Daily Fantasy Football: Using Contrarian Strategies to Win Money
I just completed a high-stakes draft in which I selected Arian Foster, Darren McFadden, and Mike Wallace—three players I thought I wouldn’t own heading into the 2013 season. One of the reasons is because, with a massive grand prize payout, I was really implementing a risk-seeking strategy.
But I also jumped on those players because there are currently concerns regarding their potential production. Foster hasn’t taken a single snap in the preseason, McFadden is probably one-in-100-trillion to play all 16 games, and there have been poor reports out of Miami on Wallace all preseason.
None of that is inherently beneficial, of course, but all of that information is known by everyone drafting. The risk surrounding each player is already priced into their draft slot, meaning there’s a decent chance to acquire value. All three players—and others such as Josh Gordon, Justin Blackmon, and Ryan Mathews—are getting drafted as if everything that we know could go wrong will go wrong. But we just don’t know that yet—McFadden might play 15 games this year, yet he’s getting drafted as if he’ll 100 percent be out for at least a month—and it creates value propositions.
Such a draft strategy—one in which you acquire value by purposely going against popular opinion—is known as a “contrarian” approach. The idea is that you can “buy low” on players who the public is fading, understanding that the risk associated with them is already factored into their cost, yet the potential reward isn’t.
A Contrarian Approach to Daily Fantasy
Not only should you be using a contrarian approach to daily fantasy, but one is probably essential to your success. Daily fantasy is a marketplace even more so than season-long fantasy; players are priced to reflect public opinion, so you need to find value where others aren’t looking.
Target Underachieving Studs
The first month of the season is such an awesome money-making opportunity in daily fantasy, for two reasons. First, you can still use your season-long rankings to obtain value. I’m very bullish on Cecil Shorts in season-long leagues, for example, and he’ll be a staple in a lot of my early daily lineups.
Second, most owners are too quick to abandon underperforming players. When high-ranked players struggle early in the year, their price typically drops fairly quickly on most daily sites. Many daily fantasy owners avoid those players because, well, they aren’t playing well.
It’s your job to determine if the lack of production is due to random factors—an unusual lack of touches, a few difficult matchups, and so on—or because of something more lasting, such as a shift in the depth chart. In most cases, outcomes are more random than most like to believe. You can capitalize on others’ eagerness to view everything as black-and-white—their willingness to fade underachieving players because a few poor games must be an ominous sign.
Fade Overachieving Players
Just as you can generate value by targeting underachieving players, you can also bypass potential hazards by (typically) fading overachieving players. Remember, there’s a lot more luck involved with outcomes than it seems, so chances are the No. 3 receiver with two unexpectedly big performances early in the season won’t be able to sustain his production.
Further, even if you expect a player to continue his roll, it can still be difficult to see a return on him. Since prices rise after a few big games, the odds of acquiring value on a hot player are minimized. Your job is to predict the breakouts before they happen, not wait until afterwards when the cost makes value-acquisition prohibitive. When a player is performing at his peak, his salary is often reflective of his ceiling. We want to target players whose salaries match their floors, leaving lots of room for a positive return on our investment.
Target Unknown Commodities
In the same way that most people fear risk, they also tend to shy away from the unknown. They treat risk and uncertainty in the same manner when the two are vastly different. Late in 2012, I cashed in big-time by targeting Bryce Brown—a seventh-round rookie starting in place of the injured LeSean McCoy.
Brown is a talented back who was due to see at least decent workloads, yet he was priced incredibly low on daily sites simply because he had no history of production. Owners feared the unknown, confusing it for major risk when Brown’s risk level was moderate at best.
You can generally acquire value by seeking backups who become starters, rookie running backs, and other unknown commodities. When the prices for rookies Gio Bernard and Eddie Lacy are low early in the season, it’s the best time to be bullish on them. They’re priced so low because of a lack of past production, not an inability to produce in the future.
Fading Thursday-Night Players
I talked about this in my article on league timing so I won’t get into it too much, but there’s value in joining Thursday leagues and subsequently fading players in that night’s game. Since so many owners in those leagues target players suiting up that night, there’s a really great opportunity to employ contrarian tactics.
Avoid Obvious Values
A final way to optimize your daily fantasy lineups is to (sometimes) avoid obvious values. You never want to bypass your top value plays if they’re outliers, but in the event of small differences in value, it’s typically best to go with the less popular player, for two reasons. The first is that you can decrease the variance within each matchup. If you play the same guy as the majority of other owners, it just decreases the number of relevant players in every lineup, thus increasing randomness. Unique lineups do just the opposite, and if we’re long-term winners, we want to decrease the role of randomness.
Second, you always need to account for your own fallibility. Our goal is to be as exact as possible in our projections, but none of us are so untouchable that we can be confident in very small differences in projections or value. If I have two running backs with the same salary projected 0.1 points apart, it would be foolish to think that I’m so accurate that the higher-ranked player is a significantly better option. In that case, I’d be better off being a contrarian and targeting the less popular player.