Lost in Translation: Why Your Projections and Dollar Values Won't Save You

We've been having a robust debate on the Card Runners Fantasy Baseball Blog with the poker and Wall Street guys about who has the edge in our league and why. To sum up: I feel whoever knows the player pool best and has the best instincts, i.e., knows the facts and how to interpret them on the fly, should be the favorite, whether that person is a fantasy baseball pro or a poker player. They seem to think having a good model which can convert stats to dollar values is also relevant. Let me explain why I think they're mistaken.

When you have a hammer, everything looks like a nail

If you're able to build models that do a good job of figuring out exactly what 20 HRs, 80 RBI, 75 runs, 9 steals and a .291 batting average in 550 at-bats is worth in a given environment, you'll be inclined to imagine that you can use that to your advantage in fantasy baseball. I would argue you cannot unless very specific conditions obtain. Those conditions are that either that everyone is using substantially similar projections to you, is worse at translating them to dollar values and is very strictly sticking to their dollar values at auction time; or (2) That the projections you're using happen to be right. Both cases are extremely unlikely.

Few people are depending on exact projections, many projections vary significantly and many people don't even bother with projections or dollar values.

Old school types like Lawr Michaels (reigning AL Tout Champ) and myself (reigning mixed Tout champ) just go into the draft with a list of players to cross off. (Actually, I'm not even sure Lawr does that). Speaking for myself, I have no preconceived dollar values in mind, haven't usually made up my mind when to stop bidding on a player, and certainly don't have precise projections for any of them. I try to know the player pool deeply (from historical performance, to health to team context), use past experiences with pricing in the given format and adjust for market conditions on the fly. I translate player knowledge directly into bidding or keeping quiet based on all of these factors and skip the intermediate translation into projected numbers completely.

The argument against this is that surely I'm doing some kind of translation - I'm not just buying players at random. So I must have a sense of Derek Jeter's numbers before I pay $27 for him. That's true, but I think it misses the point. I don't speak French very well, so if I hear someone say something I can understand in French, I translate it to English first, and then I know what it means. But if I really learned to speak it, I would just hear the French, and *know* what it meant. Because I am not well versed, I must include an inefficient translation step. I think the same thing applies in fantasy baseball. If you know the players well enough, and you see what others are going for and know what similar players have gone for in the past, I believe you can translate facts directly into action. The facts plus the knowledge of the format and attention to the market as it's happening go directly into your ears the way a known language would. You don't have to translate it into the math first. (The only math I'm doing at auction involves my budget - never the players or their projections).

So you might argue that you've created a much better French to English translation program than me, and therefore you have the advantage in understanding the language, but then I tell you - "dude, I don't need one - I already speak French fluently!"

So not everyone's using your same framework, and I would argue your model assumes a basic inefficiency that occurs because you're relying on someone else's numbers, and you don't know the player pool fluently enough to bypass that step.

Your projections are necessarily wrong

Ron Shandler told Jeff Erickson and me on the radio this past week that something like 40 percent of the industry consensus top-15 picks actually finish in the top-15. And you can imagine the attrition rate gets worse the deeper you go into an uncertain pool. To that end, Shandler - who has advanced the ball on fantasy player evaluation about as much as Bill James has done so in the real-life game - has proposed the Mayberry method of simplifying player values into 1-5 ratings. Under this strategy, it no longer matters exactly what a player will do - after all it's impossible to know whether Albert Pujols will hit 38 or 48 homers, so it gives him a rating, e.g., 5. And the aim would be to fill one's roster with the players who have the best rating to cost ratios. (I'm sure I'm oversimplifying here), so feel free to provide more details in the comments.

Those who believe in the sacredness of projections might argue that Pujols' precise homer total is a problem of variance, but that doesn't prevent you from setting a median over/under number and using it as a baseline. Well variance is part of the problem, but it goes deeper than that. To know the true median number requires knowledge it's just not possible to have. In a game like Texas Hold 'em, we can know with certainty the expected win percentage of JJ vs. AK. That's because every deck is exactly the same in every relevant way. Not so with baseball players who are unique, and whose circumstances every season are unique and not repeatable. So when a supposedly declining Jeter hits 18 homers, steals 30 bases and hits .334 in 634 at-bats, it's impossible to say how much of that was due to variance, i.e., our median projection was correct, but he had his 95th percentile season, and how much of it was due to our projection flat-out being wrong.

We encounter this same problem when handicapping football games. After a 4-5 game sample, it's not always too hard to determine what a team's median performance level is, and we can compare it to the team they're playing and create a line. And just because last week, one of the teams played great and the other terrible, doesn't mean that both will do the same when they meet on Sunday. The great and terrible performances can be attributed to variance - one team played to its full capacity, and another played below it. But we have 4-5 games for each to know what the baseline is for each, and while last week's contests will be a factor in that, we're going to use the entire sample to determine capacity.

The other thing we can do is season our capacity analysis with a broader historical perspective. Winning on the road in the NFL is always difficult, and maybe the game will be played in cold and windy weather where it might be harder to throw the ball downfield - okay, we factor that into the line , too - no problem.

But what happens if the team that won in a blowout last week didn't merely play to its maximum capacity but shifted its very *identity*? In other words, it didn't just play its 95th percentile game, but actually played its 60th percentile game because it's no longer a mediocre team but a very good one. The baseline moved. Examples of teams whose baselines moved are the 2007 playoff Giants who barely made the playoffs then beat the greatest regular season team in the history of the NFL, and the 2008 Cardinals who limped into the playoffs then nearly took down the No. 1 defense in the NFL and would very like have but for James Harrison's miracle 14-point play at the end of the first half, and Santonio Holmes' incredible game-winning touchdown catch.

So the idea that teams or players have baselines, and all movement is variance around them is obviously fiction. Players change every year not just by varying around some median baseline but by improving their trajectory, growing their skills. Matt Holliday was a middling prospect, then a Coors Field product, and now he's a bona fide star. How did that happen? Because what a player is at age 22 or 24 or 26 does not determine what he'll be at 30. Or to the extent it does, we're just unable to read it correctly.

After the fact, we can see that Holliday's career went on a different trajectory altogether, or that the 2007 Giants had a much higher baseline than we imagined, but it's much harder to see in real time (after the Giants won in Tampa in the Wild Card round, for example) and harder still to know or "project" in advance. Moreover, it's impossible to say with any precision how much of the Giants run was variance, and how much of it was their being a different team than they were the previous month. It's something to which we can never know the answer. In poker, if someone hits a two-outer on you, you can know exactly the extent to which you took a bad beat.

Because trajectory changes are inherently unprojectable with any precision - (after all the whole concept of trajectory *is* our projection), your dollar values will necessarily be wrong. And I haven't even gotten into the difficulty of predicting and evaluating player volatility where Conor Jackson and Cameron Maybin might fetch the same price at auction, but whose ceilings and floors are widely disparate.

If one's projections are necessarily wrong, and not everyone needs to translate the facts into precise projections or dollar values before taking action at an auction, I don't see how doing so and having a good translation system confers a meaningful advantage.

I'll add one more speculative thought here about what I think makes a big difference in winning fantasy baseball leagues, and that's imagination. I like to try and draft off the 2011 cheat sheet usually, and the only way I have access to that is by imagining what it will look like. We can all try to do this, but I think the imagination is like a muscle of sorts, and not only must one use it and trust in it over time, but also provide it with feedback so that you know where the limits are, what's wishful thinking and what's really possible. You must be open to unlikely possibilities as well as likely ones. The biggest mistake experienced owners make is to imagine that K:BB ratio is constant, or K/9 from last year determines which pitchers have strikeout skills. The more rigid one's system, the less likely one will be ahead of the curve when something unexpected happens. Wayne Gretzky's father told him to "skate to where the puck is going, not to where it's been," and I think that's the goal here, too. If you keep an open mind, and consider the possibilities, then you have a chance to be there already when the possible becomes the actual. If you're waiting until your model can absorb the new information, you're already too late.


By: tbear839
On: 4/10/2010 11:54:00 AM
What I HATE about projections is when they "project" injuries. If a player has been injured in the past it doesn't mean he'll be injured in the future. Some of the projections I see here and on other sites have guys like Soriano and Magglio "projected" to get injured or miss time. I think the projections should reflect what the player's projections are on the assumption they will play. In the two examples above, both players are healthy and neither has a real threat to their playing time. Neither has played poorly when healthy (Soriano pre-wall crash and Magglio post wife cancer scare). Although the projections could reflect a regression in skills due to age, I find them not useful when projecting playing time based on some injury about to happen.

Good read.
By: Chris Liss
On: 4/10/2010 2:00:00 PM
thanks - as for injuries, I do think you have to dock Milton Bradley or J.D. Drew, but one thing people forget is that if Bradley has a 40 percent chance of missing 40-plus games, it's not like a totally healthy player like Mark Teixeira doesn't have at least a 10-15 percent chance. On the other hand, I really can't stand the projections systems where everyone is docked 10-15 percent on the chance of injury, so the league-wide totals add up. The idea is that some players will miss time, we don't know which ones, so let's build that into the expectations. It makes perfect sense, but it's annoying because, as you say, we obviously understand that anyone can get hit by a bus. But what numbers do we think he'll have if he stays healthy - that's what we want to know. And btw, Soriano and Mags are two players I targeted this year for that reason. Have Mags in three leagues, Soriano in one.
By: Skinsnutt
On: 4/10/2010 3:10:00 PM
I have always considered projecting stats as both ridiculous and borderline pompous. Looking at a player's age, skill set/pedigree and track record should be all you need to give you an IDEA of what to expect for an upcoming season.
By: andtinez
On: 4/10/2010 4:08:00 PM
The team you start with on day one is never the team you end with because you make adjustments. Is a player unlucky, are his skills diminished, or is there some other unknown force at work, possibly emotional? There are stats that can help us figure this out, but sometimes because of the sample size, we're on our own to figure it out. Someone who has been there many times before and uses their gut will be right more times than not. I'm not sure how any projections can help you here.

Mayberry method is new and I've played around with it some in getting ready for my drafts/auctions. It's really about collecting skills rather than worrying about stats.

"You must be open to unlikely possibilities as well as likely ones." - I think that's what I like most about your outlook on things Chris, you think about all the possibilities and not just the ones that are most likely to occur. There is much to be gained from thinking about the unlikely and unknown.
By: quails144
On: 4/10/2010 5:38:00 PM
Thanks for this..... Love the theory articles we've been getting from you lately Chris.
I'm thinking more and more every year that player projections mean a lot less to success than how one actually plays the room, i.e. gets as many "undervalued" players as possible relative to everyone else.
Which is I guess your main point.

My question is, how much skill is really involved here, and how much luck?
I mean, in any given year you could play the sh$t out of everyone, get all the guys you "liked", and then watch in frustration and mounting anger as they don't do what you thought they would (bad start, manager bias, line drives hitting guys in the glove, etc.), and yet you'd done everything you could on draft day.
Is it possible there is a core group of, say, 30 players that are generally undervalued, or have more upside, and if you have a great auction/draft, you'll get maybe 5 or 8 of them, but if it's the "wrong" 5 or 8, you're SOL?
How does one overcome this?
Hope for next year? Aggressive in-season managing (ok, maybe)?
Where's the optimal balance between drafting for value and drafting against the other guys in the room?
I doubt we will ever be able to know, except after the fact.
By: jdredd
On: 4/11/2010 6:13:00 AM
Initial responses are up on the]Cardrunners blog. . I think your french to english analogy is a fine one. My question is this- if we take 10 such 'fluent french speaking experts' and get very different answers from them on the same question- what do you make out of this? Clearly some are not as fluent as they think they are. It's entirely possible YOU are, but math allows us to judge these answers well. Without it, we are just left with a bunch of guys all claiming to speak French.

Like it or not, bidding $30 for a player is tantamount to making a projection for him. All we're basically arguing is that before you bid $30, you should have some awareness of a) what this player's outcome distribution is and b) what those outcomes are worth in $ values.

Without it, you guys can talk about 'finding value' all you want but you're like guys panhandling for gold, but refusing to use scales, maps, or metal detectors. Sure, you can bite it in your teeth and maybe that works a lot- especially if you've been doing it a long time. But there's nothing stopping you from biting it AND using a scale.
By: Chris Liss
On: 4/11/2010 10:28:00 AM
Eric - first off, many experts - do translate to numbers (English) first before making a bid. So in that scenario you have a point. But to the extent that people like me do not, I'm responding to the inputs as I see fit. If someone says something to 10 different people in a language they understand, each might respond differently, with a good deal of overlap. I don't think there's a translation issue - but that doesn't mean different experts won't let certain players pass and bid on other ones instead. Are some right and some wrong? Well, clearly there are mistakes given the relative values of players, one's budget and the depth of the player pool, but in many cases it's impossible to know. I pass on Paul Konerko at $13. Someone else says $14. Did he make a mistake? What if Konerko hits 25 homers and bats .270? Did Konerko earn $14? Does it matter in terms of whether the decision at the time was right? I don't know. But we all understand what's going on, and we don't necessarily need to look at our spreadsheet for that understanding to occur.

And yes, I have a vague understanding of what a player's outcome distrbution is, but I don't want it to be precise because there are a lot of possibilities both likely and unlikely, and I don't want to pretend that I can somehow narrow it down more than I really can. It's unknowable, and so I keep my understanding loose, flexible. It's more important to fit that player into my budget and price him according to the market at the time given my generally idea of him than to get really precise with his projections.

Finally, if you're panhandling or gold, but you know your scale is off - and off unpredictably - sometimes light, sometimes heavy - you might just find that one of your crew can hold the nugget in his hand and be more consistently accurate than your scale. Until someone builds a better scale - and trust me - no one's projection system weighs players even close to accurately, I'll go with the guy. You can put it on the scale, too - but why even confuse yourself?
By: Chris Liss
On: 4/11/2010 10:30:00 AM
Quails - I think that's true - you could get all the right kinds of players at the right prices and have enough bad luck that you can't overcome. But I think over time, you'll come out ahead. And there's always some drafting for value based on your budget and needs. You pick the explosive growth guys as much as you can, but will have to fill your roster with some Carlos Guillens and Scott Podsedniks at some point.
By: Chris Liss
On: 4/11/2010 10:36:00 AM
Andtinez - appreciate it. I think there's a learning curve with these things that goes from guessing, to knowledge, to recognizing the limitations of that knowledge, and once you get there, a kind of creativity takes over. You're at the limit, more or less - though the limit does slowly advance as new metrics and ways to track players are discovered - and then you have to use imagination, instinct, "feel", so to speak to make a difference. Some of it is probably dumb luck, but I do think over time that one gets a sense of what's possible even if unlikely from different players that confers an advantage. I think the biggest key is to look at each player afresh - not assume you know who he is. You see a Bobby Crosby or an Alex Gonzalez and wonder why they can't hit 20 homers this year if they stay healthy and get the playing time. Players like that are usually dismissed, but in an only league, can make a big difference. Maybe that keeps you from overbidding on J.J. Hardy, and then you have money left over for pitching or an outfielder. (I don't want to jinx Gonzalez because I have him in two leagues - and the worst thing you can do is crow about a good pick after one week).
By: jdredd
On: 4/11/2010 4:09:00 PM
I think you've mixed the metaphor a bit. The scale is very accurate (assuming Bill's model is as good as he claims), but its the inputs that are hard to pin down. Perhaps its more like i'm weighing something on the scale, and I don't know if its gold, fool's gold, or perhaps even lead.

This still is a very valuable tool. It's fantastic for doing stuff like saying 'Well lets say Jeter hits .323 with 18 HRs 32 sbs 120 runs- what is that worth?' You plug it into your model/scale and get a precise answer. Then you say 'Well lets say Jeter hits .305 with 12 HRs and 19 sbs and 100 runs- whats THAT worth?' and so on.... You can plug in whatever numbers you like and get a very precise idea of what his various outcomes are worth. When you have a good sense of the value of his ranges, you can get far more comfortable with your top bid. It's a valuable tool, that is all.

I'll leave it to Bill to debate the merits of projections. That's really beyond my ability.

By: Chris Liss
On: 4/11/2010 4:34:00 PM
Well, I meant the scale to be knowing what you have, and the conversion process to be what that's worth. But either way, it's just a metaphor. Did Bill really pay $16 for Johnny Damon! I'm sure he'll have a huge year now that I've mocked it - one thing I know for sure is that players perform proportionately to the extent they're ridiculed during your draft. The worst thing someone can do is praise your pick.
By: jdredd
On: 4/11/2010 6:00:00 PM
Yes, and then I traded for him with my 17$ lackey

No one else had any hitting to spare :<
By: jdredd
On: 4/12/2010 4:54:00 AM
Did you mock Damon somewhere? I don't love owning him, but I have a hard time seeing 16 as mockable.
By: Chris Liss
On: 4/12/2010 7:17:00 AM
I just mocked it now. He didn't run much last year, and power wise he should take a hit with the change of parks. Of course, he could run more, and maybe the power dropoff won't be that big. But when pods went for 4 and guys like matsui 8, 16 seems high. Bill must have him projected for 22 and 15 or something with lots of runs.
By: jdredd
On: 4/12/2010 8:53:00 AM
Well, how sure are you thats what Damon needs to do to be worth more than $16? That's kind of our whole point about the pricing model.

Because I think if Damon DID hit 22 hrs 15 sbs, and even giving him some other just reasonable numbers like 90 runs and 55 rbi and a small plus on batting he's worth around $21. That's a pretty big difference.

Bill got Matsui too, I think he was probably one of the better buys in auction. He was also a bit gimpy and possibly DH only. Pods may also turn out to be one of the better buys, he's sure off to a nice start. But I don't think they're really the standard to compare to, and neither really makes Damon at 16 mockable. I'd love him for sure at 14.
By: Chris Liss
On: 4/12/2010 10:00:00 AM
Yeah, but there's the volatility/downside issues, too - Damon's not likely to break out, and he could decline, so his numbers - whatever you make them can't command the same as say Adam Lind's numbers on a per-stat basis. And I agree I used a couple bargains to make my point, but Damon still struck me as expensive given his risk/reward scenarios and the downgrade in environment.
By: jdredd
On: 4/12/2010 12:13:00 PM
Sure, he's not going to break out and sure, he might decline.

But if all he has to do is 22 hrs 15sbs, 90 runs, 55 rbi to be worth 21$ how can you mock him at $16? It's not like he has no upside from these numbers either.

More importantly, he can do quite a bit worse than this and still easily be worth $16.

Is this really different than your $41 Arod? Again, not that Arod has no upside at $41 but I suspect a $16 Damon has both more upside and less downside. It's also not like Arod has no decline possibilities, or lingering hip issues. And its a much smaller percentage of the budget....
By: Chris Liss
On: 4/12/2010 1:05:00 PM
But (knock on wood) ARod's a far more reliable player at this stage of their respective careers and given that he's in his current environment. So I'm risking $41, but looked at differently. I've got 15 percent of my budget in a blue chip stock. While Damon's downside is less obviously given the cost, and upside possibly greater given the cost, the distribution of upside and downside doesn't favor him. In other words, a significant Damon decline is more likely than a significant ARod one, barring injury. (again, knock on wood - I hate to be cavalier about my player's production because anything can happen).
By: jdredd
On: 4/12/2010 3:56:00 PM
Even granting your characterization, is that really what we're trying to do?

Like I noted in one of my posts on the CR board, this isn't like a poker cash game or a stock investment. It's like a poker tournament, and all the prize money (and/or gloating) is in winning. To win, we need to score substantial upside and have good buys. We aren't really looking for a safe and steady return, or the surety of not losing. You've suggested as much yourself in a number of spots, both here and on the CR board that it's not the $2 purchases under value that win leagues- its big wins, like $5 players turning in $25 seasons.

Put another way, if I told you for certain that your $41 investment in Arod was going to get you for certain $41 to $43 in performance, I don't think anyone would jump at that opportunity. Is it really so hard to get safe, fair value for your money anyway, that I should invest so much in Arod to do it?

And really as far as downside goes, I think injury issues aside (and Arod's hip is non trivial) you are far more likely to see a big loss with Arod than with Damon, even in percentage terms. I think Arod is far more likely to turn in a healthy $30 season than Damon is to turn in a healthy $12 one.
By: Chris Liss
On: 4/12/2010 5:44:00 PM
Yeah, but Eric - I think you're missing a larger point here - and this really is the subject for another entire blog post - but you cannot field a team of $5 players who earn $25 because then you'd only have spent $140 or so. You need to spend all $260. The best way to do that is to get a combination of massive producers (stars) and then hit a home run with the scrubs. (The $10 or less players are usually the ones that blow up the most because they have room to do so). ARod gives me $41 or $43 or whatever from ONE ROSTER SPOT. I still have all my other roster spots to make profits with. So no matter what happens, we're limited by roster slots. You cannot have 56 $5 players with your money. You can only roster 28 total. So if I have one spot earning that much money, I have a leg up if I can get profits out of my other spots. That's why my teams always project out poorly even when they end up winning. Because whatever scrubs I draft have bad projections, but by the end of the year, I'll usually have gotten more out of those lesser slots (in this case pitching ones or MI) than I paid for at the draft table.
By: jdredd
On: 4/12/2010 6:15:00 PM
I totally get that, and I'm happy to let this debate drop since we've got so many others waging on CR....but it's just not that hard to tie up large sums of money if all you're looking for is fair value. It's not like we have 10 roster spots. We have 23 (even more in the CR league arguably since u can spend money on your reserves.) After you buy your Arod you can spend about $10 bucks on average on your remaining guys. Does it really seem like such an advantage to tie up so much money? It's not like you cant find a few $20 guys to spend on, and you might get better deals than a $41 Arod. If you buy a couple of $18 Abreau's you might tie up almost the same amount of money and actually make a few bucks in expectancy.

It really sounds like you are saying if you could start the auction with $160 dollars and know you were getting $85 in value for sure, you'd jump at the chance. It seems, particularly as an expert, that you can often do much better while rarely doing worse.

By: Chris Liss
On: 4/12/2010 6:17:00 PM
I accept that drafting ARod is also higher risk because if he gets hurt, it's going to be very costly for me. ARod is likely to cost me more dollars due to injury than Damon because even if Damon were twice as likely to get hurt, a day without ARod is worth 2.5 days without Damon (at least in terms of cost). But that's why buying stars is the most aggressive method - you're gambling on a huge score from a single roster spot - and trusting that you can make moves and fill in the rest of your roster to catch up elsewhere. So the stars and scrubs guy is the one that I'd argue plays better in a 10 or 12-handed pot. Finally, if you're going to spend $30 plus on a player, it should be someone who, knock on wood, is pretty durable. Floor is more important than ceiling with big purchases.
By: Chris Liss
On: 4/12/2010 6:25:00 PM
that last post wasn't a response - just an add on to my previous one. Here's my response to your post: I think if you can get $85 in value for sure from two spots, that's a win for the reasons I've said. My philosophy in an auction is to buy 4-5 high priced guys, then wait like crazy and swoop up bargains at the end (Pods, AGonz (sure I can say that now), Guillen, Callaspo, Niemann, etc.) Hopefully, I didn't just jinx half my team. You've got a big leg up in a lot of slots, and you still try to get a full slate of at-bats, and pitchers with a heartbeat. I might need to deal for more pitching (I don't have a win 8 days into the year, though Niemann got hit by a line drive, and the Indians pen cost Westbrook one). I really was agnostic about ARod and Longoria, even Jeter. Just got them because they're good. Don't really expect a profit, or maybe just a small one. (And actually ARod always goes for 40+ in 12-team LABR, so if that's in the ballpark, he's worth more here because it's easier to fill out the rest of the roster with 10 teams). Got Jeter because the SS slot is junk in the AL (at least it looks that way, but who knows), and wanted a leg up on that basis. Same with Rivera and closers. So yes, you make your profits late, but you want some blue chips in your portfolio to crush the competition on a per slot basis. It's risky because (a) if a blue chip gets hurt, it's tough to handle and (b) because you better be good at finding bargains late, FAABing, trading, etc. But I think that's the job of an expert manager. Your expert GM gives you a framework and trusts you to get it done in season.
By: jdredd
On: 4/12/2010 7:07:00 PM
I agree there is some merit to your arguments, I just think you're overstating. Getting $85 in value out of two slots is only a win if you spent less than $85. It's just not that hard to get money in at fair value that tying up a bunch of it has some kind of bonus value.

I have no doubt you do great at the back end of the auction, I'm just suggesting you can do better at the front end than a $41 Arod. I FAR prefer your Jeter buy, and buys like it.
By: Chris Liss
On: 4/12/2010 10:05:00 PM
First off, Eric DO NOT jinx Jeter. CR isn't even the only league I have him in. Second, I think you guys undervalue ARod and other stars. The idea is that if you buy ARod for 41 and scrub x for 1, it won't equal two $21 players. But scrub x's projections mean nothing. He'll be dropped if he doesn't produce for scrub y. Or scrub z. Between all the turnover, and upgrades, I expect to get much more than $1 in value from that flexible slot. That is if I didn't already nail it in the auction. So that $5 *slot* (or whatever you want to call the total value I squeeze out of it) is not priced into your model. And for every cheap player, that applies. For a $21 or $41 player, it does not - they're in those slots for good, and you probably won't replace either if they go down. So when you consider you $21 player's value over replacement, he's not dealing with scrub x's projected stats, he's dealing with much better. And so replacement value is higher than your model realizes because it accounts only for projected stats. And the higher replacement value is, the more important and valuable the stars are.

In other words, the $1 players are individually projected for not much, even though we know the best of them will do well. Collectively, there is a lot of value there. So when you talk about the value of the SLOT in the right hands (and with some luck), replacement value is higher, and AROD is more valuable relative to Damon than you imagine.
By: jdredd
On: 4/13/2010 4:53:00 AM
Nothing stops you from trying to hit it big with $1 players. You don't need to buy a $41 Arod to do it. Maybe your teams do project badly, and I'm sure you do squeeze extra value out of the scrub slots as you sift constantly for the guy who is going to make it.

My point is simply this: You don't need to tie up huge sums of your investment capacity at fair value to do any of that. You should be looking for better here. You aren't going to get stuck with an unspent $25 at the end. That never happens if you're remotely competent. By FAR the more common scenario is running out of money when there's still guys you want to buy. Suggesting I should just slam down fair value for $40 instead of trying to get better prices is illogical. There are lots and lots of opportunities to spend my money, and I should be fighting in every one of them for a profit. Those profits, even if only a few bucks each time do add up to something significant. If I really, really can't find anything good I'm sure I'll find a few $20 players for $20 somewhere.

As for the rest of your argument, about their model essentially being wrong I don't think thats particularly fair. I don't think you know enough about their model at this point to say something as bold as it miscalculates replacement value, and can't price the best player in the league right. We've mostly been proceeding in these debates under the assumption that Bill's claims of hyper accurate pricing are correct, and you've been arguing that it doesn't matter because of the theoretical limits of the inputs to the model (projections) and that your intuition is also accurate in pricing.

I still don't see how you can possibly find Damon mockable at $16. What do you think he's really worth?

Lastly, I had a dream last night where Derek Jeter woke up with a twinge in his knee, fell out of his window and dropped 25 stories into a shark tank.
By: Chris Liss
On: 4/13/2010 7:21:00 AM
Again, I think you're missing something here Eric - that one can get more than $1 with the $1 slot means replacement value is higher than the number that goes into a model that projections all drafted players. That means two things: (1) That stars are worth more than the model that Robert described would attribute to them. (2) That it's impossible to use projections for the drafted players, apportion $2600 between them and have a complete picture.

That's why if ARod (who again takes up just 1 slot) is actually making a profit even though under your system he earns just fair value. Second, if one is good at filling the slots generally, one loses less for cheap slots vs. your mid-priced slots. And ARod again beats whoever he's up against in his slot. It's not just about stats for money, it's about stats per slot for the money, too. And that makes the game more complex.

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