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Posted by Derek Carty at 11:56am

Friday, April 25, 2008

Trade strategy: Feigning weakness

All warfare is based on deception. Therefore, when capable, feign incapacity; when active, inactivity. When near, make it appear that you are far away; when far away, that you are near. Offer the enemy a bait to lure him; feign disorder and strike him... Pretend inferiority and encourage his arrogance.

—Sun Tzu, The Art of War

While all of this applies to my point, the phrase I'd specifically like to draw to your attention is "when capable, feign incapacity." By "capable," Sun Tzu means strong. As you are reading a site like this, there's a pretty good chance you're a strong fantasy baseball player. You care enough to read about numbers like BABIP and LOB percentage and about strategies such as this.

An opponent who knows you are strong, though, is not necessarily one you should revel playing against, given the choice between him and one who is unaware of your strength. That's not to say you shouldn't play in leagues with people who know you (these can be the most fun), just that you are at a bit of a disadvantage in these leagues. Today's strategy is going to focus on leagues where your competitors don't know you, or in leagues where most do but there is a new owner or two joining the league.

Natural instinct

Think about it this way. Say you are being forced to engage in a physical fight with someone, but you have the choice of who you will face. You can choose a fat, weak, pathetic-looking guy or a big, strong, athletic-looking dude. Holding all else constant, who would you choose? Of course, you would choose the smaller, less mobile of the two, regardless of your own strength or mobility.

We see this same process occur in nature. Lions hunt animals like wildebeest, impalas, zebras, buffalo and warthogs. They also happen to share a continent with the jaguar. While, presumably, jaguar meat would be just as filling to a lion, it makes little sense to engage in a more difficult challenge when more helpless animals like zebras and warthogs are available. It's only natural to feed off the weak.

Throw in some psychology...

The same logic applies to fantasy baseball. Why would someone want to trade with a strong competitor when weaker ones are available? Even worse is that in fantasy baseball, we are dealing with humans, and psychological factors come into play. Not only are people more more likely to seek out weaker targets, they're often less willing to trade with stronger targets.

Suppose you're sitting at a poker table and the guy across from you puts out a big bet, looking quite confident in himself. Assuming you're playing in a universe where there is no such thing as game theory, bluffing or psychology, you are going to need to have a very strong hand yourself to call his bet. Better yet, say he flat-out shows you his cards, and they do indeed make a fantastic hand. In all likelihood, you are going to avoid confrontation with him and fold.

By acting like a strong player in fantasy baseball—maybe by showing off your knowledge or bragging about your credentials or declining trades using complex stats as your reasoning—you are essentially showing your competitors your hand. Sometimes this is unavoidable, but if not, why on earth would you do that? Sure, maybe you'll massage your own ego a little bit and feel superior for a minute, but you will feel a much greater sense of superiority by laying low, making excellent and well-timed moves, and eventually outsmarting everyone to win the league.

Let's take a look at some examples where feigning weakness worked to perfection.

The Trojan Horse

Consider the story of the Trojan Horse, a story I'm sure most of you are familiar with. The Greeks at Troy understood that "warfare is based on deception." Odysseus ordered a large, magnificent-looking horse to be built, with the insides hollowed out. He would have Greek warriors hide inside of it, and those who didn't were to sail away on the ships.

This signaled to the Trojans that they were defeated—"(feigning) incapacity"— and the horse gave the illusion of a present given to the superior side as a sign of good will. As Sun Tzu would say, the Greeks "(encouraged) their arrogance."

Once the Trojans accepted the gift, the Greeks waited until nightfall and emerged from the horse. They caught the Trojans by surprise and made quick work of them. By pretending to be weak, the Greeks used deception to overcome their enemy.

Napoleon and the Battle of Austerlitz

Napoleon Bonaparte was in a war against the Austrians and Russians. Due to some bad weather, tired troops and mistakes by his marshals, Napoleon found himself in a bit of trouble. He was outnumbered two to one, had hostile armies to all sides, was facing bad weather, and had tired men short on supplies. There was also the growing possibility of the Prussians joining the alliance against him and the English invading France. Napoleon had to get creative.

Reports reached the alliance (Austria and Russia) that Napoleon had moved most of his army to Austerlitz, occupying the Pratzen Heights. This indicated to the alliance that Napoleon was preparing to fight. Soon after, though, Napoleon abandoned the Pratzen Heights and was seen repeatedly repositioning his calvary. This sent the message to the alliance that he was confused.

Napoleon then sent a request to speak with the czar. Instead, an emissary was sent to speak with him about a possible armistice. When he returned, the emissary told the czar how visibly nervous Napoleon seemed. He said that while Napoleon didn't immediately accept the armistice due to the harsh terms, he listened intently, looked intimidated and seemed eager to get a deal done.

The alliance moved on Napoleon, whom they believed to be weak and out of sorts. Trying to finish Napoleon off completely, they over-committed themselves.

Napoleon managed to carefully maneuver his troops (including a large force he hid behind the Prazten Heights, out of sight) to not only retake the Pratzen Heights, but to completely isolate each of the armies that were surrounding him from each other. He even forced one set of them to retreat into frozen lakes in marshes where most of the troops died. Later that day, after the alliance had lost a large number of its troops, a truce was called. Furthermore, the Austrian-Russian alliance disintegrated, and the campaign was over.

This story sounds a lot like a line in the Sun Tzu quote used to lead off this article: "feign disorder and strike him." By feigning weakness, Napoleon was able to turn a situation where the odds were against him into a swift and complete victory.

Fantasy baseball implications

The lesson to be learned here is to keep your ego in check, for the time being, and pretend like you're not a threat.

I've found in one of my leagues this year that at least two owners are very reluctant to trade with me, having learned of my current position with the Hardball Times and Rotoworld. They see me as a large threat (sorry for tooting my own horn here; it's not my intention; I'm just trying to prove a point) and, presumably, feel that my judgment trumps theirs. Therefore, even when we're talking trade and they informally offer me something, if I say that I would accept it, they back out. They think that, because of my strength as a player, I must know something that they don't.

If you manage to get a large target on yourself, there will be owners who will constantly second guess themselves when dealing with you, always thinking that they're missing something. I hinted at this in my article about evaluating your opponents. If you notice that outside the game of fantasy these players tend to display even a hint of insecurity, this could lead to them being insecure in dealing with you if they know you are strong.

I will continue to try to trade with these players this year (though I will spend less time on them than I will with other owners who are unaware of my position), but I will need to get very creative to swing a deal. I'll somehow need to make them think they are getting the better of me or force them to make an official offer that they cannot back out of. Not an easy task.

Reconsider our poker example, but now assume that we're in this universe, where game theory and bluffing are fully allowed. Pretend that we are sitting at the table and have a very strong hand. We act weak, though, to get our opponent to bet. Once he does, we have him exactly where we want him.

How to proceed

If you're dealing with a weak player, you probably don't need to go out of your way to make him think you are weak. Since he is weak himself, he probably isn't evaluating you too critically, so simply not acting out can be enough to fly under his radar.

If you're dealing with a strong player, things get a little trickier (as is usually the case). Since he likely is evaluating you, you might need to do some things to throw him off the scent, especially if you're typically an active trader. If he sees you rob a couple of owners blind, he might begin to think you're a strong player. That's not to say you shouldn't rob other owners blind, just that you will need to also send out some false signals to try to counteract these strong ones (and hope he doesn't realize what you're up to).

One way to do this might be to send him a ridiculous trade offer. Depending on the person, you can make it really outlandish, like Hideki Matsui for Matt Holliday, or you can be a little more discreet. Maybe his team is full of stolen base guys, so offer him up a relatively fair "value trade" in which you would be giving him another stolen base guy. If he truly is a strong player, he will realize that you didn't spend much time looking at his team to see what he actually might want.

If he's not quite so strong that he is going to be evaluating your every move this way, just try talking to him. Start up a conversation about baseball in general, about different players you like and don't like. When you do, be sure to make some comments that, if someone said them to you, you would think less of him as a competitor.

If it were me, I might say something like, "Gavin Floyd is so good. I saw him play in the minors a bunch of times and always knew he could pitch like this. It's great to see him finally doing it. I need to talk to so-and-so about trading for him."

A strong opponent might see this and think, "Okay. He clearly doesn't understand anything about regression to the mean because Floyd has a .161 BABIP. He also seems to know little about the strong effect strikeouts and walks have on ERA; Floyd's K/9 and BB/9 are both in the 4.00s. He also doesn't know how to keep his emotions in check because he seems to have strong feelings about this player because he saw him play in the minor leagues and formed an attachment."

If someone says this to me—ignoring the possibility that he is trying to fool me—I'm going to consider him a weak player. So will your opponent if you play it right. Even better is if you can throw in a few cliches. "That guy is so clutch. He's gonna get the RBIs when it matters" or "that pitcher has great stuff."

Adaptability

While talking about Gavin Floyd in this way would certainly make some players think less of you, there is the possibility that you're facing a strong player who really does think Floyd is good. I'm not sure how he would be evaluating Floyd to come to that conclusion, but the point is simply that you need to adapt to your opponents. No single approach will ever work against everyone, so be creative and you'll be fine.

Believability

Try not to come across as a complete idiot. You need to be believable, or else your opponent may see what you're trying to do and think of you as an even stronger opponent than if he simply knew that you evaluate players well.

Also, if you end up making a few really good trades, he might start to catch onto your game. At first he might consider you lucky or consider the trade one that just about anyone would make, but after a while you're really going to need to be careful.

Keep making these excellent trades, though. After all, you're probably making them with weak opponents. Don't sacrifice trades with weak opponents to set up a slightly above-fair-value trade with a strong opponent down the line. But if you can do both, why not?

Concluding thoughts

I hope this advice isn't coming too late for some of you, but this is definitely an approach that I think could really help your trade equity if used properly. If you have questions, feel free to send me an e-mail.