What England's overrated football team teaches us about investing

I remember like it was yesterday.

Sitting at the lunch table in 2006 in Sussex, southeast England, where I finished school, talking with the hockey team about the upcoming FIFA World Cup in Germany.

“England can’t win,” I said. “The players aren’t good enough.”

The team laughed, and the captain shot back: “We’ve got the two best central midfielders in Europe in Gerrard and Lampard. The best winger in Beckham, and one of the best strikers in Rooney. We’ve got a real chance.”

Sure enough, three weeks later, England was eliminated by Portugal in the quarterfinals.

Twenty years later, it should be obvious to England in hindsight what was obvious to neutral observers at the time: England stood no real chance in the 2006 World Cup. Their players weren’t good enough.

Steven Gerrard and Frank Lampard were not a top-tier midfield duo in the way that Zidane and Makelele were for France, Figo and Deco were for Portugal or Totti and Pirlo were for Italy. Meanwhile, Wayne Rooney simply did not belong in the same conversation as Thierry Henry, Ronaldo Nazário, Ronaldinho, Hernán Crespo or Cristiano Ronaldo.

World Cup 2026: here we go again

Every major tournament, England is discussed as contenders. As the 2026 World Cup kicks off this Thursday, the familiar wave of hyperbole has returned. But a cold, hard look at the results paints a different picture.

The table below shows every World Cup knockout match England has won away from home since 1966. Away from home is what matters: home team advantage is so significant in football that it counts for two thirds of a goal, according to FT columnist Simon Kuper. 

Analysing this yields a few stark observations:

• England has never beaten a World Cup-winning team away from home.
• Out of these 8 knockout victories, 3 required the high-variance environments (i.e. where luck is more relevant) of extra time or penalty shootouts.
• Away from home, England’s probability of getting past the quarterfinals is closer to a 50/50-coin flip than that of a tournament favourite.
• There is no clear basis in the results for concluding England is a top-tier team. France, Germany, Brazil, Italy, Spain and Argentina all routinely beat World Cup winners away from home.

The Premier League illusion

When asked about the lack of past success, England’s defenders point to a lack of national coordination, the weakness of the Football Association (FA) and the absence of government-backed youth development frameworks like France and Germany. But they continue singing “three lions” anyway, citing the strength of the English Premier League (EPL).

The EPL is unquestionably the richest and most followed league in the world. But its elite clubs are essentially multinational corporations operating on English soil. Their capital, leadership, and labour are global. They’re not truly English. 

In any event, the idea that English clubs are richer and therefore English football is better is a non-sequitur. When competing head-to-head in the UEFA Champions League, the historical concentration of trophies remains heavily weighted outside of England. Paris Saint-Germain’s back-to-back crowns serve as the latest reminder that EPL riches do not guarantee continental dominance. Despite having much less money, the German and Dutch teams are much more successful than the English may care to admit.

 

The same pattern emerges in the UEFA Europa League (the tier directly below). England is not overrepresented at the podium. There is no statistical basis for concluding that EPL clubs are better. And the success of the EPL as a media property leans heavily on its global audience, derived from the advantages of the English language.

Three crucial lessons for investors

Trolling the English about their sporting failures is an established Australian pastime. Beyond the usual fun and games there are honest lessons for investors.

1. Understand what markets are pricing

Bookmakers currently place England as the fourth favourite for this World Cup, which punters misinterpret as a validation of team quality.

In reality, England’s odds reflect a cushy bracket. Due to a lucky group draw (Group L alongside Ghana, Panama, and an ageing Croatia) and seeding, England’s path to the semi-finals is much easier than that of a team like Germany, which faces a gauntlet of top-tier teams early in the knockout rounds.

The lesson for investors: when you look at what the market is pricing – the P/E ratio, dividend yield, etc – you need to know why things are the way they are. Is the company actually a superior operation, or is the market pricing in a temporary tailwind protecting it from volatility?

2. The dangers of groupthink

The English information system is much more insular than other countries, including Australia’s. This is entrenched by what Adam Curtis, the celebrated documentary filmmaker, calls “the Oxbridge caste that runs the BBC”. This insularity is amplified by modern algorithms and social media, where consumers self-select for confirming views.

A classic example occurred after Portugal eliminated England in 2006. The domestic ecosystem succumbed to a national outcry of scapegoating, alleging that Cristiano Ronaldo had manipulated the referee to have Wayne Rooney sent off. Ronaldo – who played for Manchester United at the time – was subjected to intense stadium booing for months.

In reality, replays showed Rooney had stamped Ricardo Carvalho; the referee acted on clear evidence, and Ronaldo’s subsequent winks were unrelated. A comforting delusion was preferred to a sober assessment of national failure.

The lesson for investors: if you don’t lend an ear to opinions that disagree with your own, reality will force itself upon you in ways far more painful. Opinions are hypothesis that should be tested against evidence.

3. Acknowledge the intelligence of your opponent

For geographical, historical and political reasons, England has underestimated the prowess of continental Europe for centuries.

Ironically, the foreign owners of EPL clubs understand it perfectly. Hence continental managers and technical directors run all the elite clubs.

The best EPL club in its best day – Manchester City in 2023 – was an entirely Spanish operation. Pep set strategy, Txiki built the squad, Ferran ran the money, and Rodri set the structure on-field. There were no Englishmen in any position of influence or responsibility.

The lesson for investors: every time you trade, someone is on the other side. They are selling what you are buying, or vice versa. You need to be humble and ask: “what do they know that I don't?” Tone down the self-righteousness; try to learn.

About ETF Shares

ETF Shares is a low-cost index ETF provider based at Macquarie University. We recently launched the ETFS Global Pure Play Copper Miners ETF (ASX: CPPR) which aims to capitalise on the growing global demand for copper.