Parallels between investing and fantasy football?

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HEDGEFUNDIE
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Parallels between investing and fantasy football?

Post by HEDGEFUNDIE » Sun Sep 16, 2018 10:19 am

Trying to convert the players in my FF league into Bogleheads. What lessons can be drawn from both?

Here’s one: there’s a reason you drafted that guy, stay the course! 🏈

DownToThis
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Re: Parallels between investing and fantasy football?

Post by DownToThis » Sun Sep 16, 2018 10:31 am

Ha I've actually been thinking about this as the FF season is getting underway

1) the more I "actively" manage my team I don't think I actually do any better
2) most of the fantasy advice people don't outperform and are wrong about their "picks"
3) it's really hard (IMO) to know what's going to happen (who picked ryan Fitzpatrick last week? And if they did what are the chances they'll pick the next breakout this week? )

I'm sure there are a lot more parallels.

HEDGEFUNDIE
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Re: Parallels between investing and fantasy football?

Post by HEDGEFUNDIE » Sun Sep 16, 2018 10:35 am

DownToThis wrote:
Sun Sep 16, 2018 10:31 am
Ha I've actually been thinking about this as the FF season is getting underway

1) the more I "actively" manage my team I don't think I actually do any better
2) most of the fantasy advice people don't outperform and are wrong about their "picks"
3) it's really hard (IMO) to know what's going to happen (who picked ryan Fitzpatrick last week? And if they did what are the chances they'll pick the next breakout this week? )

I'm sure there are a lot more parallels.
I actually wonder, on average how often would a completely auto-drafted team (with a simple algorithm to pick up substitutes for injured players) beat “actively managed” teams?

Railroader
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Re: Parallels between investing and fantasy football?

Post by Railroader » Sun Sep 16, 2018 10:46 am

Pre draft rankIngs are like the efficient market hypotheses. Their prices(where you pick them) fully reflect all available information.

They key to doing well in a ff league is finding inefficiencies (sleepers).

bigred77
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Re: Parallels between investing and fantasy football?

Post by bigred77 » Sun Sep 16, 2018 10:54 am

In a normal fantasy league, you have 10 - 16 participants. Probably 25% are REALLY into fantasy football and 25% are casual football fans.

That does not make for an efficient market. You can generate alpha by being the first to act on new information (injury news), by executing lopsided trades with the casual fans (usually trading big name player X whose on his last legs for unknown name player Y is on the upswing), or by churning the bottom of your roster to interchange replacement level players who happen to have the most advantageous weekly matchup.

IMO, active management is preferable in fantasy football.

dknightd
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Re: Parallels between investing and fantasy football?

Post by dknightd » Sun Sep 16, 2018 11:03 am

They are both fantasy. You can not predict what your returns might be, and you can not predict how your fantasy team will perform. You can try, and sometimes you might be right, and sometimes you might be wrong.
In real football I can be pretty sure that on average, the return is zero. For every team that wins, there has to be a team that losses. If they charge you to play, the average return is less than zero. The people who run the game have to get their cut ;)
Last edited by dknightd on Sun Sep 16, 2018 11:17 am, edited 1 time in total.

Bulgogi Head
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Re: Parallels between investing and fantasy football?

Post by Bulgogi Head » Sun Sep 16, 2018 11:16 am

I’m not sure if this is particularly bogleheadish but I think for a good FF team you need your sure things, your studs that you draft in the first few rounds that will steadily produce each week. Could this be the usual 3 fund?

Then, you need your lottery tickets that have potential to win you your league if they blow up. This part would probably not appeal to a boglehead.

lernd
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Re: Parallels between investing and fantasy football?

Post by lernd » Sun Sep 16, 2018 11:16 am

Prior performance doesn't necessarily indicate future "returns" (performance).

Wm_o_o_o
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Re: Parallels between investing and fantasy football?

Post by Wm_o_o_o » Sun Sep 16, 2018 11:18 am

bigred77 wrote:
Sun Sep 16, 2018 10:54 am
IMO, active management is preferable in fantasy football.
Active management is heresy in these parts :)

runner3081
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Re: Parallels between investing and fantasy football?

Post by runner3081 » Sun Sep 16, 2018 11:46 am

HEDGEFUNDIE wrote:
Sun Sep 16, 2018 10:19 am
Trying to convert the players in my FF league into Bogleheads. What lessons can be drawn from both?

Here’s one: there’s a reason you drafted that guy, stay the course! 🏈
It saves time and money to not actively get involved with either.

Buy index funds in stead of individual stocks and don't play FF

HEDGEFUNDIE
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Joined: Sun Oct 22, 2017 2:06 pm

Re: Parallels between investing and fantasy football?

Post by HEDGEFUNDIE » Sun Sep 16, 2018 12:03 pm

runner3081 wrote:
Sun Sep 16, 2018 11:46 am
HEDGEFUNDIE wrote:
Sun Sep 16, 2018 10:19 am
Trying to convert the players in my FF league into Bogleheads. What lessons can be drawn from both?

Here’s one: there’s a reason you drafted that guy, stay the course! 🏈
It saves time and money to not actively get involved with either.

Buy index funds in stead of individual stocks and don't play FF
Possibly the most Bogleheadish answer ever!

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Kenkat
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Location: Cincinnati, OH

Re: Parallels between investing and fantasy football?

Post by Kenkat » Sun Sep 16, 2018 12:11 pm

HEDGEFUNDIE wrote:
Sun Sep 16, 2018 10:35 am
DownToThis wrote:
Sun Sep 16, 2018 10:31 am
Ha I've actually been thinking about this as the FF season is getting underway

1) the more I "actively" manage my team I don't think I actually do any better
2) most of the fantasy advice people don't outperform and are wrong about their "picks"
3) it's really hard (IMO) to know what's going to happen (who picked ryan Fitzpatrick last week? And if they did what are the chances they'll pick the next breakout this week? )

I'm sure there are a lot more parallels.
I actually wonder, on average how often would a completely auto-drafted team (with a simple algorithm to pick up substitutes for injured players) beat “actively managed” teams?
We had a person drop out of our league last minute a couple of years ago. Me and another owner were going to start a team and use this exact strategy - i.e., auto-draft, play the lineup based on weekly rankings, etc. The speculation was i bet this team did well; however, we found another owner and so the experiment never came to fruition.

One other parallel that I would draw - in the old, pre-internet days, there was much much less information available. We did scoring by hand from the newspaper and poured over Thursday’s paper to get the injury report for the week. Once ESPN became popular, you would watch NFL Primetime to see how you did. For the draft, you’d buy a magazine printed in July with rankings; I used to get copies of Pro Football Weekly to try to figure out, for example, who’s gonna start at Running Back for the 49ers this year - oh, there’s this rookie Ricky Waters who is getting lots of carries. Draft him. There’s this guy for the Cowboys Michael Irvin that got hurt last year but has looked good in pre-season. Take a flier on him. Now, all information is instantly available. It is much harder to find an edge. Kinda like the stock market.

Shallowpockets
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Re: Parallels between investing and fantasy football?

Post by Shallowpockets » Sun Sep 16, 2018 12:38 pm

Sounds like sports trumps money. For most people. They would not do the most basic of research usually from non interest, but will memorize, examine, speculate on fantasy football and baseball, endlessly. You can do both, but those who don't approach their money the same way they do their fantasy are the ones sitting in front of the TV in their later years with their chips and salsa paying their exorbitant cable bill from their SS.
I guess I just don't understand it.
Jim Cramer once mentioned that if you could do the work for fantasy football, you could do the same work for your investments with a greater understanding and reward.

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Portfolio7
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Re: Parallels between investing and fantasy football?

Post by Portfolio7 » Sun Sep 16, 2018 1:08 pm

I used to play fantasy baseball... and there are a lot of parallels.

If you think of your team as a portfolio of funds, and your star clean-up batter like the S&P500, with a long history of strong performance... he might start the season so slow, you wonder what the problem is. You consider subbing him out for a while, but past glories convince you it's better to stick with him. Another few weeks into the season, your team is lagging, and your star hitter is still hitting below his weight. Now, your bonds (your pitching, say) are doing great, and keeping you in the middle of the pack, so your team (portfolio) is actually pretty close to average, but that star hitter's performance keeps nagging at you, you feel like it's keeping you down(!) This is the allure of 'beating the market'; rather than accept the ups and downs of your teams performance, you want to start tweaking it to maximize performance. Two weeks later, you lose patience and pull your star for a guy who started the season hot. The replacement guy suddenly cools off and goes 1 for 20 that week, while your star hitter turns in a monster performance, hitting .600 with 15 hits including 6 homers and 25 RBIs. Had you held the course for one more week, you'd have vaulted to second place and be chewing on the leader's heals, but instead you're now almost in last place. You bought high and sold low.

Skills analysis now focuses on concepts like a player's intrinsic skill, trying to strip out the luck component of their performance. This can help you ID when a player has just been unlucky. From an asset class perspective, acknowledging there are legitimate economic issues EM countries are facing, I suspect EM has been 'unlucky' over the past 6 months or so (but a long string of bad luck can wear down a player or an asset class to the point they don't ever really bounce back... and, as always when talking BB/FB players or asset classes, I could be wrong.)

One key difference between fantasy sports and investing is that you can't pick a three-fund portfolio in FF or FB. It's a slice and dice portfolio almost by definition, and there are also parallels to stock picking.
An investment in knowledge pays the best interest.

Dakotah
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Re: Parallels between investing and fantasy football?

Post by Dakotah » Sun Sep 16, 2018 8:32 pm

I think there's some psychological similarities. A couple of examples come to mind...

When a FFB player or investor is filled with fear (Bear market...or best player got injured/off to an 0-2 start), they make emotion-driven decisions. They have to do SOMETHING. As a fellow FFB player...you should look to take advantage of that.

Some investors and FFB players over-value their "home" assets. Many investors overweight their domestic equities...and FFB players over-weight players from their favorite team. They will often pay a premium to align their fantasy-interests with their real-football interests. Take advantage of that.

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