This experiment also applies to investing and fantasy football

Read this article about decision preferences - and how our evaluations of our decisions change our preferences after we make decisions.

The general idea is that we have cognitive process in place to reinforce the idea that the decision we made is better than we initially thought it was, and in the case of purchases as a result we value what we currently have more than we would value it if we didn't have it.

In fantasy football, I think it explains why there are so few player trades in my league. In my league hardly anyone wants to trade because they value their own players too highly. Very few fair trades can be found that are agreeable to both parties.

It can manifest itself as follows:
A. Let's say I have Shaun Alexander on my team. If I want to trade Shaun Alexander for another team's Lamont Jordan, the trade gets rejected.
B. However, if the situation was exactly reversed and I had Lamont Jordan and wanted to trade for Shaun Alexander, that trade would also be rejected.
C. Neither version of the trade will be accepted. Either Alexander > Jordan or Jordan > Alexander, but it seems in our league it depends on which one is on your team. One of the trades has to be better than the other.

In investing, I think it helps explain why we may tend to have a better opinion of our own holdings than the market overall has, and why we might hold onto a loser too long - or do what I've been doing recently and average into a stock that is dropping. In the past I've found this is not a good practice, but as we've seen I sometimes cant help myself because I've convinced myself of the value of a current holding. These psychological experiments in the story show that simply by making a decision to buy a stock I am also making a decision to overvalue that stock.

Knowing that this effect is in play can at least help us understand our thinking and control against these counterproductive tendencies.

Fantasy Football Roster 2007

We had our fantasy football draft today after work.

Here's the first 12 players in my work league for 2007. It's a 14 team league starting 1 QB, 2 RB, 2 WR, 1 TE, 1 K, and 1 Defense. I picked 4th in a serpentine draft order.

Rd pick player
1 4 Shaun Alexander RB, Seattle
2 25 Brandon Jacobs RB, NY Giants
3 32 Torry Holt WR, St. Louis
4 53 Plaxico Burress WR, NY Giants
5 60 Javon Walker WR, Denver
6 81 Adrian Peterson RB, Minnesota
7 88 Ben Roethlisberger QB, Pittsburg
8 109 Tatum Bell RB, Detroit
9 116 Bernard Berrian WR, Chicago
10 137 Alge Crumpler TE, Atlanta
11 144 Rex Grossman QB, Chicago
12 165 Arizona Team Defense

We have a salary cap league and I have enough left under the cap to pick up a kicker and perhaps a backup Defense and hopefully a backup TE. I'll do that once we open free agency in a few days.

I'm pretty happy with everything I have right now, except I'm slightly concerned at the RB position. I may have stretched a bit to take Brandon Jacobs in the late second round and might should've taken Chad Johnson or Reggie Wayne who were both still on the board and hoped that Jacobs would still be there in the 3rd round, but I didn't want to risk it because almost all of the decent calibur starting RB were getting snatched up at that point.

For my #3 RB I picked upside potential with Adrian Peterson in the 6th round rather than taking a player like Jamal Lewis or Lamont Jordan. Hopefully my RB picks don't come back to bite me.

I feel very good about my WR - I feel like I got 3 #1 WR somehow (I'm not sure why Javon Walker stayed on the board until the 5th round but I couldn't pass on him).

Was also very pleased to be able to pick up Alge Crumpler in the 10th round. Everyone seemed afraid to take him because of all the issues with Atlanta this year, but he's a top 10 TE.

Fantasy Football - Team Defense

At work our fantasy football draft is tomorrow and I've been busy this weekend on my pick sheets. I think there's something inherent in most who play fantasy football that we think we can outsmart the experts, find sleeper picks, find over-valued players, etc... For some reason we think we can go home one weekend and come up with a better list than several dozen professional websites - who've probably spent 100s or 1000s of hours putting player projections together... Heck, we might not have even seen one game last year by some of the players we're projecting, but we've read somewhere that a player's having a great pre-season...

But I guess that's the fun of it. We'd rather go down in flames with our own mis-guided player list than just blindly using a carefully researched cheat sheet from a professional website.

Well, today I've been looking at Team Defenses and have come to the conclusion that they're very difficult to project - at least not with the certainty to warrant a high draft pick.

For example:

In 2005 the top scoring defense in my league was Carolina with 220 points - about 60 points better than average. So it should make sense that they would've been good in 2006? Nope! Carolina had a below average defense score in 2006 - ranking 19th in the league. (Defenses in fantasy football include things like sacks, interception, fumble recoveries, return game TD, defense scored TD, safeties, blocked kicks/punts, points allowed, etc)

In 2006 the top scoring defense was Baltimore scoring a whopping 275 points - a full 109 points better than the average defense. So should I step up and draft such a powerful defense early? I don't know, because they only scored 172 points in 2005.

Here's another thing. The 3rd best defense in 2006 was San Diego - scoring 208 points. Was 2005 any indicator that they'd be that good? Not really. In 2005 the San Diego defense ranked 23rd in fantasy defense only scoring 148 points.

Why should defensive scoring be so volatile and seemingly unpredictable? The Baltimore defense would seemingly be drafted very early - probably a first round draft pick if they could be relied upon to score 270 points again this year, but in our league the top defense generally doesn't get drafted until the 3rd round, and in most leagues the defense doesn't go until much later - 5th or 6th round. It does seem they're highly unpredictable.

Some stats: The top 10 fantasy defenses in 2005 scored an average of 195 points, an average of 35 points above average. In 2006 those same 10 defenses averaged 167.4 points - less than 2 points better than the average for the league. In fact, 5 of the top 10 2005 performers were below average in 2006. In fantasy defense, past performance seems to often have little to do with future performance.

It makes me think fantasy scoring for defenses is based largely upon random or at least unpredictable results and that the level of certainty of future defensive scoring is very low.

There is one defense that has been consistently strong over the past 2 years: Chicago Bears. They performed well above average with 216 points in 2005 and 248 points in 2006. That seems more the exception than the rule though.

My plan? Unless the best defenses drop farther than they normally do in my league I'll probably try to take two defenses late and play the best match-up in a given week.

Fantasy Football

Fantasy Football season is almost here. At work we picked numbers to determine our draft order today for our 14 team league. I got lucky and picked #4 this year, the best pick I've had yet over the past several years.

Players like Frank Gore, Shaun Alexander, and Larry Johnson will likely be among those I'm picking from at that spot.