Sunday, February 17, 2008

Basic Strategy vs Investing Strategy

After a very busy couple of weeks with work, it felt so good to be able to sit down and really start preparing for my most competitive draft in a few weeks. Every single person in the draft has a different strategy and then also has a strategy to counter everyone else's strategy. Today, I'm going to discuss the strategy that I have found to work best, both in real life and in fantasy sports.

I'm here to talk about a draft prep strategy based on stock investing. Now, yes everyone has an opinion on stock investment strategy but this one minimizes losses while maximizing profits. This involves 3 main points:

  1. The most well known and talked about stocks often only produce minimal to moderate gains with a high degree of risk.
  2. Small cap stocks (under $100 million) are too speculative to base your portfolio on.
  3. The best value and where the best profits with minimal risk are in the $100 -400 million range.
You might think that this a common sense approach but let me apply it to fantasy baseball (which is why you're here).
  1. The most well known players will be drafted in the first 3-4 rounds and will only produce what is expected for minimal gains, but if someone becomes hurt or is unproductive, you're season is most likely in trouble.
  2. If you try to base you're strategy on speculative sleepers, your portfolio will have too many holes to plug during the season.
  3. The mid-range players (round 5-15 or $30-$10) represent the best value and where you can maximize your draft. The players you select here can give you stats a lot worth a lot more than what you pay for. A 7th rounder can give you 3rd round stats.
Thus when you do your draft prep, don't try to spend so much time on the "best sleepers" or the "best overall players". Focus on those players that are going to fall in the middle, the ones that can give you supreme value for minimal risk.