March 22, 1998

[Special thanks to Victor Davis, who submitted this highly provocative and entertaining essay on alternative draft strategies. I've taken the liberty of interspersing some of my comments in footnotes - it's my site, after all, so I can interrupt when I want to! I've also added links to all footnotes, so you can easily navigate back and forth without getting lost.]

My underlying motivations for analyzing draft strategies in writing are

1. to clarify my own thinking,
2. to look for "the perfect" draft,
3. to try to get some feedback from other SW managers, and
4. to take a step backward from some of the things I've written (as feedback items) so far in order to put things into their proper perspective and to reanalyze some of the basic concepts.

I'll present two opposing yet valid (I think) views - one by "Robert Reich" who is concerned primarily with player productivity, and the second by "Gordon Gecko" who wants $$$$ first, and will get his points later (a.k.a., the Baseball version of the Talaxians).

Robert Reich:
Your job as SW manager is to accumulate the highest SW point total possible. Therefore, given your constraints, you should draft the best 14 players to accomplish that goal. To do this, you need to focus on "value" - the highest number of SW points per $$$$, and the highest number of SW points in each position.

First, some basics concerning roto-league production evaluation (this is applicable to a large number of roto-games). You are almost always simultaneously operating under a budget constraint, as well as roster constraints. The first has obvious implications: the budget constraint means that you want to get the most Points/$$$$ possible. The roster constraints mean that you want to get the highest Points/player. These two constraints often conflict with one another. For example, Greg Myers produces a ratio of 5,520 SWP₉₇/SW$$₉₈, but Piazza uses the roster slot much more effectively by producing 2,269 more SWPoints in total. Intuitively, therefore, a "value" player is not just one who has a high Point/$$$$ ratio, but rather a "value" player is one with high levels of productivity at very affordable prices. The difficulty is in choosing who these players are. (Note: this same logic is why you should "over-pay" for a Piazza, who is likely to be much more valuable than any other catcher, and why all the top 50 SW Hoops teams are "over-paying" for their All-Star rosters - the absolute level of points is often critical). Note that Smallworld has basically equalized the Point/$$$$ ratios for all players, but has ignored the value of a roster space component. We'll use this to our advantage.

With all of these elements in mind, here's how you should build your roster:

1. Project yearly SWPoints for all players (or at least have some idea of 1998 point totals in mind). From now on, when I refer to Points, I'll refer to these calculated projections (unless otherwise noted).
2. For those positions with clear-cut All-Stars who produce much better than anyone else, buy the All-Stars. Eventually, everyone in the game will have to buy these players; lock them in now, while they're cheap. This is a win-win.
3. Some players will have such a large Point/$$$$ amounts that you just can't ignore them - gobble these players up as long as their TOTAL point production is somewhat reasonable. Depending on how much money you spent in 2), you may want to focus on very cheap players (<$1 mill) with high Point/$$$ amounts, or you may be able to still afford several mid-range guys (1-3 mil), likely with slightly lower Point/$$$ but higher point totals. Always keep in mind that you need a TOTAL amount of points, so don't just maximize the ratio.
4. Experiment around a little; finding the right balance between Pts/$$$ and level of Pts. is a difficult task - just ask those people who turned-in the various Dream-Team rosters for Hoops. You could program a large optimization routine, but that would take the fun out of it.
5. During the Season: Pace your trading activity. If you've drafted well, all of your players are undervalued and/or are All-Stars. Let the market come to you; theoretically, no one should be able to out-produce your team (you may need to drop a very cold player, or an injured one), so be patient. After 2-3 weeks of letting your players values increase (assuming weekly price changes are capped), consider taking a profit. When looking for your next buy, however, always keep a 2-3 week future horizon in mind. To get the really large monetary gains, you're going to need to hold a good player for multiple weeks. The Guru just wrote about the value of a trade in Hoops - it was greater than 1.5 million. In baseball, to achieve commensurate gains requires holding a player for a minimum of 7 days. Therefore, the real money will be made by managers who choose players who are being productive; these managers can get two or three consecutive price increases in a row out of their players, while not losing production. Eventually, the money will come around, and your team will be unbeatable.

Therefore, Gecko, you've got to plan on keeping players longer than one price change. This means you've got to pursue step 5), just like I do. Therefore, who's going to win is going to be determined by who can accumulate the most POINTS with the least amount of money and a limited roster size, which is exactly what my strategy is designed to do.

Gordon Gecko's response:
My strategy is simple. Get as much money as possible as early as possible. Greed rules. Then, hope my players don't get hurt. Greed's ruled SW Sports so far, and as long as prices are allowed to change, $$$$ will rule Smallworld.

Why will I still win? Let's look at the changes they've made in their efforts to thwart the profit motive:

1. Increased the number of trades I can make,
2. Market prices are going to be at least partly based on "percentage ownership," and
3. Markets move once a week.

1. 75 trades spread over 14 roster slots means I can roll over my team 5.35 times. This is the highest turnover rate that they've allowed in any of their games to date.
2. In the past, player's prices have gotten stuck (see the various Price Fixing articles). This change is a sensible one, but it plays into my hands in two direct ways. First, the price of the All-Stars will most likely drop. I've done a 'random' sampling of the rosters of 30 teams. There are a number of top-quality players that just aren't being purchased. Therefore, a "blue-chip" player index may actually experience deflation! ² Secondly, there has been an implicit price ceiling for productive, cheap players. By removing this ceiling, you're just making my job easier! Therefore, when my good friend Robert suggests that I will only have 3 players with profit potential per week, I would suggest that he's dead wrong. If that figure is closer to 8, and with general price appreciation from my other 6 players, I can likely get $10 million per week, twice the return of the top teams in Hoops this past season. Therefore, I can have a roster value of $110m by mid-May; in addition, the $134 million it takes today to buy the elite team may be less than that by then. This team would, therefore, be well on its way to ruling SW.
3. You think I'm being optimistic about the number of players with large price changes? Then consider the fact that they've ALSO made prices change once per week. Whew-ee!! Just think how many more people would have purchased a player coming off the DL if prices would have been frozen for a day or two before and after his return? All those casual fans who might not see the pre-return hype, as well as all those who are risk-averse, and want to see how well they look before they jump on the bandwagon are going to be on-board, now. Remember how volatile the price of pitchers was last year in SW Baseball? Well, sometimes you didn't want to sell/buy immediately because your own starting pitcher had his turn coming up the next day, and you didn't want to lose a start. No problem anymore! Wait for your starter's turn, get his points, and then trade for the guy who threw the no-hitter or sell the guy that got shellacked. All of this means more trading activity, and more profit opportunities. So maybe I am wrong,..... maybe I can get the $134 million roster in less than 6 weeks...

Aside from that, however, there's no reason to be timid! While I admit we don't know for certain, this market looks to me like it's ripe for the taking.

Victor Davis again:
I hope that spurs some lively debate. At some point, I'd like to see a summary of what we really know vs. what we're speculating about. I've egregiously mixed the two up at times in the above comments, just to make the case. Possibly by mid-summer we'll have some good answers...

Here are some other observations and questions that arose from my survey of 30 teams (without revealing specific players with potential for profit - or extra risk (in the past??)).

1. Starting pitchers are favored to relief pitchers by an incredible majority The average roster held about 1/2 of one closer, and 4.5 starters. This was true last year in baseball as well. What in the world is going on? This has some incredible implications concerning the look of the market in a few weeks.
2. All teams except one had either an OF or 1B for a DH. Makes sense, but it has implications for player-drifting, among other issues.
3. Very few teams (3) had more than $1m in cash reserves. This didn't surprise me, but I think it's worth noting nonetheless. We actually ought to have a discussion (on the web) about the value of holding cash. It seems like it's related to the value of a trade (Hoop Pointer) - i.e., by having cash, you can save trades...
4. Almost all teams had one or two players worth $9m. Conversely, almost all teams had players worth less than $0.5m.

1. How should you maintain roster flexibility while making money?
2. What's the value or cost of cash?
3. Why does the market shun relief pitchers?
4. Does anyone have any good ideas about how to balance Pts/$$$ and total Points?
5. Is any of this wrong?
6. Extra: How distorted are the SW Scoring Rules? My hunch is that this benefits certain players in subtle ways that are not in line with my intuition. Is there a good way to take advantage of this?

Roto $$$$: Buy those players that are priced incorrectly according to the many roto valuation services. The main danger here is that most baseball roto games value each category separately; therefore, a good base-stealer who can't do anything else won't help your SW team as much as it would in other roto leagues. The good news is that you have some other people to blame if your players don't work out.

Super Stars: Buy as many super stars as you can, and use the remaining roster space for appreciation. The downside is that you have fewer roster slots to earn your money. The upside, however, is that you don't need to expend as many trades to get your 'ideal' team since you'll never have to touch Griffey, for example. Also, you're assured of some production during the initial phases of the game. The slower rate of $$$ accumulation may make this strategy less appealing, however.

Money, Money, Money: Draft only those players that you think your fellow SW managers are drafting. This is dangerous; in the past, SW has ignored the percentage of ownership, and this strategy can result in holding players that are going to be SOLD by a lot of players (ever heard of the Titanic?). This time, however, they're implying that they're going to base price changes partly on the percentage of ownership, so some research into your fellow managers' drafts may be warranted after all... Plan to make as many trades as possible in the first few weeks to earn $$$$.

Draft/Trade only for Production: In the past, this strategy was doomed for failure, since your roster would soon be dwarfed in value. With weekly price changes, however, you may have a chance. Basically, you have to hope you have the most productive 12 players for the money, and then hope everyone jumps on your bandwagon. Or be flexible and go for a limited price appreciation later.

Balanced Roster: Spend 1/3 of your money on pitchers, 2/3 on hitters. Take only reasonably priced players. In addition, if you want to pick up a rookie after the season starts, all you have to do is sell off a mid-ranged priced player and pick the cheap player up - you can get production from your money while still keeping it to spend.

Rookies: Draft only cheap players; they're the most undervalued and they have upward price potential. Just be sure to keep some cash around to get rid of those that don't pan out. Plus, you might need some SWPoints sometime.

NY/LA strategy: Initial prices are generally based on last year's production. There is likely to be an eventual premium for large-market players; therefore, the large-market players are more likely to be undervalued early in the season - get 'em while they're cheap and watch the $$$ roll in!

Good Pitch, No hit: Pitchers are notoriously unreliable. However, if you put a lot of money into them, you can buy the good ones that are less likely to cause trouble. Use your offense for price appreciation.

No Pitch, Good Hit: Give up on your pitchers because they're unreliable. Buy productive hitters, and use pitching for appreciation. The fact that there are 5 slots for one position here may help you with price appreciation; however, if you get stuck with a lot of negative point performances, you may be in trouble. Be sure to keep some cash around to maintain your roster flexibility when you need to drop one of those dead arms.

The best draft strategy is likely a mix of several of these strategies. However, it is important to keep your overall strategy in mind at all times, and now is the time to start drawing one up. In addition, your draft-day strategy should be contigent upon your regular season strategy - where are the strong positions, where and when are you going to get your $$$$, etc.