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From Wall Street To Fantasy Baseball: How To ‘Short’ A Player You Don’t Own

The other day, while trolling though the usual lists of blogged recaps from the prior night’s games, we came across a gem.

The fantasy baseball analyst was admiring the hot start of  Charlie Blackmon, but expressing some skepticism about whether the rookie Rockies outfielder who has hit .400+ and five steals in his first week in the majors would keep it up. OK, fine. Everyone is entitled to an opinion.

What made us stop a moment to think, however, was the next sentence. The writer had said he had gone “short” on Blackmon by rostering Colorado Rockies outfield prospect Tim Wheeler, currently having a very fine year at Double-A.

Hmm, applying a Wall Street investment concept like “shorting” holds promise to the evolution of fantasy roster management theory.

We certainly know folks who advocate “buying low” and “selling high,” and we see some sophisticated traders in our leagues playing “arbitrage” by continually churning a roster depending where the market is at.

But  if someone recognizes the probability of another team’s player failing, is there a way to profit off of that?

Perhaps this question come across as nonsense to most folks. The most simple answer is, if you see a player like Blackmon on another team, and you don’t believe in him, you stay away. You don’t make an offer to acquire him. End of story.

This writer, on the hand, went beyond that notion. To him, Blackmon’s potential failure was something to be gambled on. The fantasy equivalent of going “short” on Blackmon is being “long” on Blackmon’s potential replacement.

Makes sense.

Tune in next week when we show how to get rid of “toxic assets” like underperforming superstars. Hint: we’ll be building “collaterized debt obligations” with tranches of varying risk and return and packaging them in trade. Owners of Justin Morneau won’t want to miss this one.

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The Toughest Position To Find On The Waiver Wire In Fantasy Baseball in ’11

Definitely, it’s Third-Basemen…

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Chase Utley

Time To Trade Chase Utley?

Anybody who drafted Chase Utley in spring training is probably feeling elated right now.

Some pessimists believed that Utley’s career was in jeopardy thanks to a bad knee injury. Others, on the more reasonable side, thought he would be out to the All Star break at the minimum. Instead, Utley made his debut last night, and while he didn’t do anything at all (0-for-5), he at least beat the prognosticating consensus on the length of his absence.

Some fantasy owners are now looking at the prospect of a bargain.

In preseason drafts, Utley’s stock was extremely volatile. All it took was one extremely optimistic owner to pay top dollar for the second-base stud to ruin any thoughts of attaining him at a discount. Then again, in many leagues, owners saw the bad newspaper headlines and were appropriately cautious. And maybe too cautious. We’re certain that in some fantasy leagues out there, Utley dropped to double-digit rounds, and in those leagues, Utley’s owner will now get 75% of an Utley season plus 25% of a replacement (those first six weeks).

Or will they?

Truth is, Utley remains extremely volatile. No one can say for sure how he’ll perform after a significant injury. Nobody knows how much pain he’s enduring on the field right now. And perhaps most importantly, there’s no one around — not even Utley himself — who knows for sure whether he’ll remain on the field for the rest of the season or have to be shut down at some point.

This may, in truth, represent the most important moment of the season for Utley owners. He’s back — surprisingly a tad early — and thus, enjoying some good health buzz. The opportunity to trade him at near-to-full-value may or may not be a short window.

We’re guessing that by definition, an Utley owner is an Utley optimist this year, and so, such a thought will come as heresy.

On the other hand, smart fantasy owners understand risk management. Hedging is a skill. Knowing what is truly unknown (Utley’s future) becomes important, and if there’s any way to gain 95% of a healthy Utley’s value by trading him, the sacrifice of that extra 5% could be worth off-setting the downside.

Of course, we’re making up those numbers, and each team is different. A fantasy competitor who owns Utley and is struggling in the standings may really need to keep Utley around for his upside and the prospect of regaining ground. Another fantasy competitor who owns Utley and is doing quite fine in the standings, in contrast, may want to lock in maximum value for Utley by trading him as to be relaxed that no matter what happens to him from here on out, it won’t matter.

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Will Curtis Granderson Make It To 50 HRs?

The beginning of the season is the beginning of arbitrary.

It’s now the middle of May, which means that many competitors are finally starting to take their teams’ performance seriously, and make adjustments, but nevertheless, player stats to date are still just one measure of performance.

Let’s crank up the arbitrariness and look at some statistical highlights since August 14th.  That’s a good three-month sample.

  • No surprise that Jose Bautista and Troy Tulowitzki are leaders in the HR category since 8/14, but how about Curtis Granderson at #3? He’s doing great in the power department this year, but he was doing pretty well at the end of the season too. He’s notched 26 HR in the past three months of baseball, which is akin to a 50 HR seasonal pace.
  • Can you guess who is #4 in HRs? It’s…Jay Bruce with 22 HRs in the past three months. But that’s not the most impressive thing. Actually, we’re more stunned by the .295 batting average.
  • Introducing the 19 SB club…those with exactly 19 steals since 8/14: Jose Reyes, Chone Figgins, Brett Gardner, and, um, Will Venable.
  • Among players with at least 100 at-bats in the last three months of baseball, Matt Holliday is second in batting average, Joey Votto is third in average, Josh Hamilton is fourth in average, and Victor Martinez is fifth in average. A pretty good crew. Wait, we left out the leader in batting average since 8/14. Yes, that would be Jeff Baker of the Chicago Cubs.
  • Finally, Carlos Quentin has hit 10 HRs since 8/14 and been hit by a pitch 11 times — tops in the majors.

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So You Think Your Players Are Oh-So-Special, Do You?

We have news for you: You’re overvaluing most of your players.

That’s ok, though. In fact, it’s natural. Just think about it for a second.

If you selected your fantasy baseball squad via a draft, you took players before anybody else did. If you attained your roster via an auction, you paid more for each of these players than anybody else would. In other words, you already proved you have the highest valuation of each these players.

But it doesn’t stop there.

Right now, there are players out on free agency who are destined to outperform some of the players on your team. Unfortunately, you don’t know which ones, otherwise you’d go get them. Still, you are overvaluing your players in relation to what’s not yet known.

And if you’ve already grabbed a few top-performing players off of the waiver wire, kudos — but realize, others had the same chance and some passed. Most probably believe your new, cheap addition won’t keep it up. It’ll be a while until those players shrug off the fact they weren’t drafted and were freely available until very recently. In the meantime, you will likely be your league’s #1 fan of so-and-so player.

Sometimes, mere ownership contributes to supernatural positive feelings about a player. Economists call this the “endowment effect,” which posits that emotional investment leads to reinforced commitment and robust valuations.

It’s hard to shake this phenomenon. If someone offers you a trade, you’ll immediately start focusing on what you’re giving up, probably giving short thrift to what you’re getting in return. In fact, if we had to bet, you’re so in love with a player that if offered a good exchange, you’d say no, even though if the tables were reversed, and you were getting the adored player you now own and giving up the player you now don’t own, you’d still say no! Your object of fixation would merely shift.

So, ok, the season is early, and we don’t trust small sample sets, but there’s only going to be one winner in your league, and there’s a good chance it won’t be you. You can be patient all you like, and there’s nothing wrong with that, but looking back in hindsight many months from now, if you did the math, we’re absolutely certain you would find you should have made this move and you should have made that move. Why didn’t you? Well, that’s easy. You were overvaluing what you had all along.

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Let’s Try To Reframe This Hall of Fame Debate

The big news in baseball over the last few days has been the sudden retirement of Manny Ramirez, upon word of a failed drug test. Inevitably, the next question that popped up is whether the slugger, who put up prodigious stats in his career, deserves to be in the Hall of Fame.

For most people, the answer is a balancing test: stats vs. morality; achievement vs. shame; everything that supports his inclusion vs. everything that supports his exclusion.

We see a problem with this analysis — Namely, it ignores the real purpose of the Hall of Fame.

Over the years, Cooperstown has evolved into baseball’s equivalent of the high heavens. Those who vote on a player’s inclusion have become the equivalent of Saint Peter at the pearly gates. The Hall of Fame has ascended to such lofty treatment, no doubt pleasing the powers-that-be in MLB, but it obscures the fact that for all its pomp and circumstance, the Hall of Fame is really just a museum.

By now, steroids in the game is fact, and while unfortunate as this fact may be, to ignore the role that steroids has played over the last two decades is to be delusional about what happened in baseball during this time. All the moral agonizing and frustrating search for truth by voters (did this player take PEDs? Did that player?) would be irrelevant if it was acknowledged that the primary mission of the Hall of Fame is — or should be — to educate folks about the history of the game, both good and bad.

That’s part 1 of our argument. Now comes this…

This may sound strange coming from a website that’s devoted to statistics, but voters and Hall of Fame observers spend too much time considering numbers. Yes, the beauty of baseball was that the rules hadn’t changed much over the years, and thus, statistics became a nice measuring stick by which we could compare one player from one era with another player from another era, but by now, it should be well understood that while the rules haven’t changed, the way players have exploited those rules certainly have. In other words, statistics can’t and shouldn’t be the end-all of conversation when determining a player’s merit for inclusion.

The first part of this post may have sounded like a rationale for letting a player like Manny into the HOF whereas the last paragraph might have sounded like a rationale for excluding a player like Manny. There’s a good reason for this.

More subjectiveness should be incorporated into Hall of Fame selection. This will come off as totally against the sabermetric creed, but it’s the only position that really withstands both logic and a moral compass.

We believe Manny should be in the Hall of Fame because he’s important enough to the era that ignoring him is too big. He can’t simply be written off as never happening. Manny being Manny actually happened. He achieved all those great stats, and if his plaque has an asterisk for a couple of failed drug tests and further suspicion noted, we believe that’s ok. Actually, better than ok. To understand how baseball was played in the 1990s and early part of this century, a future visitor to Cooperstown must learn about Manny Ramirez. Otherwise, voters are guilty of white-washing the era and absolving the steroids cheats. They become complicit, in our view.

By the same measure, we would argue against the inclusion of guys like Craig Biggio, Todd Helton, and Mike Piazza — players whose superlative stats would in the commonplace test get them into the Hall of Fame, no problem, but might not pass the muster of being this past era’s most important players. That’s not to say any of these guys used steroids — who knows, really? But one thing we do know is that stats can no longer stand as the measuring stick, and so if we’re judging without leaning on a statistical crutch, these players might not pass the new test.

Or maybe they will. But each Hall of Fame voter should not make a determination based on a careful weighing of stats vs. suspicion, but rather which players should be in a museum in upstate New York. That’s it. Consider tomorrow’s baseball-interested visitor and figure it out.

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Why Easing Up On Starting Pitching Might Be A Good Idea This Month

An observation of fantasy leagues: Competitors tend to use starters more in April than any other month, giving the ball to back-of-the-rotation pitchers to carry more of the load.

Maybe it’s because most competitors are excited to play in fantasy leagues after a long off-season. Maybe it’s because competitors are overly optimistic about what these lesser starters might be capable of producing in the new season. Maybe it’s because competitors are desperate to move their standings needle. Or maybe it’s because innings limits aren’t much on people’s minds in the first month of the season. Whatever the reason, fantasy leagues see more pitcher starts in April.

Is bulking up on starts in April a smart strategy or is there something to be said for pacing oneself?

We reviewed monthly splits for starters for the past five years to get an idea. Read more »

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Searching For Meaning In A Few Games of Baseball

What can we learn from the first weekend of real baseball?

One word: Little.

This won’t soothe those who drafted Evan Longoria in the first round and Matt Holliday in the second round compared to, say, Ryan Braun in the first and Mark Teixeira in the second, but there’s just very little chance that 2% of the season will be statistically indicative of final standings in fantasy leagues, no matter what happened these past few days.

Of course, there’s a difference between statistically indicative and statistically significant. Yep, those games do actually count and given the millions upon millions of leagues out there, a few will likely be determined by a very close race in one of the categories. No doubt there’s a league out there that will decided by a single RBI, for example, perhaps that missed RBI as the result of a diving Curtis Granderson catch. Given the choice between having a great weekend and having a bad weekend, who wouldn’t choose the former?

Because the games count, there will also be the tendency by some to use limited data to confirm our preseason notions of what’s likely to occur in the 2011 season. Javier Vazquez pitched a stinker? Some will see that as confirmation that he’s on the downside of his career and wasn’t worth drafting anyway. John Axford blew a save? Some will see that as confirmation that his efforts in 2010 were merely a fluke. Never mind it was merely one game.

Then there are the players who will defy expectations in the early-going, provoking some rational-yet-reaching explanation of the phenomenon. Mark Teixeira already has 3 HRs? He’s always gotten off to a slow start! It could just be his cold past Aprils were a product of random chance, but since that won’t satisfy people’s psychological need to read too much into very little, Teixeira will be accredited with paying more attention to baseball this off-season, thus paving the way for better early returns.

How will we really know when to take the numbers seriously? How’s this? When the difference between your team being in great position or bad position in the standings, or vice versa, isn’t dependent on what happens on a single day. Or better yet, if the Kansas City Royals are in first place in their division, know it’s too soon to draw conclusions.

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2011 MLB Predictions

  • World Series: Atlanta Braves over Boston Red Sox
  • NL Surprise:  Cardinals fall out of the race early…trade Albert Pujols to Oakland Athletics
  • AL Surprise:  Oakland finishes just ahead of the New York Yankees for the Wild Card
  • NL MVP: Hanley Ramirez
  • AL MVP: Adrian Gonzalez
  • NL Cy Young: Roy Halladay
  • AL Cy Young: Brett Anderson
  • NL Rookie of the Year: Freddy Freeman
  • AL Rookie of the Year: Jake McGee
  • NL Breakout Player: Dexter Fowler
  • AL Breakout Player: Kila Ka’ahihue
  • NL 1st Round Bust: Carlos Gonzalez
  • AL 1st Round Bust: Robinson Cano
  • NL Buzz Kill: Daniel Hudson
  • AL Buzz Kill: JP Arencibia
  • Injury Prediction: Chipper Jones plays more than 110 games; Chase Utley plays less than 60 games
  • First manager fired: Ozzie Guillen
  • Random prediction: League gets shut down for two weeks this summer following unfortunate catastrophe. (Disclaimer just in case I’m right: No actual knowledge of said catastrophe.)

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How To Tell Which Umpires Are Calling A Baseball Game

An addendum to yesterday’s post about how to leverage information about umpire assignments to gain one more advantage in figuring out the runs-scoring environment in a baseball game.

Naturally, the question might be asked: OK, sounds great, but how do I figure out which umpire is calling a game?

Gamblers and odds-makers in Vegas have long been onto this sort of stuff, which is why MLB is rather careful about revealing umpire assignments much in advance of a game. In fact, legend has it that big-time Vegas bookies actually trail umpires on their travels in order to glean that information advantage.

The information about umpire assignments is easiest to leverage in the second, third, or fourth game of a series of games between MLB opponents. That’s because umpires typically work in crews, and members of a crew work together for an entire series. Additionally, there’s a set pattern to the way that umpires have assignments from one game to the next in a series: They usually rotate counterclockwise on the baseball diamond.

Meaning, if Jerry Crawford is at second base during the first game of a series, he’ll be at first base during the second game of a series, and then behind home plate during the third game. Most of the time, that is.

Of course, figuring out the umpires for the opening game of each series is a bit tricky. That’s a closely guarded secret that usually only becomes public about twenty minutes before the start of a game.

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