Staking Bales: Week 3 and Understanding True Bankroll

As part of this “Staking Bales” series in which I try to turn $2,000 into $2 million (or $3,000, whatever), I profited $334.48 in Week 1 and lost $70.35 in Week 2. That’s not a bad start thus far; I’d prefer two profitable weeks, of course, but if my probability of profiting in a given week is anywhere between 25 percent and 75 percent (which it surely is), then the most likely outcome after two weeks would be 1-1 in terms of profitability.

So here we are. Last night, a reader hit me up at my Twitter and argued that some players aren’t playing aggressively enough because they can just reload if their funds disappear. And that’s certainly true—you can reload if you choose—but it’s vital to make that determination before you even start playing. Are you going to reload or is all of the money you’ll use already on the sites? If you’re going to reload, your true bankroll is more than what you have in your accounts.

For this series, we’re playing with $2,000. That’s it. Nothing more. So I need to make every decision with that in mind. I’m not playing ultra-aggressively because I know that I can’t just deposit more money if need be. So every decision I make, from the amount of money to place into my optimal heads-up lineup to the highest tournament buy-in I can afford, is a reflection of the money I currently have on the daily sites.

But that might not be the case for you. Have you ever thought about what you would do if you lost the money you put into daily fantasy? What if you deposit $400 and promptly lose it by Week 5? Will you reload? If so, you can afford to play more aggressively—to “take your shots,” to borrow a poker term—in an effort to maximize your profits. The fact that I knew reloading isn’t an option in this series is why I was able to maximize profits in Week 1, but also why I limited losses in Week 2 (despite an awful week).

A Change in League Structure

When the season started, I declared that, for most weeks, I’d be playing right around 25 to 30 percent of my bankroll on two or three heads-up lineups and around five to 10 percent on tournaments. Moving forward, I think those numbers are going to change.

We all know there’s a lot of bad money in tournaments. I took a look at a big tournament I entered last night and there were probably a dozen lineups with nearly all players from the Thursday night game. Give me some of that action.

But the problem with many tournaments is that, since you cash so infrequently, it’s hard to find sustainable success. You can’t put 10 percent of your bankroll into leagues that pay out only the top 10 percent of entrants. That ain’t gonna work.

But two things have shifted a bit this year. First, I’m seeing fewer and fewer novice players in head-to-head leagues. Even though heads-up leagues are safe, they’re not really “safe” if I’m continually facing sharks. I have a 60+ percent heads-up winning percentage, but it’s nowhere near that if I’m playing the big names in daily fantasy all the time, and it’s certainly not high enough to overcome the rake.

Second, a lot of tournament structures have changed. Many sites—DraftKings in particular comes to mind—are paying out the top 20 percent, top 25 percent, and even the top 33 percent of tournament entrants. That creates the Holy Grail for fantasy owners because you get 1) high upside, 2) relatively low risk, and 3) bad money.

Understanding Payouts

In my book on daily fantasy, I wrote:

The first thing you should do before entering any league is check both the payout percentage and the payout structure. You’d be surprised to learn that most of the 2,500-man “mega” tournaments out there are really only twice as risky as many five-man leagues. That’s because most of the larger leagues pay out around 10 percent of entrants, whereas some five-teamers pay out just one person—20 percent.

If you can properly manage your money (admittedly a big ‘if’), large leagues can provide lucrative long-term returns. However, you have to be prepared to make money when winning 10, 15, or at most, 20 percent of the time. The take-home point is that the payout structure determines your risk.

Most tournaments still pay a relatively low number of entrants, but like I said, it’s changing. If you can find tournaments that pay out the top-quarter and you’re a long-term winner, you might have a one-in-three or maybe even a two-in-five chance to cash. If that’s the case, such tournaments are better investment opportunities than head-to-head leagues.

I think the most advantageous trait any daily fantasy owner can have is flexibility. You have to be able to change your approach as needed, evolving to take advantage of new opportunities all the time. So that’s what I’m going to try to do here, still focusing on heads-up leagues (especially on sites like FanDuel where you can still find fish) but placing more emphasis on high-return tournaments.

A Few Plays for Week 3

As always, your lineups should be site-specific. The same player can be outstanding value on one site and horrible value on another based on his salary and the scoring system. But some tend to make their way to the top of the value charts each week, regardless of the site, and here are a few of those for me this week...

QB Geno Smith vs. BUF

Smith hasn’t been good. He has only one touchdown and four picks with a 53.4 percent completion rate. But he’s also added 64 yards on the ground, which is the equivalent of 128 yards passing on most sites. And if we were looking at Smith as a rookie quarterback with 598 yards passing (but no rushing yards) in his first two games, I think we’d see him differently.

Ultimately, though, this just comes down to his salary. Smith is still so cheap that he should be able to give you a return, but the real value comes in your ability to own other studs.

RB Adrian Peterson vs. CLE

Oh wow, the daily fantasy expert is telling us that AP is a good play? Genius. Look, sometimes Peterson isn’t a quality option because he’s priced too high. No player is inherently valuable without a comparison to his salary. But most sites are pricing Peterson just a notch above the others, while others don’t even have him as the priciest back. He showed last week that it really doesn’t matter who he plays.

WR Calvin Johnson vs. WSH

See Peterson, Adrian.

TE Brandon Myers vs. CAR

Myers won’t light up the scoreboard for you and he’s probably not a great tournament play, but he sure is cheap. He costs only $4900 on FanDuel—over $3000 less than Jimmy Graham. Those are $3000 that can go a long way elsewhere, making up the gap between Myers and Graham.

I think Myers is a symbol of how I’ve been playing the tight end position this year. If you don’t own Graham, it’s probably best to make your way down the tight end salary lists. Jason Witten has added value in PPR leagues, but it’s the tight ends like Myers, Charles Clay, Jordan Cameron (not so cheap anymore), Julius Thomas (ditto), and Jared Cook who have provided the early-season value.