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Game Theory and Asset Management: Stay Liquid

By Blair Pierroz

Bruce Lee said “Be water.”

The Fantasy Footballers say “Stay water.”

Today, I want you to add one more maxim to the list: “Stay liquid.”

Draft picks are what make dynasty special. They allow us to take complete control of our team and feel like a true GM, adding multiple layers of strategy that are not present in redraft. They allow us to plan for the future or go all-in for a season or two. They just make everything more fun.

And yet, their value is incredibly polarizing within the dynasty community. Some players seem to throw picks around as if they are worthless while others expect to get studs for a second round pick. Picks can be incredibly valuable, but we need to suss out exactly where the true value lies. It is much broader than just helping a team to rebuild.

Misconception: Picks are overrated

Often I hear that picks are overrated because so many of them end up busting and being worthless. Even a majority of first round picks will never live up to expectations. This is true, as the hit rate for picks can be surprisingly low. There is also a fair amount of variance not only within drafts but between drafts that can make their value hard to hammer down. A pick in 2017 was most likely far more valuable than the same pick from 2016.

I will let you in on a little secret: You don’t actually have to make the picks. I think this is where the most value can be squeezed out of each and every pick if we are able to stay water with our liquid. Just like with buying and selling stocks, timing is everything. If we are taking the day trader mentality, a pick only needs to stay in our possession until we find the right time to move it.

The reason picks are so valuable is they are the only universal currency in the game that is also universally transferable. This means they can be used to trade for any piece, regardless of roster construction. There is no limit to the number of draft picks a team accumulates, and regardless of personal valuations, no team will turn down getting more picks.

Within each league, the market will certainly vary. However, regardless of league, when trying to complete trades draft picks are often the necessary capital needed to ensure true balance between teams. It is very difficult to balance out trades without throwing in some extra capital. If you don’t have enough picks or ones with the proper value, it can be difficult to get over the hump and complete a trade. Or, you may have to throw in a more valuable skill position player that you could have kept if you had the picks to include.

A WR6 at the end of the bench may theoretically be as valuable as a 3rd round pick, but the pick will almost always be preferred as the add on to create equal value. While some players may not value them properly, they will never turn down a pick thrown in as a sweetener. A team can have too many WRs but they will almost never have too much draft capital. 

People also tend to believe that picks are only valuable to a bad team that is rebuilding. But I would argue that a contender has just as much need for picks as anyone else. There is so much uncertainty in dynasty, you want a bit of an insurance policy should things not go to plan. A midseason injury or two can completely derail a championship bid. If you have already gone all in, and your window closes due to injury, it could be many years until you are competitive again.

By keeping some powder dry, or only going all in around the trade deadline allows you to pivot if the need arises. Maybe you thought your team could seriously compete, but after 5 weeks your hopes are already dashed. If you still have some picks, you still have the opportunity to reload and come back the next year. Conversely, maybe you planned on competing in a year or two, but your team is unexpectedly overachieving. Capital allows you to make one or two upgrades and open your championship window earlier than expected.

Most simply, it’s these draft picks that can be used as the easiest way to upgrade from an RB3 to an RB2 or a WR2 to a WR1. Think like you’re playing Mario and just picked up a mushroom. I believe this is the most valuable use for draft picks, assuming you can execute the trade and timing properly. It provides guaranteed value in a market where assurances are very difficult to come by.

This guaranteed value is what truly sets draft picks apart. There are so many variables in dynasty, it is taken for granted when we are able to remove even one of those. Picks can be a safe haven in this case. While they are the only universal currency, they are also the only asset that will definitely appreciate with time. Which leads me to…

Misconception: Picks that are a year or more out are far less valuable than a player on your team now.

This idea is more controversial, and is tied to asset management in the real world. Often due to inflation and the prospect of investing as a way to grow your money, cash in hand is far more valuable than cash in the future. This is somewhat true in dynasty, but is not nearly as dramatic as most owners believe. True a 2023 1st is not as valuable as a 2021 1st, but the difference between them is not as severe as you would think.

For one, there is no inflation within a league’s market. It is a completely closed system, and extra picks are not able to be introduced. In the real world, inflation necessitates the need to have cash on hand and invest it wisely so it does not lose value over time. Just putting your money under your mattress causes it to depreciate as it loses value relative to the rest of the economy.

Also, there are not really ways to invest and grow your capital in dynasty. Smart investing in the real world makes capital more valuable in the present. As I have said before, picks are the only guaranteed assets to appreciate. Young prospects are great, but do come with the risk of busting. Picks provide safety and a guarantee.

The only limiting factor to future draft picks is patience. Always being in a position of strength increases the value of your entire roster. Avoiding needing to make a trade allows the ability to be smart with your moves and only makes ones that benefit you. Avoid making desperation moves at all costs. Are you in a position where you can afford to wait? If so, I would suggest finding ways to accumulate future picks as a way to increase overall value. Again, you don’t need to actually make these picks! Trade them at a profit down the line. Maybe even trade them during…

Mistake: Not controlling the pre-draft process

This is the crux of my entire series. Everything has been leading to this one event, the draft. Accumulating value and understanding your opponents all comes together during the time leading up to the draft. Strike now, and set yourself up for the rest of the season. 

This is where the picks you have been accumulating have reached their maximum value. Rookie fever is the greatest opportunity you will have to tinker with your team and get it to a place you like. Picks are going to be your most valuable trade pieces during this time, and use them wisely. The more you have been able to hoard the more leverage you will have.

YOU DO NOT NEED TO MAKE THE PICKS. I cannot stress this enough. All of those picks you have been sitting on all year should not all make your roster. Use them to go and snag proven veterans in positions of need. Find a rebuilding team and try to trade for some of their veterans. Package young players with picks to take advantage of the rookie hype. 

Use them to move up or down the board to positions of strength. Specifically, locate tier breaks and move to the end of them. In Superflex drafts this year, there was not a huge difference in value between picks 1 and 4. Identify your tiers, and then move around as best as possible to put yourself at the end of each one. The more ammunition you have, the easier it will be to move to the spots you want.

Everything comes down to planning and patience. Can you outmaneuver your opponents and think a few steps ahead? Can you identify pockets of value and move at the appropriate times? Unfortunately, there is no shortcut to success. You need to study, you need to be active, and you need to stay liquid. 

Combining all three aspects of my strategy should help you get your team to a better place. 

  1. Churn and earn
  • Acquire value whenever possible. Keep churning through your lineup, moving pieces whenever you can increase the overall value of your roster. 
  • There is so much luck and variance in this game, continually increasing your overall value gives you a chance to win every year, instead of having a short term window.
  1. Keep your enemies closer
  • Send out feelers every chance you can. Seek out buy low opportunities through strategic planning strategic planningand never trading from a position of weakness. 
  • Even if you need to create a weakness on your roster, if you are winning a trade, the long term benefit will outweigh the short term hole.
  1. Picks are a boy’s best friend 
  • Trades become so much easier to execute with picks, and allow you to always strike when the opportunity presents itself. 
  • Picks also allow you to stay flexible and avoid the dreaded full rebuild.

I hope this series has allowed you to reflect on your own strategies. Even if you disagree with the arguments I have made, hopefully it has helped you solidify in the strategy that will benefit your team most. Keep hustling, keep studying, and stay patient. Until next time, stay safe and good luck out there, friends!  

Blair Pierroz – Co-Host of Cover 3 Podcast, Writer
Twitter: @BlairPierroz

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