Jonathan Bales is the author of the Fantasy Sports for Smart People book series, most recently Fantasy Football for Smart People: How to Win at Daily Fantasy Sports.
Follow him @BalesFootball.
I used to be literally the worst guy in the world when it came to talking to girls. Zero game. I’d completely clam up and not even be able to speak.
I’m still awful, but now I’m maybe just bottom-10 in the world instead of dead last. I moved up the ranks because I started to at least speak. In the past, I would be so scared that I wouldn’t even attempt to pick up a girl. I might have wanted to go talk to a girl so badly, but my mind just wouldn’t let me do it.
I let my fear get the best of me.
One of my favorite writers—someone I mention a lot here—is James Altucher. He recently wrote an article on the difference between fear and growth-based decisions.
I met a friend of mine. She said, “My grandma told me there are only two types of decisions: Decisions made out of fear and decisions made out of growth.”
For instance, do you stay in your job because you are afraid you won’t get another job? Or do you stay in your job because you are excited about the growth potential there?
Do you stay in a relationship because you are afraid you won’t meet someone else, or you are afraid it will be bad for your kids, or you are afraid of hurting someone else?
Or do you stay in a relationship because you are truly grateful the other person is in your life (and hopefully, vice versa).
Every decision I have made has either been fear or growth.
Not just big decisions but even the smallest decisions.
And the fear-based decisions never worked out for me. When I made a fear based decision it was always because I was giving power to someone else.
I’d make a fear-based decision out of insecurity. Out of a feeling of scarcity. Out of giving too much power to others so they would control my life.
The growth-based decisions all resulted in miracles I could not have imagined.
I think this is very applicable to daily fantasy sports—a game in which we’re forced to make all sorts of decisions every day. And just like in “real life,” these choices can either be fear-based or growth-based.
What do fear-based decisions look like?
As is typical, the philosophies I’m discussing are based around tournaments. I think cash games require a dramatically different approach that, many times, involves actually following the consensus. I’m a big believer in a “wisdom of the crowd” approach to head-to-heads and 50/50s.
In tournaments, though, it is really easy to let others’ opinions affect your own in a negative way. When I first started playing DFS, I rostered so much chalk in tournaments because I was scared to 1) make decisions for myself when others thought I was wrong and 2) get crushed by a high-owned player who went nuts.
It’s 100 percent true that fading chalk is volatile. When you fade Antonio Brown when he’s 50 percent owned and he goes off (whoops), you’re going to have a hard time coming back from that. And that’s just sort of a natural way of thinking about it: “Oh man, if I don’t roster Brown and he does well, I’m going to be in a really bad spot.”
But the opposite is also true, right? When you fade a high-owned player and he does poorly, you immediately have a leg up on the field. And because of the top-heavy payout structure of GPPs, that’s more beneficial than being behind the field is bad. The payoffs are asymmetrical; there’s a massive difference between 1st and 10th in a GPP, but no difference between being in the 25th percentile and dead last.
We actually see something similar in the NFL with teams continually not going for two points after a touchdown and punting on fourth down in opponent territory. Coaches fear what will happen if they make a decision that doesn’t fit with the status quo and it doesn’t work, and that fear dictates their decision-making.
I’ve found an effective way to figure out if you’re making a fear-based decision is to analyze the decision from the opponent’s angle. When the opponent of your favorite team has a 4th-and-2 at your team’s 45-yard line, do you want them to go for it or punt? PUNT! It’s so obvious, right? We’d never want to the team to go for it because we—and I’m including NFL coaches here—know deep down it benefits the defense if the opponent punts. But when facing the fear of failing while on offense, the correct choice becomes less obvious, and coaches often end up punting even when they know it isn’t +EV.
GPPs inherently favor growth-based decisions—strategies that are high-variance and fly in the face of the fear-based crowd—even more so than in most other areas.
Maximizing the Frequency of Cashes
So why do people make fear-based decisions? My belief is that it’s because it maximizes the frequency of positive events, i.e. playing chalk increases cash rates in tournaments.
Based on my game history, I’ve found this to be true; my cash lineup cashes at a high rate in GPPs, but almost never finishes extremely high. My GPP lineups, on the flip side, have an inordinate number of top-five-percent and bottom-five-percent finishes. They don’t cash as frequently as my cash-game lineups, but when they do cash, the average finish is much higher.
Because of the way I approach DFS, I tend to have more losing days than many other players. That sucks, right? It doesn’t feel good, and I think a lot of people fear that. It can be demoralizing at times when you feel like you’re doing the right thing and you lose a few days in a row.
In my opinion, a contrarian tournament approach doesn’t maximize the frequency of cashes—it doesn’t maximize how often you feel good—but it does maximize ROI. Antifragility is a volatile approach to DFS, but the most profitable if you can withstand the swings.
And the reason it’s profitable is because of others’ fear. Everyone is trying to improve their odds of cashing. Almost no one is trying to maximize the probability of winning.
Warren Buffett said “Be fearful when others are greedy and greedy when others are fearful.” That’s a great motto for how you should approach daily fantasy tournaments. The public plays with fear. If you can make consistent growth-based decisions that are designed to leverage that fear and the inefficiencies it creates, I believe you can significantly enhance your profitability on DraftKings.