System
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The big question at the time of Poch's appointment was whether or not we had the right players for his system. Back then I thought we did (apart from 2-3 signings), it seems that we are actually a long way off that. I do think that we don't help ourselves by making the pitch smaller than it needs to be. The Arsenal system was a one off, designed for the counter attack. Personally I'd hate to see us play like that every week. All in all I'd prefer to see us go back to basics with a 433 that provides the defence with a real screen.
Recruitment
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I'd echo elltrev's post about the 2012 Champions League final. Our best players wanted that more than anything and when Chelsea nicked it I also thought we'd be in the **** for it. It was however the 2013 5th place which was ultimately the problem. Look at Liverpool's purchases this year after the Suarez sale. Yes they aren't doing great but most of them are proven quality. Us?? We had to sell Bale and then purchase players who would be happy coming to a club outside of the Champions League. People may think that signing a couple of £30-£40 million players was the answer, but what top players would do that without either massive wages or UCL football??
We are forced to do what we do because it's the only hope we have. It just means we have to ride out the learning curves of the young players we have and hope they come good.
Mentality
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Young players + no natural leaders. Kaboul always took his cue's from King and was never in charge of the team nor the defence. The spine of Friedel, King, Parker and VdV was both strong technically and mentally and they were also experienced. Modric came into his own in his last season, but really only Bale and Walker were the youngsters learning their trade. Now we have perhaps 3-4 old heads in the starting XI, and that's including Ade whose mental fortitude has always been in question since his Arsenal days.
First purchase in January for me is that man in midfield who will kick the others into gear.