The IPL and the stock market

While there will always be many ways to make money in the IPL - one of the long term solutions is investments. Not investments in shares but investments in players.

The way to make big money is to contract players cheap - make them successful, have them capture the public imagination and then sell them at much higher rates.

It makes for an interesting conundrum for any team then! You need to have established stars to get audiences riveted to your team, to ensure that you have fans and to ensure that you win matches. And yet these stars dont come cheap. So you need to get a mix of stars, good steady known players and then the unknown guys - young talented but with no pedigree to show that they can really shine. These are the ones you take your chances on.

Ofcourse as was shown in the case of Hyderabad last year - even buying the best players on paper can get you to bottom place. However the IPL mandates that you balance your portfolio well. For every Sachin and Sanath that you buy - you need a Nayar and a Rahane and equally you need the mix of Dhavals and Rajes. The Sachin and Sanaths will win matches alongside Nayars and Rahanes being the supports while the Dhavals and Rajes will come out of nowhere to make a name for themselves.

The Sachins and Sanaths are high short term returns - they win matches and are attractive to sponsors and hence get immediate money. They also sell the shirts. They would however also be the depreciating assets - resale value would be lower than the buying price for sure
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The Nayars and the Rahanes are possibly the known future stars - the ones that come inexpensive and can weigh in with their performances. The Dhavals and the Rajes are the ones who come at prices tending to zero - can make a name for themselves and get sold for astronomical prices. These are the logn term investments. High Risk if they dont fire as even one really bad over in a T20 can have the match lost - as to make these guys future stars and marketable - they have to be played in a fair smattering of matches.

So one has to be a strong scout and spot the ones with the talent and get them in - take your chances and play them even if it means one can lose the match. Because if you nurture and market that talent well - you have a big fat profit on your hands.

The strategy is also very useful when it comes to players on the brink of national selection - say for eg Shaun Marsh last year. If he were to be sold - there would be some buying to be done.

So the long term profits depend on who one picks to be the future star. They could perhaps pick a trick or two from The Rajasthan Royals. Buy low - sell high - they have it made!