Previously, I have talked about the fallacy of reductionism and the vitality of value investing. I’ve also applied the ideas of reductionism and value investing to create actionable NBA Trends for the guard positions. Specifically, inexpensive point guards who are big underdogs and depreciated shooting guards who are still productive and playing substantial minutes are capable of adding strong value to any lineup. In this piece, I want to explore reductionism and value investing further to highlight another type of guard who can provide value: The Bad-Game, Ball-Hog Point Guard.
This is the 12th installment of The Labyrinthian, a series dedicated to exploring random fields of knowledge in order to give unordinary theoretical, philosophical, strategic, and/or often rambling guidance on daily fantasy sports. Consult the introductory piece to the series for further explanation.
Reductionism Redux
Reductionism (formally “The Fallacy of Division”) is the assumption that what is true of the whole must be true for the individual parts that make up the whole. If you assumed that one person could sing eight notes at the same time merely because that person is in a choir that can sing eight notes at the same time, then you would be committing the reductive fallacy.
In DFS, for instance, if one assumes that NBA players on a team that is a big underdog are necessarily poor plays, one would be making a reductive error. In fact, players on big underdogs tend to outperform their salary-adjusted expectations per our Plus/Minus metric. Just because a guy is playing in a suboptimal set of circumstances doesn’t mean that he is a suboptimal DFS play.
Value Investing Revisited
Value investing is the formal process of acquiring assets at a discount so that one has limited risk and perhaps even elevated profit potential. In the stock market, when someone invests in a company with a depreciated stock price but steady or enhanced production, one has employed a classic value investing tactic.
In DFS, if one applies this general strategy to find players whose salaries have decreased in the last year but whose performances have managed to meet their salary-adjusted expectations over that time frame, then one is acting like a value investor — and finding some great bargains in the process.
A Shipwreck is Just an Opportunity at the Bottom of the Ocean
In studying both reductionism and value investing, we learn that opportunities exist in situations that most people believe to be inopportune. Yesterday’s shipwreck is today’s bottom-of-the-ocean excavation in search of a rare diamond. (I just spent the last 20 minutes watching highlights of Titanic — sooooo not a waste of time.)
In NBA, the functional equivalent of a shipwreck is a game with a Vegas total of fewer than 200 points. I guess that “shipwreck” might be a little too strong to describe this type of game, but “car wreck” is probably accurate: it probably won’t kill you, but you want to avoid it.
The Bad-Game, Ball-Hog Point Guards
Is there opportunity to be found in these car wrecks presenting themselves as NBA contests? Are the players in these games something other than the horrible DFS options we would (reductively) believe them to be, given the low number of points we expect to be scored in the matchup?
It turns out that even if a player is competing in a markedly low-scoring contest, he historically does not underperform his salary-adjusted expectations. The contest in which he plays is relatively worse than he is. In fact, if you experiment with the trend for yourself, you’ll see that the lower the Vegas total is, the higher the Plus/Minus tends to be.
And just to be clear: I’m not saying that these players are actually good. Or that they’re actually scoring a respectable number of fantasy points. I’m simply saying that they are probably cheaper than they should be. For the most part, most of these players (relatively speaking) suck. It’s just that they are sucky players who happen to do well relative to their salaries.
And let’s explore this bad-game situation a little bit more: Is there a position with which the bulk of the opportunity resides? Yes. Unsurprisingly, the point guard position:
Does it make sense that point guards would outperform their teammates in these situations? I think so. Based on the Vegas totals, it’s very possible that point guards on the teams competing in these low-scoring games are playing with guys who simply aren’t all that great at basketball. Instead of passing to teammates, perhaps the point guards simply take a few more shots than they otherwise would. True, the point guards themselves might suck — but they’re still the ones deciding who gets to touch the ball when they’re on the court. Even if they suck, that fact might not prevent them from being Seinfeldian chuckers in these games.
The thing is that within this cohort of bad-game point guards, there are likely some really bad bottom-of-the-bench guys who don’t belong in lineups. To weed out this guys and enable us to narrow in on the point guards with potential, we can take a page out of the value investing playbook — similar to Silver Linings Playbook, except more than the linings is made of silver — and we can pay attention to what the experts are telling us.
In this case, there are two types of experts to heed, both of which have ideas for how players in any given slate are going to perform: the DFS platforms themselves and FantasyLabs. In setting salaries, platforms employ algorithms and over the long term there is correlation between how players perform and how they are priced. And in managing daily projections for players, Justin Phan projects the amount of minutes that players are likely to receive in a slate, and not only is Justin accurate, but the correlation between minutes played and points scored is quite strong.
So to avoid horrible players and to focus on the ball-hog point guards with potential, let’s screen for players with salaries between $4,000 and $9,000 and projected to play 20 to 40 minutes:
Also, I should say that if you adjust the salaries and projected minutes even more, you’ll find a smaller cohort that looks even more impressive:
That’s impressive. As weird as this is I actually might prefer the larger cohort, because there’s the possibility that the +3.10 Plus/Minus trend is overfitted, but if you prefer the group that clearly has the superior record of production I won’t argue with you.
The larger point is that if you avoid the reductive fallacy, look for opportunity in situations that most people, and leverage the information provided by professionals upon whom you can rely, then you can find players who not only provide value to lineups but also are likely to have decreased ownership percentages, i.e., the ideal tournament play.
Mining for Coal and Finding Diamonds
If you are willing to dig through coal, you actually can find diamonds. In the slate for today (Feb. 19, 2016), there are five point guards who fit the bad-game, ball-hog model:
A couple of these guys might even be decent cash game plays, but really you should be examining these players with a tournament mindset. With today’s big slate — the first full slate since the All-Star Break — rostering two or three of these players together gives one a high-percentage chance of creating unique tournament lineups.
If you look at some of these players and say to yourself, “I don’t know about these guys,” don’t listen. That’s the reductive part of you inclined to dislike players in unappealing contests. Instead, listen to the value investor inside of you who likes finding bargains in garbage bins. Listen to the budding statistician in you who enjoys the process of analyzing the numbers and discovering actionable patterns. And listen to the pros whose advice you trust.
Trust the trend.
———
The Labyrinthian: 2016, 10
If you have suggestions on material I should know about or even write about in a future Labyrinthian, please contact me via email, [email protected], or Twitter @MattFtheOracle.
