Sometimes hopping into your first cash market can be intimidating, so here at Jock Talk we’re going to be breaking down a few basic concepts to get all you new traders on your feet. In our previous strategy series post, we went over competitive advantages to use in the market including home runs. For this one, we are going to take a look at other fantasy point categories as well as some IPO and ROI data to see if we can find any telltale signs of a Jock MKT stud. To familiarize yourself with Jock MKT scoring, take a look at how MLB scoring works here.
Percent of Fantasy Points by Category
Let’s start by simply looking at which stats make up what % of the total fantasy points scored by players in the MLB. So which of these stats are most important when looking into profitability?
HR and K % Of Fantasy Points vs ROI
Looking at the data across all IPO price ranges, it doesn’t appear as if much correlation exists between the % of fantasy points that come from Home Runs and a high ROI. So, is this contradictory to our last article where we talked about the importance of home runs per at bat? Well, actually no and the reason for this is Jock MKT’s fantasy scoring. In Jock MKT, home runs by themselves are only worth 4 points which are a mere 1.5 points more than a single. Where the big bucks come from is what comes with a home run: runs and RBIs, each themselves worth 2 points. A leadoff single is worth 2.5 points, a leadoff home run is worth 8 points and a grand slam is worth a massive 16 points. That’s why hitting home runs (and doing it in clutch situations especially) is very important to Jock MKT performance, but the % of fantasy points that comes from home runs aren’t as important. So the obvious question is: what stat IS important?
To answer this question, we first have to answer another question. Ready for your pop quiz? What is the only outcome of an at-bat that results in negative Jock MKT fantasy points? Time’s up! The answer would be strikeouts, and that brutal -1 points outweighs your 0.5 point at bat bonus for a total of -0.5 points. This makes strikeouts VERY painful. Let’s say a player you invested in went 1-5 last night with a double, an RBI and no strikeouts. This results in 7.5 fantasy points (2.5 for the at-bats, 3 for the double, 2 for the RBIs), which would have placed this player in the top 30 in last night’s market. That’s a payout of $6.00, and likely a profitable investment. But what if those 4 times your player didn’t get a hit they struck out? Well, thats a mere 3.5 fantasy points which would have placed him around 60th place in last night’s market with a payout of $2 and your chances of profit are suddenly looking awful slim. To find players with a good chance of turning a profit, look to those with the best plate discipline and watch the profits roll in.
Aside from fantasy points, what else is helpful for a savvy Jock MKT player to make informed decisions about who to invest in on a nightly basis?
Std Deviation of Payouts vs ROI
Looking at the standard deviation of payouts, we find the tightest correlation to ROI so far. Baseball is different than other sports because of the sheer volume of games where good players will play bad. Unlike in basketball, where Luka Doncic had won 9 of his first 10 cash markets in May or in football where Patrick Mahomes is making defenses look silly on a weekly basis, baseball players simply won’t put up good stats every night. Standard deviation, or “a measure of how dispersed the data is in relation to the mean”, can tell us which players are most capable of popping for big points in a given market. Pouncing on players in the $3-$4 range who are capable of scoring enough points to return an investor $10, $15, or even $25 at the end of the market is so valuable because of the sheer upside these types of players provide.
If an investor buys a share of a $4 player every day for a week, and that player finishes at the worst possible $1 per share value 6/7 day and wins the market on the 7th day, an investor has actually made money. On days 1-6 they will have lost a total of $18 ($1-$4 * 6 = -18) and on the final day they will have won $21 ($25-4 = $21). That’s a total profit of $3 and an ROI of 11%. Using standard deviation to identify players with market winning potential should be a tool in the arsenal of every data inclined Jock MKT investor.
Let’s put some analysis into practical use and look at a player who’s had a massive come-up the last couple weeks: Trevor Story.
Trevor Story Cumulative ROI and Running Average IPO Price by Date
Putting fantasy points aside, we can identify trends simply using the running average IPO price and the cumulative ROI of players. Story was laboring for the first month of the season, unable to get anything going with his bat. Investors kept believing that Story was due to break out of his slump and despite his struggles drove his average IPO price up near $4.5 despite Story sitting on a ghastly 0.545 OPS, 0 home runs, and a cumulative ROI of -30% on May 8th. 3 days later on May 11th, Story showed signs of an impending eruption with his first home run of the year and on May 16th, the floodgates opened. From the 16th to the 25th, Story mashed 8 home runs, 22 RBI’s and is nearly at the breakeven point on the year in terms of ROI. Yet, despite all this, his IPO price remained stable at $4.5 from 5/6 to 5/25! Investors were driving the price of Story up more before he broke out of the slump rather than while he was going nuclear. Using IPO and ROI data to help make decisions on when to add a new player to your portfolio is a major key of successful Jock MKT investing.