Fantasy football and Wall Street have more in common than you may realize. In both arenas, success depends on being better than the other players at analyzing statistics and picking winners while being comfortable with the vagaries of chance. And in both arenas it is difficult to dominate consistently.
So, what does it take to win both on Wall Street and in fantasy football?
To understand how a Wall Street veteran approaches the game, we caught up with former Goldman Sachs investment banker Eugene Plotkin, who shared a few tips of the trade.
“Fantasy sports offers an escape from the challenges of daily life for a lot of people. And on that point, a lot of the guys I know from the Street talk openly about how their skills apply to fantasy,” Plotkin says. “Whether you’re betting on a little known small-cap stock or a deep draft pick, your goal is essentially the same – finding value that the other players miss.”
The most important lesson stock traders can teach fantasy team managers is also the hardest to master, he said.
“If you really care about winning in fantasy sports, you have to take the emotion out of your decision-making,” Plotkin said. “Of course, that’s easier said than done. But if you can focus on the numbers and not get caught up in the sports show hype or your personal feelings about a player, you will make better choices. I know guys who crush their fantasy leagues without ever watching a game. These guys are pure statisticians.”
Eugene Plotkin explains that both sports teams and money represent inherently emotional topics. As a result, recreational fantasy players and recreational investors tend to both make the same types of mistakes that ultimately stem from personal bias.
“There’s one scenario I see play out every year. Someone drafts a prospect, holds onto them for a few weeks, then drops them when they haven’t put up big numbers. The very next week, that player has an amazing game. So, what happens? The manager swears not to let it happen again, and they hold on to all their other players far too long,” Plotkin says. “It’s a classic case of over-correction and it’s built purely on emotion. If you’re going to win your league, you have to focus on the next best step and accept the fact that some decisions will not work out.”
That brings us to Eugene Plotkin’s second piece of advice, which is to beware the recency bias. It’s important to remember that past behavior is not always indicative of future statistics.
“There are elite players who have an off year, their yards go down, and people write them off, but then they go and have an amazing season,” he said. “And the reverse happens as well. Someone will have a huge season, then regress. The sharp move is to draft players with elite talent who have become undervalued because of a statistically abnormal season.”
To illustrate the point, Plotkin pointed to Cooper Kupp, who put up tremendous numbers last year. “Kupp is a phenomenal talent, but statistical analysis tells us that it is unlikely that he has the same kind of transcendental season twice in a row,” explains Plotkin. “Just like in the markets, you want to buy low and sell high.”
“Look at a player like Dalvin Cook,” continued Plotkin. “After two solid years, he underperformed for fantasy teams last year. Nobody has a crystal ball, but fantasy coaches should focus on guys like Cook, who may be available at much lower average draft positions which belie their upside.”
Eugene Plotkin agreed that the biggest stars tend to deliver value, but he noted that this value is not always as high as fantasy coaches expect based on what happened last season. A key part of his recommendation is to keep recency bias in mind when targeting players.
“In the stock market, you want to diversify. You never want to put all your eggs in one basket—and it’s the same in fantasy,” he said. “Drafting the top running back is like investing in a blue chip, but what’s your plan if that running back has a season-ending injury or that blue chip has a massive product recall? It’s the choices in the value rounds that make or break your success, whether it’s your fantasy season or your stock portfolio.”
Just like a smart stock portfolio, a winning fantasy team does not rely on making a single unicorn bet. A better strategy is to research, find value, and diversify so that you can stand tall in the face of challenges, whether they be byes, injuries, or coaching decisions.
“There’s a common thinking that in fantasy football you need to take big swings or else you’ll never win,” Plotkin said. “The truth is that you need to play consistently better than your opponents. You’ll want a deep bench of solid skill players instead of pinning all your hopes on a star to put up massive numbers two seasons in a row. Sure, it could happen. But the odds are against you.”
Plotkin also suggests that fantasy coaches and investors should trust their own analysis rather than blindly following the herd.
“Don’t change your whole draft strategy because two people ahead of you took quarterbacks early,” he explains. “If you’ve done solid work ahead of your draft, you’ll get better mileage out of staying with your plan rather than changing it last minute. As they say in poker: scared money is dead money.”