Jock Talk: Competitive Advantage

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 how one could utilize IPO price to help make more informed decisions in which players to target. For this one, we are going to dive a little bit deeper and look into some other stats that could help you improve your MLB strategy

Graph of MLB players ROI in Jock MKT vs Home Run Rate

Home runs are a powerful weapon in a fantasy baseball players arsenal. The base value of a home run in Jock MKT is 8.5 points + 2 points for every extra player on base. That’s 5.5 points, or 1.8x more valuable than a single. Above is every player with at least 50 at bats this season plotted by home run rate vs weighted ROI (which is the sum of all their payouts – sum of all their IPO price divided by the sum of their IPO price) grouped by average IPO price. Hey look, there’s our old friend Taylor Ward!

So what does this chart tell us? Labeled are all MLB hitters with a home run rate of at least 7% or a weighted ROI of at least 40%. How can we use this data to our advantage. There’s a few ways.

Let’s take a look at Joc Pederson and Aaron Judge. Both have similar chances to go yard on any given at bat, but Joc is outperforming Judge in terms of ROI, what gives? Aaron Judge is one of the most prolific home run hitters in the league and therein lies the problem: because of his popularity and track record, he IPOs in the most expensive category at $5+ while Pederson goes off at a more reasonable $3-$4. Because of the discount in price, when Pederson hits the big fly you get more bang for your buck.

Two of the best ROI’s this season are from Taylor Ward and Manuel Margot. Ward has been a revelation this year. He’s been seeing good pitches batting in the same lineup as Mike Trout and Shohei Ohtani and has taken full advantage of his good fortune by sending bombs into the stands at a rate above 7.5%. Margot however, has a home run rate barely above 3%. So how has a player who has never hit more than 13 home runs in a season been such a good investment so far in 2022? The answer is a lot of singles. Margot has 27 hits this year and only 7 extra base hits among them (3 doubles, 3 homers and 1 triple). His baBIP (batting average on balls in play), often a good measure of “luck” in baseball is .353, 61 points higher than his career average . This should send alarm bells to the savvy investor that regression to the mean is coming and that can mean only one thing: shorting! As soon as the IPO closes (and sooner rather than later, during IPO) investors can short shares of Margot knowing that eventually, those singles that found the gap will turn into outs.

By doing a deep dive on players home run rates, weighted ROI, and IPO prices, we can find players that are more likely to turn a profit, players that are breakout candidates and players that are prime regression candidates. Utilizing this knowledge can make the difference between a portfolio that’s in the black or the red at the end of the night!

MLB Pitcher ERA vs Jock MKT ROI

Now that we’ve approached this from a hitting angle, why don’t we take a look from the other side of the plate: pitchers. Now you might be wondering, “wait how does that make sense, Jock MKT doesn’t offer pitchers in their markets? What can we glean from pitcher data to help our decision making in markets?”. Well, yes, you’re right that you can’t invest in pitchers directly, but what can you do is look at which starters historically have conceded the best ROI to batters faced. Here, i’ve grouped all pitchers with at least 20 innings pitched this season into four categories. The categories that are of lesser interest to us are High ERA, High ROI, High ERA, Low ROI and Low ERA, Low ROI. However, what about Low ERA, High ROI starters?

This is another group that can be used to an investors advantage in Jock MKT. Often, batters facing some of these big name pitchers with good statistics will be priced at a discount due to the perceived skill of the pitcher. However ERA, or earned run average, is just that: an average. It doesn’t tell you how a pitcher arrived at that average or even how many hits and walks that pitcher allowed. Perhaps a pitcher is really good (or lucky) at avoiding jams, but still allows a significant amount of hits. Or, maybe an elite pitcher with a good ERA is prone to a blow up game where they allow a bunch of extra base hits and home runs leading to high ROI’s for hitters in that game. Let’s take a quick look at one of those highlighted pitchers, Gerrit Cole.

Gerrit Cole 2022 Game Log

via Baseball Reference

Cole started the season off poorly, giving up 8 earned runs in his first 11 1/3 innings of work this season. He’s had better outings in his last two starts, however if you look a little deeper, Cole is still giving off alarm bells that he doesn’t have his best stuff. Despite allowing 0 earned runs in his last 12 2/3 innings, he’s given up 9 hits and 3 walks. While he’s earned the win and driven that ERA down, he may be getting lucky rather than having significantly improved his pitching skill in the last couple weeks. Due to his name recognition and the perception of his last two starts, it’s likely batters facing Cole will be available at a discount in future markets. Take advantage of this (and any other pitchers in that group) and look for batters facing them!

Related Posts