The Dynasty Investor: September Update

Jay Stein applies investment and valuation concepts to Fantasy Football.

Methodology: The way we measure value in the Dynasty Investor is by looking at a player's KeepTradeCut (KTC) vs. his fantasy point per game (PPG) in a ratio called the price-to-earnings (P/E) ratio. P/E = KTC / PPG / 10. Then, you compare that player's P/E ratio to a like-for-like cluster of players from an age, production, and potential perspective. Players in the same cluster should be valued similarly in the market on a P/E basis. If they aren't, then an arbitrage opportunity exists to create value.

Emotional Stability 

In 2012, I was getting my MBA at Ohio State and was offered the opportunity to visit Berkshire Hathaway in Omaha, Nebraska, and meet with the 'Oracle of Omaha' Warren Buffett. One of the first pieces of advice Mr. Buffett expunged to us students was the concept of emotional stability.

Emotional stability is maintaining a consistent mood and calm demeanor despite stress or uncertainty. It involves managing emotions effectively and adapting to challenges without becoming overwhelmed. Emotional stability plays a crucial role in investing (greed or fear) because it influences decision-making and risk management by helping to avoid impulsive decisions, manage stress, maintain discipline, use objective analysis, and stay long-term focused. Keying in on the objective analysis piece, as it relates to fantasy football, we all have personal views on certain players/teams/coaches that may lead us to bad decisions. Emotional stability supports a more objective analysis of fantasy football conditions and investment opportunities rather than letting our personal biases or emotional reactions cloud our judgment. This topic will make much more sense when you discover we will downgrade some players we like in today's article. 

The Dynasty Investor process is about accumulating value by taking advantage of market inefficiencies, and sometimes that means selling guys you like and buying guys you don't care for all that much, all in the name of creating value. We like CJ Stroud as a player and in fantasy football, but when his price shot up to the 2nd overall player in KTC, we downgraded him (December 2023) because there was just too much trade value you could accumulate from the euphoria. The same thing applies to some of our upgrades/downgrades today.

But first, here are my updated cluster positional charts.

Updated Cluster Charts 

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