Investing & Maybe Fantasy Baseball

A question I have continually grappled with is how to rank and project players who will most likely miss 25 percent or more of the season. The poster child for this type of player the past three years has been Rich Hill.

For the 2017 and 2018 seasons he has averaged about 133 innings with a 3.49 ERA, 1.11 WHIP and 158 strikeouts. On a per start basis, he has been a top 30 starting pitcher. Last year in NFBC drafts he was the 45^th pitcher taken (which I felt was about right at the time).

For the past three years I would project how many innings Hill is most likely to pitch and then add the innings of a replacement level pitcher. For 2019 (and this year) that player was Jake Junis. (Replacement level is defined by a quality pitcher who should easily available on the waiver wire in a 12-team mixed league.)

The reason why I added replacement level innings is I want the rate statistics to comparable to all the other starting pitchers. If I project 80 innings and 96 strikeouts for Hill his value will be depressed against someone who’s projected to throw 170 innings.

I’ve thought about projecting what would Hill do if he threw 170 innings and then defining his value in-draft, but that process seems too subjective. But let’s take a look and see how Hill projects using both projection methods.

The Twins are paying him $3 million but he could make $9.5 million more if he makes 15 starts and/or throws 75 innings. Hill underwent elbow surgery to “primarily repair” a partial tear of the ulnar collateral ligament that he sustained in 2011. He is expected to return in June.

The contract terms signify the Twins are reasonably expecting roughly 15 starts, I’m going to back their play and project 15 starts (80 innings). Below is my projection:

Maybe I’m overly optimistic about the wins because he only averages about 5 innings per start, but the Twins should have a really good offense. However, you feel about my projections I think it is a fair projection but feel free to use your own numbers.

The question is should I project his totals as if he pitched a full season or should I add a replacement level pitcher? Let’s take a look between the two projections (below):

As you can see the projections are wildly different. A full season from Hill projects him to be my 27^th rated starting pitcher, but when I add replacement level statistics to his base rate, he becomes my 68^th rated starting pitcher.

The question where should he be drafted in 12-team mixed leagues? There are two conflicting scenarios where you could take him. One being that you have three solid pitchers on your roster and you can take a risk on him; this would be a low-risk, high upside play. The other being your pitching staff is light and you need to hit a home run with pitching later in the draft; this would be a high-risk, high upside play.

If you’re playing in NFBC the bench spot isn’t as big of a deal compared to other sites like ESPN or Yahoo. I personally don’t like having players like Hill because A) I don’t know when he’s going to pitch, if at all. B) I rather have players have high upside players who don’t currently have an everyday job but could play every day sooner rather than later.

Also, it’s possible some of Hill’s starts come in situations you don’t want to start him. For example, in Yankee Stadium. If I owned him, I would feel compelled to use him despite the poor projection for that start because I would feel like I have to use him when he’s healthy. In other words, I would feel like I have to start him because I had him on my bench for three months.

I still prefer creating projections based on the expected statistics of players and then adding replacement level statistics. In regards to Hill’s fantasy value. His value depends on what type of fantasy owner you are. If you don’t mind having a high upside pitcher who sits on your bench for three months AND he can be drafted at a reasonable price, then go for it. I personally will only look at Hill if he falls to the bottom 70’s among starting pitchers.

In investing there is something called a value trap. It’s an investment that appears to be very cheap because it is trading at low evaluation metrics like book value, earnings and so on. The investment looks too good to pass up but hidden within the numbers and analysis is further doom (like L Brands for example).

Travis Shaw signed a one-year $4 million-dollar deal with the Blue Jays and will likely be their everyday first baseman (and I presume will play some third base when Vladimir Guerrero Jr. takes a night off).

Last year Shaw’s average ADP in NFBC was 91.2 overall. Even if he repeated his good 2018 season fantasy owners were losing money/value at that ADP. (He was my 90^th hitter overall.) After looking at his brutal 2019 some fantasy owners may disregard that season and conclude he’s a value play for 2020.

The underlying statistics were so awful last year. The strikeout rate went from 18% to 33% and the contact rate went from 81% to 71%. FanSided says last year’s poor performance was all mental and the season spiraled out of control. I’ve never played baseball at any professional level, but it has to be difficult to see a .164 batting average on the big scoreboard in the middle July.

From my research Shaw didn’t have any injuries so it’s possible his issues were all mental and a blank slate will do wonders for him. However, let’s take a look at the percentage of whiffs per swing per BrooksBaseball. The whiff percentage increased nearly 12 percentage points against fastballs. That indicates A) he may have lost a tick of bat speed and was guessing at the plate, B) he lost more than a tick of bat speed or C) he abandoned his approach at the plate because of his early season struggles.

Whether Shaw is a value trap or not is dependent on where he goes in drafts. Since first base is so thin I can see many fantasy owners, when presented between Shaw versus Christian Walker/Michael Chavis/Renato Nunez, will take Shaw because he has more upside. The Brewers just signed Justin Smoak to play first base. Shaw could’ve played first base for them; the Brewers know more about Shaw than any other club and they decided to sign Smoak. Shaw can play third and second; his versatility is much more valuable than what Smoak brings. Despite all that the Brewers still decided to sign Smoak.

Unless I can get Shaw really cheap I’m not going to own him, which makes him a value trap.

All that said, what’s good about drafting Shaw is after about three weeks we should have a pretty good idea if 2019 was a fluke year or not — and that has value because if it wasn’t a fluke you can drop him and move on. If you draft Edwin Encarcion or Nelson Cruz you will have to wait until July before deciding whether to cut them or not.

Last year the Brewers won 89 games and were a couple of outs away from winning the Wild Card game. So far this offseason the biggest notable losses to their roster are Yasmani Grandal, Mike Moustakas, Jordan Lyles, Drew Pomeranz and Eric Thames.

Despite being a small market team, they’ve been buying undervalued assets/players. In the past week the Brewers have quietly made under the radar moves, at the position level, that could have a big impact on their ability to win in 2020: Eric Sogard, Justin Smoak and Avisaíl García. (They also traded for Omar Narváez who should be a really good offensive catcher.)

Based on what the top seven free agents have signed for the Market is valuing one WAR at about $5.4 million per one WAR (image below). Numbers are in millions and using WAR at FanGraphs.

Now let’s look at the three players the Brewers just signed:

In terms of WAR there is room for upside for both Sogard and Smoak. The Garcia signing looks like an overpay. Also, I don’t think there is any profit potential for Garcia on draft day which is why I’m not discussing him.

Sogard had a WAR of 2.6 last year, the best of his career at the age of 33. Most of his value came from offense. The biggest change was his hard-hit rate: 35.1%. Let’s put that number into context. There were 207 hitters with at least 400 plate appearances and Sogard is 166^th on the list or in other words the bottom 20%. Now, 35% hard-hit rate may be low, but it’s a vast improvement compared to his career beforehand. From 2011-17 his hard-hit rate was 19.7%.

Sogard has always been a high contract hitter; he’s always had contact rates 89% and higher. Last year his contact rate was 89.3% and that puts him at fourth among hitters last year. When you combine the contact rate and hard-hit rate it’s not surprising to see how well he hit last year. The Brewers are banking he can have a repeat season. I think he regresses a little, but I think he hits .277 with 16 home runs and 5-6 stolen bases. It’s too early to tell but I think Sogard leads off and if that happens, he could score 90-plus runs, which would make viable in 12-team mixed formats.

When I look at Smoak’s 2019 season I see someone who was extremely unlucky. He had the lowest BABIP of his career last year (.223) compared to .270 for his career before 2019. Last year he had the highest hard-hit rate of his career and his contact rates and strikeout rates look the same as prior years. I’m projecting a .245 batting average with 25 home runs. I am not a believer in Keston Hiura. I think he was extremely lucky last year and he’s one of my biggest regession candidates. If that happens it’s very possible Smoak hits cleanup, which, like Sogard, makes him a sneaky play in 12-team mixed leagues.

What’s the most interesting is they have too many players and not enough positions. This leads me to believe the Brewers are going to constantly rotate players in and out of the lineup (except for Christian Yelich and Hiura). With Lorenzo Cain and Ryan Braun it makes sense to give them more days off; to use overused clichés it should keep them fresh and most importantly, healthy to play a full season. The constant rotation of players means it’s going to be frustrating to own Brewers hitters, but it looks like the Brewers are A) creating one of the deepest benches in the National League and B) acquiring undervalued hitters with low financial risk.