets under way on Thursday with the truly riveting prospect of hosts Russia taking on Saudi Arabia. Bet you can’t wait – for both the game and another of those expensive, utterly pointless opening ceremonies.
As for the pundits, haven’t we had enough of former footballers attempting to describe the action viewers have witnessed a few seconds earlier on TV? “Well Brian, the boy gets the ball on the right and swings in a cross and really, the sennerforwar’ should be burying it.” Yes, we know; we’ve been watching the broadcast too.
In truth, such facile, grammatically-challenged ‘commentary’ has been a feature of live matches for decades; perhaps Russia 2018 will mark the end of the pundit, a positive development which very few football fans would oppose.
The globe’s greatest sporting tournament has only just begun to excite billions of followers. I suspect that, until now, fans’ collective lethargy was explained by the fact that a) there are too many teams taking part and b) too few of them are of sufficient quality.
This happens every four years, of course. Irrespective of where it’s staged, a week or so before the tournament kicks off, the sense of excitement builds each time a World Cup special handbook falls from your weekend newspaper (as several did on Saturday and Sunday), or one of those ‘set the scene’ pieces appears, describing memorable contests from years past.
Then there’s the advertising, the impact of which can be, ahem, a tad negative.
Delayed at Euston station in London recently, I mistakenly sat directly opposite a gigantic video advertisement featuring ex-cricketer ‘Freddie’ Flintoff. The ad offered £100million to anyone who could correctly predict the outcome of every single World Cup match, even though the opponents in half of the games were unknown.
“Your cash is safe,” I mused as Freddie turned and looked suitably perplexed, as you would with a giant ‘O’ around your head, the letter forming part of the word ‘million’, but only when Freddie lined it up properly. The former England man’s face was, I felt, representative of how many thousands flitting across Euston’s busy concourse felt about both the tournament and the tenuously-related product he was advertising.
There was a time when I loved all the pre-tournament build-up: the mascots, the ridiculous kits, the one-paced friendlies.
But the World Cup has become a bloated version of its former self. There’s too much hype, too many teams and too few prospective winners.
In many respects, the same could be said about the investment universe. As is the case with some countries participating in Russia, there are far too many mediocre investment products that require all the promotion they can get, ostensibly because they’re not particularly good.
Once in a while they’re capable of causing a shock and getting an unexpected result, often when playing England (but never against Germany or Spain). It’s the investment equivalent of a tiny company edging out a market behemoth to win a sought-after contract which then causes its share price to rise, albeit temporarily.
Such outcomes are rare – in football and on the stock market – because if, on the eve of the tournament, we were to divide the World Cup’s runners and riders, they would fall quite naturally into a series of groups to which we could apply traditional investment labels.
Brazil, Germany, Spain and France are our blue-chip quartet, the first two in particular ‘always there or thereabouts’. And why is this? Four well-coached squads laden with quality performers and a national league in which the vast majority of players are qualified to play for the national team.
Then there’s the batch of FTSE250 countries capable, on occasion, of making it to the top table: Argentina, Belgium, Uruguay, Portugal, Denmark and, recently elevated from AIM, England.
The junior market houses: Croatia, Colombia, Russia, Poland, Mexico and Sweden. Beyond this half dozen, the landscape becomes blurred. Unknown quantities such as Saudi Arabia, Panama, Morocco and Tunisia could cause an upset and it would be good to see Iran, Iceland and Mo Salah’s Egypt doing well.
Ultimately, however, if you’re searching for a winner, on the football pitch or the stock market, invest in quality, blue-chip stock. You really cannot go too far wrong.
World Cup stats to dazzle your friends
Number of goals scored at last World Cup in Brazil, the highest number since France 1998 (when 64 matches were played). On a pro-rata basis, the highest-scoring tournament (26 matches) was Switzerland in 1954, when 140 goals were scored, an incredible average of 5.4 per game.
The highest-ever average tournament attendance was in 1994 when the World Cup was staged in the USA and almost 70,000 fans attended every match. An average of 52,918 attended each match in Brazil four years ago, the second-highest in the tournament’s history.
The number of defeats suffered by Mexico in the World Cup finals, more than any other nation. The Mexicans have, however, also won 14 and drawn 14.
The World Cup’s total ‘in-home’ audience during Brazil 2014 was a staggering 3.2billion. On average, 186.7million watched every game; the final attracted an audience in excess of one billion.
In January last year, FIFA, known worldwide as a paragon of propriety, announced that from 2026 the number of nations playing in the tournament’s final stages would rise from 32 to 48…
…And the reason the tournament will become even more bloated is cash. FIFA estimate that total tournament revenues will reach $6.2billion in eight years’ time. Net profits are expected to hit $4billion.
Peter Sharkey read economics at the University of Bristol. He worked as an accountant on three continents and has been a company director and investor for more than 30 years, building and selling three different companies.