Cristiano Ronaldo’s Farewell Could Take Him From the World Cup to Obscurity
The 37-year-old Portuguese star was hoping for a move to a major European club this winter. Instead, he may settle for riches—and irrelevance—in Saudi Arabia.
The 37-year-old Portuguese star was hoping for a move to a major European club this winter. Instead, he may settle for riches—and irrelevance—in Saudi Arabia.
LUSAIL, Qatar—Cristiano Ronaldo has made the point, over and over, that he isn’t done with top-level soccer. But the reality emerging at this World Cup is that top-level soccer may be done with him.
Ronaldo, technically the most famous unemployed person currently in Qatar, was let go by Manchester United last month and cuts an increasingly peripheral figure for the Portuguese national team. On Tuesday, he was benched for the team’s 6-1 win over Switzerland in the round of 16, the first time he didn’t start a major-tournament match for his country since 2008.
This tournament no longer seems like just the final World Cup of a glittering career. It could mark Ronaldo’s de facto exit from the global stage altogether.
The most alarming part for him on Tuesday was that Portugal looked substantially better and more fluid without him. His replacement, the 21-year-old striker Gonçalo Ramos, scored a hat trick, overtaking Ronaldo’s tally for the tournament in the space of an hour. And still, fans inside Lusail Iconic Stadium chanted Ronaldo’s name, urging the manager to send him on.
When Ronaldo finally entered the game, met with the biggest roar of the night in the 73rd minute, it was in an unfamiliar new role for Portugal: luxury substitute. The closest he came to scoring was a late strike that ended up in the net, only to be ruled out for offside.
Now, even after the World Cup, his prospects for relevance are dimming.
Though Ronaldo desperately wants to continue playing, the list of places willing to pay him to do that is currently the shortest it’s ever been. As he took his place on the bench against Switzerland, he was mulling a contract offer not from a top team in Spain or Italy or even Major League Soccer, but from the Saudi Arabian club Al Nassr.
Unless another suitor emerges, just three months after a summer transfer window in which Ronaldo and his agent Jorge Mendes were unable to find a landing spot at a major club, Al Nassr appears to be in the lead for his signature. The switch would reportedly make Ronaldo the highest paid athlete in the world. It would also erase him from the top level of the game.
“What the press keep saying, the garbage, is that nobody wants me, which is completely wrong,” Ronaldo said in an explosive interview on British television on the eve of the tournament. “They continue to repeat that nobody wants Cristiano. How they don’t want a player who scored 32 goals last year, [including] with the national team?”
Somebody does want Cristiano. They just happen to play in a league few people pay any attention outside the Gulf—and Cristiano isn’t used to being ignored.
The only human with more than 500 million Instagram followers, he has spent two decades building himself into one of the most recognisable athletes ever to compete. But even his global appeal and immense marketing power no longer seem enough for major European clubs to justify the salary and special treatment demanded by a wilting 37-year-old. By the end of Ronaldo’s time in Manchester, United coach Erik ten Hag saw him only as a late-game option off the bench.
“The coach didn’t have respect for me,” Ronaldo said in the TV interview. “If you don’t have respect for me, I’m never going to have respect for you.”
In Saudi soccer, money and adulation were never going to be a problem. Al Nassr isn’t bound by the financial structures of European teams. The club’s longtime president was a grandson of the Kingdom’s founder, Ibn Saud. And the league, where foreign players are mostly unheralded journeymen, is prepared to roll out the red carpet for Ronaldo as if he were a visiting head of state.
The problem for Ronaldo is that Saudi soccer is basically invisible outside of the Gulf. While Manchester United might be the most famous team in any sport in the world, matches in Ronaldo’s potential new home garner no global attention. Plenty of superstars have made late-career stops in leagues outside the European heartland on their way to retirement, but the MLS and Japan’s J-League still generate more highlights than any soccer ever played in the Kingdom.
“I’ve worked in a lot of countries and everywhere you go, you see that in the youth, the quality is the same—in Holland, in Spain,” said Marco Koorman, a Dutch coach who works as a technical director in Saudi Arabia. “But the older they get, you see the level go down—especially in Saudi.”
Meanwhile, in Qatar, Ronaldo is less the inspirational leader of the Portuguese team, and more like a passenger. He scored once here against Ghana and then tried to claim another goal against Serbia, only for replays to show that the ball didn’t actually graze his hair. It was telling that when Portugal coach Fernando Santos fielded a second-choice lineup for the team’s final group-stage match and Ronaldo wasn’t one of the key players he rested.
He was, however, substituted. When Santos decided to remove him after 65 minutes, the Portuguese captain looked visibly frustrated, and then got into a spat with South Korea defender Cho Gue-Sung as he left the field. Cho told Ronaldo to get a move on. Ronaldo told Cho to be quiet.
Santos took a dim view of Ronaldo’s annoyance about being taken out of the game.
“I didn’t like it,” he said on Monday. “I really didn’t like it. But from that moment onwards everything is finished regarding that issue. These matters are resolved behind closed doors. It’s resolved.”
The bizarre sequence of events that put Ronaldo at odds with his own national team and on the road to soccer obscurity began with the best of intentions. When he moved to Manchester United from Juventus last year, it was billed as an emotional homecoming. The club that had first propelled him to superstardom during an unstoppable spell from 2003 to 2009 was bringing him back for a Michael Jordan-style last dance—one more shot at glory before calling it a career.
Instead, it wound up looking more like Jordan’s forgettable spell on the Washington Wizards.
Though Ronaldo was United’s top scorer last season, he was clearly diminished. The turn of pace was gone. He no longer marauded through defences the way United fans remembered. Even his touch was beginning to let him down.
This wasn’t the Ronaldo he wanted people to remember. Perhaps no player in soccer history has been as acutely aware of his own legacy during his own career. This is a man who built a museum in his hometown on Madeira to memorialise his accomplishments, and then built a new one because he decided the first wasn’t big enough. Even seemingly arcane records are deeply important to Ronaldo.
But he’s also aware of his own worth. And that is at the heart the dilemma facing Ronaldo as he maps out the coda to his career: Will he choose a club befitting his status as one of the best players in history—if he can find one—or will he pick a club matching his status as one of the best-paid athletes in history?
“Let’s be honest, [in] the last years, football changed,” Ronaldo said in the British TV interview. “I see football now as a business to be honest.”
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Equities are often seen as expensive after promising start to 2023
A new trading year kicked off just weeks ago. Already it bears little resemblance to the carnage of 2022.
After languishing throughout last year, growth stocks have zoomed higher. Tesla Inc. and Nvidia Corp., for example, have jumped more than 30%. The outlook for bonds is brightening after a historic rout. Even bitcoin has rallied, despite ongoing effects from the collapse of the crypto exchange FTX.
The rebound has been driven by renewed optimism about the global economic outlook. Investors have embraced signs that inflation has peaked in the U.S. and abroad. Many are hoping that next week the Federal Reserve will slow its pace of interest-rate increases yet again. China’s lifting of Covid-19 restrictions pleasantly surprised many traders who have welcomed the move as a sign that more growth is ahead.
Still, risks loom large. Many investors aren’t convinced that the rebound is sustainable. Some are worried about stretched stock valuations, or whether corporate earnings will face more pain down the road. Others are fretting that markets aren’t fully pricing in the possibility of a recession, or what might happen if the Fed continues to fight inflation longer than currently anticipated.
We asked five investors to share how they are positioning for that uncertainty and where they think markets could be headed next. Here is what they said:
Cliff Asness, founder of AQR Capital Management, acknowledges that he wasn’t expecting the run in speculative stocks and digital currencies that has swept markets to kick off 2023.
Bitcoin prices have jumped around 40%. Some of the stocks that are the most heavily bet against on Wall Street are sitting on double-digit gains. Carvana Co. has soared nearly 64%, while MicroStrategy Inc. has surged more than 80%. Cathie Wood‘s ARK Innovation ETF has gained about 29%.
If the past few years have taught Mr. Asness anything, it is to be prepared for such run-ups to last much longer than expected. His lesson from the euphoria regarding risky trades in 2020 and 2021? Don’t count out the chance that the frenzy will return again, he said.
“It could be that there are still these crazy animal spirits out there,” Mr. Asness said.
Still, he said that hasn’t changed his conviction that cheaper stocks in the market, known as value stocks, are bound to keep soaring past their peers. There might be short spurts of outperformance for more-expensive slices of the market, as seen in January. But over the long term, he is sticking to his bet that value stocks will beat growth stocks. He is expecting a volatile, but profitable, stretch for the trade.
“I love the value trade,” Mr. Asness said. “We sing about it to our clients.”
For Richard Benson, co-chief investment officer of Millennium Global Investments Ltd., no single trade was more important last year than the blistering rise of the U.S. dollar.
Once a relatively placid area of markets following the 2008 financial crisis, currencies have found renewed focus from Wall Street and Main Street. Last year the dollar’s unrelenting rise dented multinational companies’ profits, exacerbated inflation for countries that import American goods and repeatedly surprised some traders who believed the greenback couldn’t keep rallying so fast.
The factors that spurred the dollar’s rise are now contributing to its fall. Ebbing inflation and expectations of slower interest-rate increases from the Fed have sent the dollar down 1.7% this year, as measured by the WSJ Dollar Index.
Mr. Benson is betting more pain for the dollar is ahead and sees the greenback weakening between 3% and 5% over the next three to six months.
“When the biggest central bank in the world is on the move, look at everything through their lens and don’t get distracted,” said Mr. Benson of the London-based currency fund manager, regarding the Fed.
This year Mr. Benson expects the dollar’s fall to ripple similarly far and wide across global economies and markets.
“I don’t see many people complaining about a weaker dollar” over the next few months, he said. “If the dollar is falling, that economic setup should also mean that tech stocks should do quite well.”
Mr. Benson said he expects the dollar’s fall to brighten the outlook for some emerging- market assets, and he is betting on China’s offshore yuan as the country’s economy reopens. He sees the euro strengthening versus the dollar if the eurozone’s economy continues to fare better than expected.
Even after the S&P 500 fell 15% from its record high reached in January 2022, U.S. stocks still look expensive, said Rupal Bhansali, chief investment officer of Ariel Investments, who oversees $6.7 billion in assets.
Of course, the market doesn’t appear as frothy as it did for much of 2020 and 2021, but she said she expects a steeper correction in prices ahead.
The broad stock-market gauge recently traded at 17.9 times its projected earnings over the next 12 months, according to FactSet. That is below the high of around 24 hit in late 2020, but above the historical average over the past 20 years of 15.7, FactSet data show.
“The old habit was buy the dip,” Ms. Bhansali said. “The new habit should be sell the rip.”
One reason Ms. Bhansali said the selloff might not be over yet? The market is still underestimating the Fed.
Investors repeatedly mispriced how fast the Fed would move in 2022, wrongly expecting the central bank to ease up on its rate increases. They were caught off guard by Fed Chair Jerome Powell‘s aggressive messages on interest rates. It stoked steep selloffs in the stock market, leading to the most turbulent year since the 2008 financial crisis. Now investors are making the same mistake again, Ms. Bhansali said.
Current stock valuations don’t reflect the big shift coming in central-bank policy, which she thinks will have to be more aggressive than many expect. Though broader measures of inflation have been falling, some slices, such as services inflation, have proved stickier. Ms. Bhansali is positioning for such areas as healthcare, which she thinks would be more insulated from a recession than the rest of the market, to outperform.
“The Fed is determined to win the war since they lost the battle,” Ms. Bhansali said.
Gone are the days when tumbling bond yields left investors with few alternatives to stocks. Finally, bonds are back, according to Niall O’Sullivan of Neuberger Berman, an investment manager overseeing about $427 billion in client assets at the end of 2022.
After a turbulent year for the fixed-income market in 2022, bonds have kicked off the new year on a more promising note. The Bloomberg U.S. Aggregate Bond Index—composed largely of U.S. Treasurys, highly rated corporate bonds and mortgage-backed securities—climbed 3% so far this year on a total return basis through Thursday’s close. That is the index’s best start to a year since it began in 1989, according to Dow Jones Market Data.
Mr. O’Sullivan, the chief investment officer of multi asset strategies for Europe, the Middle East and Africa at Neuberger Berman, said the single biggest conversation he is currently having with clients is how to increase fixed-income exposure.
“Strategically, the facts have changed. When you look at fixed income as an asset class…they’re now all providing yield, and possibly even more importantly, actual cash coupons of a meaningful size,” he said. “That is a very different world to the one we’ve been in for quite a long time.”
Mr. O’Sullivan said it is important to reconsider how much of an advantage stocks now hold over bonds, given what he believes are looming risks for the stock market. He predicts that inflation will be harder to wrangle than investors currently anticipate and that the Fed will hold its peak interest rate steady for longer than is currently expected. Even more worrying, he said, it will be harder for companies to continue passing on price increases to consumers, which means earnings could see bigger hits in the future.
“That is why we are wary on the equity side,” he said.
Among the products that Mr. O’Sullivan said he favours in the fixed-income space are higher-quality and shorter-term bonds. Still, he added, it is important for investors to find portfolio diversity outside bonds this year. For that, he said he views commodities as attractive, specifically metals such as copper, which could continue to benefit from China’s reopening.
Ramona Persaud, a portfolio manager at Fidelity Investments, said she can still identify bargains in a pricey market by looking in less-sanguine places. Find the fear, and find the value, she said.
“When fear really rises, you can buy some very well-run businesses,” she said.
Take Taiwan’s semiconductor companies. Concern over global trade and tensions with China have weighed on the shares of chip makers based on the island. But those fears have led many investors to overlook the competitive advantages those companies hold over rivals, she said.
“That is a good setup,” said Ms. Persaud, who considers herself a conservative value investor and manages more than $20 billion across several U.S. and Canadian funds.
The S&P 500 is trading above fair value, she said, which means “there just isn’t widespread opportunity,” and investors might be underestimating some of the risks that lie in waiting.
“That tells me the market is optimistic,” said Ms. Persaud. “That would be OK if the risks were not exogenous.”
Those challenges, whether rising interest rates and Fed policy or Russia’s war in Ukraine and concern over energy-security concerns in Europe, are complicated, and in many cases, interrelated.
It isn’t all bad news, she said. China ended its zero-Covid restrictions. A milder winter in Europe has blunted the effects of the war in Ukraine on energy prices and helped the continent sidestep recession, and inflation is slowing.
“These are reasons the market is so happy,” she said.
What a quarter-million dollars gets you in the western capital.