Sjöholm is for sure not excellent, but this d core lacks physical defensemen and there is no denying he can play the body. With that said, I am not 100% sure I would have selected him myself, but he would not be competing with Wallinder for a spot since they are completely different type of players.
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As for USA and Finland, not sure if you are familiar with their players at all? Finland, for instance, has twice as many returning players, several players that are seeing key-minutes and scoring at high pace in Liiga. Our highest scoring SHL players are two defensemen at 11 points. All our forwards at top level, except William Eklund, are basically seeing 0-10 min ice time per game in limited roles. Half of the Swedish forward crop would not make Team Finland's roster. They have just as good, if not better, top players as well.
But yeah, this is all on "paper". The fun thing about the World Juniors is that upsets do happen, although for Sweden during the past couple of years, it has mostly been a negative thing. Cruising through the group stage and then quickly/surprisingly being eliminated in the playoffs. Hopefully the tables have turned.