When Buying Low and Selling High Could Work

On Saturday, I discussed a strategy that is rarely talked about, as on the surface, it sounds foolish. I suggested considering actually trying to buy high and sell low. I argued that buying low and selling high has become much more difficult to accomplish in recent years in this age of so much great statistical analysis that is freely available. As a result, the buy high, sell low, trade is much easier to pull off, and if executed carefully, could still pay off. However, the traditional buy low, sell high trade could still be made. Here are several scenarios in which I think this type of trade has the best chance of being pulled off.

The hyped rookie: Brandon Belt would be a good example if he starts the first couple of weeks real slowly or sizzling hot. Rookies can quickly make their owners change their opinions of them and if you drafted any, you might soon question whether you were correct about the player. We all know how risky rookies are, so a slow starting one could lose his owner’s confidence quite quickly. A fast starting one could become one of the most sought after players in your league. Remember Jason Heyward’s start last season? He was almost elected into the Hall of Fame already! He would have been an easy sell high. Keep in mind, however, that these examples are for non-keeper leagues only. Obviously the added wrinkle of keepers and salaries change everything.

Everyone’s favorite sleeper: Brandon Morrow is an example of the sleeper that wasn’t this draft season. In fact, he went for $9 in my relatively shallow 12-team mixed league. That ain’t no sleeper! If this type of player gets off to a slow start, it would be reasonable to believe his owner would quickly think he was wrong and be willing to sell him low. Remember, a sleeper is usually someone expected to perform much better than he has in the past, so it is difficult to continuing maintaining your confidence that this sleeper will awake at some point. A hot starting sleeper should attract your league mates as everyone probably had read all about this so-called sleeper’s breakout potential all off-season. As a result, it would be easy to believe that the player truly is in the midst of a breakout season, which could allow his owner to sell high if he so chooses.

Player coming off a career/disappointing year the previous season: Jose Bautista and Carlos Lee are good examples of a player coming off a career year and a disappointing one. If Bautista got off to a slow start, his owner may quickly panic that last year was indeed a fluke, and an opportunity to consider buying low would present itself. Similarly, if Carlos Lee starts off slowly, his owner might start to believe that maybe last season was the beginning of a decline, allowing you to swoop on in and acquire him cheaply.

What I have learned when trying to buy low or sell high is that there must be a story about the player that the owner could conceivably think when considering whether to accept your offer. If you cannot figure out any possible reason for your potential trading partner to want to consider selling his player low, then it is unlikely he does.

One of the scenarios it seems nearly impossible to pull off a buy low, sell high trade now is the established veteran off to a slow start or the pitcher with a low ERA, but mediocre peripherals. No more panicky owners after Mark Teixeira has yet another slow April (not this year so far, though), as he will simply appear on every buy low list that his owners are reading too. For the quick starting pitcher with the artificially low ERA, more and more owners have become adept at understanding the various ERA estimators and learning to look beneath the surface past just ERA. As a result, it has become extremely hard to sell these players high, especially when they don’t carry much name value.