Think you are both right. Bringing in players cheap, then selling them for big profits and somehow finding the next great player for cheap is probably the only chance you have.
But it's not a great chance; it's almost impossible. Which is why you don't see clubs like Southampton breaking into the top 6 very often.
A high league position is rather key in commanding (or declining) the high fees. Good players in good teams go for more money than good players in so-so outfits. A fine balancing act for Saints. It could be argued that relative success in the Europa, and a decline in the league would effect the current profitability of player sales.

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