I'm a dynasty league junkie with a problem; I love dynasty leagues, and I love the NFL, but have little interest in the college game. For 364 days of the year, this doesn't matter... but on the day of my rookie draft, I always felt like I was operating at a disadvantage. Lacking any first-hand knowledge, I had to rely on the opinions and rankings of others. Giving up that control always felt unbearable, but I had no alternative- I certainly couldn't remain competitive against guys with that kind of time and experience by half-heartedly trying to scout the players myself.
This status quo remained for several years until it was interrupted by an inspiration from an unlikely source. In the world of finance, there is a method that allows an unskilled manager with no knowledge of the companies in which he invests to achieve returns that equal, or even better, the returns of his highly-educated, highly-experienced, highly-skilled peers. I've adopted, (and adapted), many of those key principles into a philosophy towards ranking rookies that I call "index investing", and in this series I will walk through the philosophical underpinnings of the strategy, the process of implementing the strategy, and the real-world impact of the strategy. Today, we wrap up the series with...
INDEX INVESTING 301: The case for switching to an index philosophy
In part one of this series, I explained the "Efficient Market Hypothesis", laid out my reasons for believing that the NFL draft is an efficient market, and discussed what implications that belief has for rookie drafts in dynasty leagues. In part two, I walked through the actual process of using the Efficient Market Hypothesis to generate a set of rookie rankings. In this third and final installment, I will explain why you should implement a similar strategy in your own dynasty rookie drafts.
Since starting this series, I've received a little bit of pushback from people resistent to the idea of outsourcing talent evaluations to the NFL front offices. Some of the reasons for that pushback were anticipated, but some other reasons were quite surprising. I will do my best to address some of the negative concerns surrounding this philosophy, and then finish by making a positive case for making the switch.
Concern #1: Who wants average returns?
The most common concern I see expressed relates to the idea of index funds in finance. In finance, an index fund does not actively try to beat the market; instead, it tries to mirror the market as closely as possible. The end result is that it provides perfectly average returns (albeit with lower fees). When index funds were first introduced, many experts predicted that no one would be happy settling for merely average returns. Those experts were wrong, as index funds are one of the most popular investment vehicles available today. Fantasy football is a different animal entirely, though. Average returns in the stock market can still get you rich, but average returns in fantasy football will get you nothing but an early playoff exit and an offseason of frustration. So why should anyone knowingly switch to a strategy that dooms them to average returns?
The simple answer is that it doesn't. It's true that if everyone in your league used an index investing approach to rookie rankings, then on average they would all get average returns... but that's true of any particular strategy. If everyone simply drafted rookies alphabetically, you'd expect any one particular owner to reap average returns from the process. The advantage of index investing comes when other owners are using a different strategy. The EMH suggests that if we see a stock that is selling for $60, that stock is really worth $60, and we should pay $60 for it. In rookie drafts, however, you'll see owners frequently taking $20 stocks (late-round players) over $60 stocks (early-round players) because of some sort of hype or buzz. Because of that, switching to an index investing philosophy lets you clearly identify the talented players who are falling further than they should be, and it ensures you wind up with more of these players on your roster than the other guys in your league, the ones who keep reaching for worse prospects.
Concern #2: Is scouting really useless?
The second most common concern I've had expressed to me is one that caught me by surprise. I've had several people tell me that they could never switch to a ranking system that didn't require scouting because they actually like scouting players. My response to that is that index investing doesn't make scouting useless at all. If anything, it just makes the amatuer scout's job easier. Typically, dynasty league owners who scout players have to come up with some sort of estimate about how talented that player is. This is a very hard job; talent is a very complex concept, and it covers a lot of variables. One back might be a better runner, but a bad receiver and an atrocious blocker. The other might be an average runner, a superlative receiver, and a terrific blocker, but have poor ball security. Another might be electric across the board, but might be undersized for the position. How is an amatuer scout supposed to weigh those wildly disparate considerations to determine which back is the "most talented"?
By allowing NFL draft position to substitute for "total talent level", a scout can make his job immeasurably easier. Remember in the second article how basic rankings got adjusted based on a player's specific skills? Instead of trying to synthesize every aspect of a rookie's play into a universal metric, an amatuer scout can instead rate very narrow aspects. If an owner is in a PPR league, receiving RBs are more valuable, so he can scout the rookie backs specifically for receiving skills. He can scout a player's blocking prowess, or his return skills, and use those evaluations to fine-tune his rankings. By breaking the scouting into smaller, more manageable chunks, an owner is likely to improve upon his accuracy, too.
Concern #3: Anyone can do it.
The third most common point of resistance I've encountered when discussing an index philosophy is that there's nothing "special" about it. Anyone at all can simply take a list of players sorted by draft position and make minor tweaks so it fits their league. This is quite true; in fact, I view it as a strength of the system! Processes don't have to be ludicrously complex and proprietary in order to be good. Quite often, complexity is nothing more than needless complexity. Creating rookie rankings is already a difficult, multi-faceted endeavor, and if I can outsource the very hardest part to NFL franchises that makes my life that much easier.
Just because anyone can do it doesn't mean everyone will do it. I would make an analogy to the strategy of streaming defenses. It's quite simple to understand that a mediocre defense playing a bad offense will score as well as a great defense playing an average offense. It's pretty simple to troll the waiver wire every week for whichever defense has the best matchup. Despite the simplicity of the concept and the easy rewards, I find that in most leagues, few owners bother to execute it. In the years I've been applying an index philosophy to my rankings, I have noticed the same thing. While anyone could easily use the concept to produce a set of rankings that closely resemble my own, I find that few people actually do. In this case, using a simple, easily-executable strategy will still differentiate you from your peers.
Now that I've addressed some of the biggest concerns, I'd like to close with a positive case for using index rankings in your league.
Reason #1: It saves time.
Every minute I spend not scouting a player is a minute I can spend improving my team in other ways, whether it's searching for sleepers on the waiver wire or chatting up my leaguemates working on a trade. Heck, from time to time I might even use the extra free time for something wildly unproductive, like hanging out with my wife and son.
Reason #2: It fills your roster with talent.
If we believe that nobody can scout talent as well as the NFL consensus, then anchoring our rankings to the NFL consensus means we're going to be drafting more talented players than our leaguemates. I don't know about you, but I view that as a pretty positive outcome.
Reason #3: It's totally customizeable.
If you play in a pretty standard league, then the standard rankings you'll find online will probably be a pretty decent fit. Good luck finding a solid set of rankings if you're in a 1.5 TE PPR league, or a league that rewards return yardage, or a league with QB-heavy scoring and a superflex, or any other non-standard league setup. A big advantage of index rankings is that you control how much weight to apply to each individual variable every step of the way, so you can easily tailor the rankings to your specific league by simply changing the weight.
Reason #4: total self-sufficiency.
As I mentioned at the beginning, this whole idea started because I didn't like being reliant on the opinions of other fantasy experts to determine how much a rookie was worth. With index rankings, I can now generate quality rankings without any reliance on outside input.
Reason #5: The proof is in the pudding.
Still skeptical? That's okay, you don't have to take my word for it. Go back and look at some of your previous rookie drafts and identify the biggest blunders, then ask whether that would have happened under an index investing system. Mark Ingram over A.J. Green and Julio Jones? Nope, wouldn't have happened. Daniel Thomas and Ryan Williams over Cam Newton? Not a chance. C.J. Spiller and Percy Harvin going behind multiple players drafted later? No sir. Of course, index investing is not without its flaws. Last year, it would have pretty heavily overvalued A.J. Jenkins, for instance. Also, players like Alfred Morris will always rank criminally low in hindsight. Of course, according to MFL, Alfred Morris's ADP ranked 48th in offense-only rookie drafts last year, so it's not like traditional ranking methods discovered him, either. It seems everyone overrates their ability to spot "the next Alfred Morris", forgetting how poorly they did at spotting the first Alfred Morris. In the long run, your team will be far better off if you just keep drafting the early-round stars while everyone else wastes their time chasing that late-round gem.