The Argentina striker is now in his second season with Atletico Madrid, where he has been outstanding in the LaLiga and Europe.
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Guardiola said on Friday: "The Treble year, do you remember the players I left on the bench? Aymeric Laporte, an incredible central defender and a regular for the national team, Julián (Alvarez) and others who I would love to have now, but they wanted to play more and left.
"Julian had to compete with Erling (Haaland), which was something extraordinary for us. Now he's at one of the best teams in the world, Atlético Madrid, with a world-class coach (Diego Simeone) and teammates, and he's performing incredibly well."
He concluded by admitting : "Now I'd love to have him with me... but I understand."