Beat the Shift Podcast – Market Premium Episode w/ Tristan Cockcroft

by
January 7, 2021

The market premium episode of the Beat the Shift Podcast – a baseball podcast for fantasy baseball players.

Guest: Tristan Cockcroft of ESPN

Strategy Section

  • How to use and adjust projections
    • What are the key adjustments that are most often made?
    • When should you diverge from projections?
    • How to adjust player rankings.
    • How to stress test playing time.

Market Premium Section

  • General Concept Introduction
  • Market Premium / Market Discount seen by position:
    • Closers (& Saves)
    • Starting Pitchers
    • Catchers
    • Middle Infielders
    • Corner Infielders
  • Market Premium / Market Discount seen by statistic:
    • Homeruns
    • Stolen Bases
  • Adalberto Mondesi

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Ariel is the 2019 FSWA Baseball Writer of the Year. Ariel is also the winner of the 2020 FSWA Baseball Article of the Year award. He is the creator of the ATC (Average Total Cost) Projection System. Ariel was ranked by FantasyPros as the #1 fantasy baseball expert in 2019. His ATC Projections were ranked as the #1 most accurate projection system over the past three years (2019-2021). Ariel also writes for CBS Sports, SportsLine, RotoBaller, and is the host of the Beat the Shift Podcast (@Beat_Shift_Pod). Ariel is a member of the inaugural Tout Wars Draft & Hold league, a member of the inaugural Mixed LABR Auction league and plays high stakes contests in the NFBC. Ariel is the 2020 Tout Wars Head to Head League Champion. Ariel Cohen is a fellow of the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA). He is a Vice President of Risk Management for a large international insurance and reinsurance company. Follow Ariel on Twitter at @ATCNY.

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Alex
4 years ago

Great episode. As your grandfather said, something is worth what someone is willing to pay for it. So I’m not clear how to draw the line between what is the “proper” price and what is the market’s premium? As in how do you calculate premium where the price is 100% market-driven? For example, let’s say I know based on AAV z-score calculations, the market pays 25 cents (not a real number) per steal. Assuming I’m not going to decide to punt steals, how do you calculate premium? Is the proper valuation 20 cents per steal so the premium is 20% or is it 15 cents per steal so a 67% premium?

2
Ariel CohenFanGraphs Staff
4 years ago
Reply to  Alex

Thank you!

When doing the z-score calculations … see what SBs go for. Then compare it to what the market pays in drafts/auctions. That excess is the market premium.

Its what the market is paying above what the intrinsic value should be. The market pays this because of demands of certain player types, even if the values show they don’t have to.

I’m saying to think of fantasy baseball like a marketplace. Economics. A lot of what goes on can be explained this way.

So if SB are 25% higher, you can know to pay some of it – pay 15% not 25%, and you are still okay. Buy a gold piece, but a nicely priced gold piece. etc.

Hope I am explaining this alright. I should really do a long form written piece.

2
Alex
4 years ago
Reply to  Ariel Cohen

You are good. I understand now. I had assumed the $-to-z-score factor was equal to “what someone is willing to pay for it”. It can be the midpoint (not necessarily the linear midpoint) of “what others are willing for pay for it” and what “you are willing to pay for it”.
Thanks

1
Ariel CohenFanGraphs Staff
4 years ago
Reply to  Alex

Right, right. I’m trying to put forth the mindset of “what is expensive?” The ability to recognize where you are in the draft or auction.

2