The "Learned Minority" and Value

In response to my last column, the most frequent question I have been asked is whether I am merely saying that we cannot judge whether we have gotten value at the time of the auction. Yes I am saying that, but on a deeper level what I am saying is that the basic paradigm by which players are obtained is flawed especially at the top of the auction pyramid where players are not fungible.

At the top of the auction pyramid where the top talent lies the concept of value has to basically go out the window in keeper leagues where inflation is often rampant. If you are hoping to get a Jose Reyes or Jimmy Rollins type player for under $30 so that they have value then you have little chance of getting the top talent necessary to win in tough leagues.

Anyone who has been in an auction has experienced this common scenario: you have a guy projected at $20. Bidding starts and reaches $20. You drop out and someone gets him for $24. That player goes on to produce a $35 season. Every year there are a few of these guys. Often owners who don't think about such things consider that the successfully bidding owner was just lucky. Perhaps he was but perhaps he knows a lot more than he is given credit for. Evaluation of your adversary is always to be considered.

Question: (and I apologize for channeling Dwight Schrute for a second) why did you drop out of the bidding? Invariably the answer is that the player wasn't a good value at that price. Most times that may be true and in the long run it will be true; namely if I take a group of 100 players all of whom are valued at $20 and pay $24 I will probably show a loss, assuming my projections are good.

But every so often you feel like you have inside information or see something that others do not. Often this might be using a regression to the mean approach for BABIP or hit rate or some other solid information that you have. In this regard you may be a "learned minority." I have discussed at length my trade of Stephen Drew or the fact that two expert owners went head-to-head in a bidding war for Tom Gorzelanny this year, with the other owners denouncing them as crazy (and these two owners finished one-two this year).