March 23, 2017
Auction Prep: Auction Podcast Takeaways
Earlier this week, George and Mike from the Flags Fly Forever podcast were kind enough to have me on to discuss auction strategy and the decision-making process. When I write my articles from my typing cove (really, my apartment’s kitchenette), I do not get to bounce ideas off of people in real time or get to listen to the in-depth thoughts of others on auction strategy like I did when on the podcast. Consequently, the podcast (which you can listen to here) helped clarify and even bring to light some new beliefs and ideas that I believe will help us in our quest to improve our auction strategies, strategic process, and decision-making as we endeavor to chase flags that will fly forever. Again, I would highly recommend listening to the podcast, but additionally, I have recapped and expanded on some of the ideas and recommendations discussed—advice that I am going to be trying to heed come my final auction preparation this week and come my two auctions this weekend
1. Always prepare and analyze with opportunity cost in mind
During the podcast, when discussing preparation, Mike, George, and I all discussed the importance of putting together a complete list of bid limits for the player pool we will face because it is ultimately the best way to take advantage of misevaluations by the market (your leaguemates, your competition). Mike made an important point about doing so, in which he mentioned that if you are using someone else’s valuations to do your bid limits (for example, I use Mike’s auction values), that you should make sure to adjust them accordingly to your own beliefs about particular players and to differences in league format.
While adjusting for league format is critical, the advice I can give in that regard really stops there—we should all be adjusting for league format (differences could include, but are not limited to, bench spots, inning limits, number of players starting, number of teams in the league, keepers, inflations due to keepers). As for adjusting for individual players, I find the common mistake we make is pumping a player that we believe is undervalued or decreasing a player we are scared of or believe is overvalued, without performing the same analysis for other players. Sometimes we take a deeper dive on a player and find that they really are undervalued (we come to believe their ceiling has a higher probability than the industry does, something like that), but often, at least for me, when I go to make an adjustment on a player, I find I could probably make the case for many other players. Once I get to this point, I usually find that my hunch is personal bias; less frequently, I find that there is a trend difference between Mike’s valuations and mine (for example, I tend to value traditional, slugging first basemen a dollar or so less than Mike, while valuing balanced, from a roto-production stand point, outfielders slightly more).
To conclude, changes in context (injuries, demotions, etc.) certainly often warrant significant changes in our valuations for individual players; however, hunches, analyses, spring training performances, are more likely to cause us to make unwarranted significant changes to our valuations for individual players. And, when they are warranted, they are probably warranted for an entire set of players.
2. Come the auction, trust your preparation more than your gut
We spoke about the pressures of the auction a lot during this podcast. Whether it is the fear of the unknown, the uncertainty inherent in an auction’s extreme complexity, or the fear of messing up in front of our peers, the pressures of the auction adds a layer of difficulty on top of an already difficult task. It is easy to spend a couple extra bucks above our price to ensure that we get a top tier player or that our team begins to look how we thought it would look, but doing so is only going to hurt our chances at winning—there was a reason that player’s price was what it was and not the two dollars more that you just spent.
In my opinion, experience is the best way to alleviate these anxieties that get in the way of good decision-making, but we do not all have that luxury. Instead, remind yourself how auctions work at their core—every dollar spent on one player, cannot be spent on another. So as long as the bid limits you’ve prepared add up correctly, do not be scared to wait while the room overspends and, conversely, do not be scared to spend early if everyone is hoping for values down the road.
3. Every player has a price
At some point during the podcast we began discussing nominating players we want versus players we do not want. In fantasy drafts and auctions, we are not picking a group of friends with whom we would like to go to brunch; “want and do not want,” “like and do not like” do not matter here. If a player is not good, then we should have a low auction value on that player or not have them in our player pool. If we want a player, then we should make sure our bid limit for that player reflects how much we want that player.
This is why I recommend that we review our bid limits before our auction (ideally several days before our auctions) and with each player ask (i) “would I be upset if someone else got this player for a dollar more?” and (ii) “would I be upset if I got this player for the bid limit on the player?” If we answer “yes” to either question, then we should analyze (or re-analyze) why we feel that way and either conclude to leave the bid limit as is (maybe we were overvaluing the player because of some decision making bias) or adjust the bid limit according to the results of our analysis (maybe we were too high or low on a player because of some decision making bias or maybe contextual factors changed). In doing so, we will be both more prepared and more confident in our bid limits, which will make us less likely to make strategic mistakes come the auction.
4. The plan is often to take advantage of the plans of our competition
All of the obstacles faced in the above pieces advice are also going to be faced by our competition and my strategy—as someone who does not have enough (or any) skill in player evaluation to differentiate through projection—is to hope that I can do a better job of staying focused on value, on giving my team the best possible odds, by (i) overcoming these obstacles and (ii) taking advantage when my leaguemates do not. The best part about this is that it requires little skill, just a lot of preparation and focus on process. People are overconfident about their own future and their own abilities and, consequently, often do not feel that this effort is required—they will simply devise a better strategy or pick better players than their competition. The issue with this is that is what everyone thinks and our thoughts are not as original as we think they are, which makes our strategies and sleeper picks more likely to be the strategies and sleeper picks of our leaguemates, which makes them less ingenious and less effective. Because of this, they will make mistakes and will be less likely to take advantage of the mistakes made by others. And this is where we can make our money; some years our leaguemates will do a better job than others, but they will never be perfect, and we will strive to build a team that takes advantage of those mistakes as often as possible.
Also, stay hydrated and good luck.