More on why the big trade is usually poor strategy and a piecemeal approach should usually be preferred.

In The Prince, Niccolo Machiavelli outlined two important principles on adaptability and flexibility. The first is that through foresight and forethought, especially in planning and preparation, the effect of chance can be minimized and the effect of skill maximized. The second is that most people are rarely prudent enough to adapt to what is happening around them. The person who has prospered previously by pursuing a particular strategy will rarely be persuaded that it is a good idea to reject it simply because their experience teaches them otherwise. These principles apply very succinctly to the “large trade.”

To refer back to my post on making the “Large Trade,” I should point out that many of the trades on Jeremy’s list of the worst trades in one of our leagues together are large trades. This is no coincidence; it is just too easy to go wrong. One cannot minimize risk and maximize skill; in fact usually the opposite is true.

Most owners may think that they can get a handle on whether and how much a large deal will help their team, but there are simply too many confounding factors when you get into these large deals. Yet because of past experience, (as Machiavelli predicts) and the allure of possible huge returns for a small amount of work, most owners are continually looking to re-enact their past successes; they can not be persuaded that it is not correct to do so.

Just as an example, take a look at some of the players that could be considered throw-ins (at the time) in those deals mentioned by Jeremy. In fact, there have been studies about real baseball trades in SABR, and the studies found that the “throw-in” often ends up being the most valuable part of the deal. Just look at John Maine for you Met fans.

How can the Fantasy General manage the high-risk/high-reward nature of the throw-in if he must analyze two or three of them in one deal?? In deep keeper leagues these throw-ins are typically low salaried minor leaguers; in shallow leagues they may be speculative guys like the middle reliever who may have a shot at closing or the backup to an injury prone regular. Trying to manage lots of this type of risk in one deal is very difficult.

Similarly, take a look at the younger players in Jeremy’s deals and how many were highly regarded. A good portion of the worst trades involve these young players that didn’t pan out; yet the owners making the deals I am sure were able to justify the deal to themselves. I would wager that experience in your league is similar. This is another risk factor that can really kill a rebuilding team. If you make one deal for three keepers and give up two studs you can lose a lot of opportunity cost since you can almost always get more keepers by dealing the two studs separately.

I have found that this type of dump trade, getting rookies for veterans, is where the worst deals come from. The owner who is rebuilding is usually somewhat desperate to ensure he doesn’t get stuck with the studs, and then botches this strategy, if it can even be called a strategy. In almost all instances he could have gotten far more value in a piecemeal approach. If you are a rebuilding team in a long term keeper league, then targeting these players may be a strong strategy, especially if you have good judgment when separating the wheat from the chaff. But in a non-keeper league, or even just a shallow mixed league there are a great many number of things that must go right for you to profit significantly from a large trade.

It is my general strategy to take a piecemeal approach, however I am not above the five player deal when properly considered. There are three reasons for this. The first is that the piecemeal approach maximizes the value gained more efficiently. It is my experience that it is much easier to gain $20 in profit over five deals than in one, unless it is a pure dump trade or the owner whom you are fleecing is weak.

For what it is worth, I wish I could tell you that I have made some of these fleecing trades, but they are few and far between and usually only occur when I get lucky with a throw-in. It is not my usual strategy to even pursue these deals, for reasons that I will discuss in the future. So, for me, the piecemeal approach gains the most value, and even small differences in profit from pursuing one strategy over another can make a big difference, especially in a high stakes league where there is significant actual profit to be gained!

Secondly, it spreads the risk. When your team is at the top and trying to fend off challengers, risk is your enemy. If you make a “large trade” you are essentially putting a lot of eggs in one basket. It is much better to seek five smaller baskets than one large one; if things go south then at least you have other options. Moreover, against better competition it is very unlikely that any onw owner can amass the talent for you to make a large profit off of a large deal. And if your adversary is astute enough to amass this talent do you really think he is going to give it all up in one fell swoop?

A third reason is that it allows you much more flexibility in responding to what happens. If you are the first to act and make a large trade you are essentially now at the whim of your fellow owners; you have fewer ways to respond. If you make a large deal and gain $20, and a competing owner makes a fleece deal for $30, you may have a tough time gaining that extra $10; the opportunity cost of trying for one huge deal can be prohibitive.

I realize these are mostly abstract concepts at this point; so over the next few weeks (since I don’t want to ignore the analytical side in favor of pure strategy!) I am going to go through a sequence of deals from my high stakes league involving me, two other owners who were possibly (almost certainly in my opinion but no proof other than a gross disparity in value) colluding, and how I responded. What you will see is that I set about making a lot of smaller incremental deals until my position was as strong as it could be. In response a close competitor made a huge deal that was essentially cheating in my view; nevertheless it may not work because the damage may already be done.

In looking at these deals you will at least see how the strategic principles outlined were out into play and how these deals each supported my overall strategic plan for my team. Having the ability to respond after the possible cheat deals will hopefully carry the day for me. I could not have done it had I made a large trade.
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