Give Me The Rock
this is fantasy basketball
Nels and mabeuf like to make fantasy basketball analogies to Jessica Biel and Svetlana Shusterman, I make mine to the stock market. You are warned.
In 1998, Brad Barber and Terrance Odean published an article titled “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors.” Barber and Odean looked at the common stock performance of over 66,000 households from 1991 to 1996 and found that those who traded the most actually had the lowest annual return on their portfolio (11.4% versus 17.9% for the overall market). They attributed this phenomenon to behavioral bias: “People are overconfident, and overconfidence leads to too much trading.”
They identified the overabundance of information as one of the largest drivers of overconfidence. With the proliferation of both professional and amateur “experts” on television, radio, and the Internet, the amount of information we have access to has grown exponentially over the past decade. This wealth of information breeds confidence, when in fact, we’re often leading ourselves in the opposite direction. From an article on CNN Money.com:
“Your confidence goes up as you get a lot of information. But your accuracy doesn’t,” Barber said. Extra data hurts you if you misinterpret it, he said. “It’s an enticement to trade because you feel like you have better information. … What people don’t realize is that everybody else on the planet has access to this information. What you have to ask yourself is, do you have superior ability than everybody else in the world in evaluating this information?” Barber said.
While this was in reference to the stock market, they could have been just as easily been talking about anything else, including fantasy basketball. People have access to greater amounts of basketball-related information every day, primarily through the Internet (yes, even us small-time blogs contribute to the backlog of information from time to time). You can go right now and get a dozen different opinions on who to pick up, who to drop, who to trade and who to trade for. The problem is that many of these opinions contradict each other and, unless you happen to work in some capacity for the NBA, everyone else has access to the exact same information as you.
And does all this information really help improve your league performance? I’m not about to launch a 5 year study to find out, but here is a cursory glance at a competitive fantasy league:
At least in this one competitive league, the amount of roster moves a team makes appears to have no effect on overall team performance. If I had access to more people’s fantasy leagues, maybe I’d do a more comprehensive study, but until people start sending me their league passwords, all I have to offer you is a single anecdotal look.
So, if I’m arguing that roster movement is not the key to fantasy basketball success, what is? Much like investing, the first step is to start focusing on the long-term rather than the short. Take a look at NBA.com’s fantasy section, and you’ll be bombarded with information on who to add, who to drop, and who to trade for RIGHT NOW. It’s all very tempting, backed up with crazy trending stats to add to its credibility. But not only does everyone in the world have access to this information, more often then not, you’ll be buying at the highest point on a player. Instead of following that cycle, look at the Motley Fool’s advice on maximizing your investing wealth:
If you’re seeking long-term wealth from the market, then break the industry mold and live by two rules:
1. Buy great companies.
2. Be patient.
Those same two rules apply to fantasy basketball: acquire great players and be patient. Obviously, that easier said than done (as we’d all be millionaires with crazy good fantasy basketball teams), but there are basic methods and tools available to give you an advantage. The first is to understand your league type, rules, and scoring system. It is impossible to invest in good players if you don’t understand the rules that define what a good player is. The second is to find a good player rater system – one that matches your league setup and scoring categories. If your league counts turnovers, make sure you find one that accounts for turnovers. It’s better to have no information than inaccurate information. Third, be patient. Don’t drop someone after the first week of the season, don’t trade for guys at their peak value, and avoid picking up free agents just because they went off the previous night, unless there is some specific reason to believe their performance is repeatable. Patience, I believe, is the toughest part of the equation for investors and fantasy basketball owners alike.
Fantasy sports in general are all about entertainment first (and cash prizes second, possibly), so I can understand the why people like to trade and shuffle around their teams. I’m on board with that idea and I do it myself. I like the idea of running my own basketball team and trading helps to make me feel that I’m in control of it. My point is that 1) there is such a thing as too much information, where you begin to over think yourself and shuffle guys on and off your team with the intensity of Isiah Thomas on crack, and 2) the key to winning fantasy basketball isn’t being the first guy in your league to jump on free agents, but to identify the best players and ride them for the long haul. And as much as I like to have fun, I like to win even more.
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