Over the last couple of weeks, Jay Persson of FantasyLabs has been running a fantastic bankroll-building video series in which with each volume he explores a key concept. For instance, in Volume 1, Jay touches on the importance of bankroll management and game selection. And, in Volume 2, he discusses the need to analyze and fine tune the processes one uses. I recommend that you watch this series starting with Volume 1 — it’s a great tool, especially for players without much experience — and I will use the lessons and themes of Volumes 1 & 2 as the collective springboard for this article. Also, Volume 3 is now out here.
This is the 22nd installment of The Labyrinthian, a series dedicated to exploring random fields of knowledge in order to give you unordinary theoretical, philosophical, strategic, and/or often rambling guidance on daily fantasy sports. Consult the introductory piece to the series for further explanation.
Volume 1: Funding Your Gushers Habit
A few weeks ago, I wrote about the power (and myth) of DFS diversification. I want to revisit that topic here and apply it to the concepts Jay puts forth in Volume 1 of his series.
In his video, Jay discusses such key topics as the percentage of a bankroll to put into play each slate, the cash game/tournament ratio to employ, and the chief benefit of head-to-head games. For those who are newer to DFS, Jay recommends putting around 10 percent of a bankroll into a slate, and then having a 90:10 ratio between cash games and tournaments. Starting with a bankroll of $100, Jay puts $10 into play, with 90 percent of that going into H2H games (five $1 contests and two $2 contests) and the remaining 10 percent going into a $1 tournament.
In particular, Jay says that the reason he plays H2Hs is that doing so helps to diversify his opponents and limit risk. He’s right, and we should explore specifically how and why H2Hs are the preferred cash games for many players.
The Power of DFS Diversification in Cash Games
For one, H2Hs are readily available in a variety of denominations. You can always create H2Hs without worrying about “getting into a contest,” and you can play H2Hs at low denominations, enabling you to spread your cash game funds across as many contests as possible. Not only will this diversification allow you to limit your exposure to particular opponents but also (and more importantly) to particular lineups.
For instance, if you play in a $10 H2H, you could have a good lineup but lose because you were matched up against a great lineup. But if you play in 10 $1 H2Hs, you might face that same great lineup only once, in which case you might lose only $1 and win $9.
Additionally, the players who partake in the H2Hs of lower denominations (in comparison to those who player at higher denominations) tend to be less likely to produce high-scoring lineups on a regular basis. So not only does playing H2H for smaller money amount per contests provide more diversification but it also generally means that you have a greater per-game chance of cashing.
Further, the real benefit of playing H2Hs — especially for beginners, but even for experienced players — is that one competes against only one other opponent in each contest. For instance, if one plays in 10 $1 H2Hs and has below-average production from the cash game lineup, one still might win $3 or $4.
If, however, one plays in 10 $1 50/50s (in which half the field cashes) or double-ups (in which the winners double their buy-ins), then one would likely lose most if not all of the investment with a below-average showing, because one is competing in a larger field against at least several opponents at once. In 50/50s and multipliers (whether those are double-ups, triple-ups, etc.), not only is the cash line sometimes higher than it is in H2Hs, but a poor showing dooms one to radical losses.
At the same time, if one is a consistently strong cash game player, then competing in multi-opponent cash games instead of H2Hs makes sense, because one would have a much great chance of cashing. For instance of one almost always finishes well enough to win 80 percent of H2Hs, then in a larger field (such as a 10-person 50/50) one would have a win rate of close to 100 percent. In this scenario, one could still be thought of as diversifying, because one would be spreading risk across a larger pool of opponents within a contest.
So within cash games you can certainly benefit from DFS diversification. It all depends on the type of player that you are. If you are a beginner and perhaps likelier to have inconsistent performances, H2Hs can minimize your risk over an extended number of slates. If you are a more consistent and high-scoring player, than 50/50s, double-ups, and maybe even triple-ups can minimize your total risk over a number of slates. Ultimately, the cash game diversification you need depends on what type of player you are.
As we see in Volume 2, Jay didn’t have a great showing in his first slate, but he was still able to avoid massive losses because he played 90 percent of his action in H2Hs. That’s a really important lesson. When you are looking to build a bankroll, the key to success is to follow the first rule of value investing: Don’t lose money. And the best way to abide by that rule is to diversify your action in a manner appropriate to your ability as a player.
Volume 2: As Fun as NBA Jam
In Volume 2, Jay addresses the importance of reviewing one’s processes so that one can improve. Specifically, he says this near the beginning of the video:
So looking back, kind of touching up a little bit more on the first video: Here at FantasyLabs, something we really do is stress process over results. So I definitely don’t want to be too results-oriented, especially after just one night, but that doesn’t mean you can’t refine your process or at least look back and see if you made any mistakes.
So on this first night, if you watched the video, I think that I should’ve tried harder probably to get Khris Middleton in versus the Rockets — he was definitely discounted enough on [DraftKings] — and then I think I should’ve tried a little bit harder to not settle with D.J. Augustin. I know that it’s a very tight-pricing site, but you know he’s a bench player and it was not a good matchup or really game flow for him to have a big game in that one.
So I think being cognizant of your process and kind of understanding that you can always improve — I think that goes a long way to ensure success and especially longevity in DFS. [. . .] Definitely one of the most important and underrated aspects in DFS is realizing when you make mistakes: You have to accept those mistakes and then work on improving these mistakes.
Jay once again is right and it’s worth exploring the implications of his guidance.
DFS Triangulation and the Mitigation of Variance
Several ways exist through which one can improve process and performance. In Volume 2, Jay focuses on player selection, which is immensely important. Strategy can only get you so far. If you aren’t selecting strong plays for your lineups, eventually that will catch up with you.
But a focus on player selection shouldn’t prevent us from also considering other ways of improving our processes. For instance, let’s say that you were in Jay’s situation in Volume 1. You liked most of your cash game lineup but wanted to use Middleton and couldn’t find a way of fitting him into the lineup without making it a substantially different lineup. Let’s also say that, like Jay, you weren’t thrilled with Augustin but didn’t see any other real options for creating most of that lineup without using him.
In such a situation, there’s a solution that is fairly straightforward but often overlooked: You could build a second lineup using several of the key players in the first one, and then you could use them both in your cash games. In part, this strategy can serve to mitigate potential shortcomings or lineups construction issues you have when it comes to player selection. And more importantly using multiple lineups can mitigate variance, which can negatively impact your lineups even when you make players and lineup decisions that are sound.
In fact, it’s possible that in many slates multiple-lineup usage should be a standard method of mitigating variance and risk — and in these instances it might be better to use three lineups instead of two. With two lineups, it’s not uncommon for the two lineups largely to cancel each other out. That’s not to say that using two lineups is bad, especially since in this scenario the losing lineup could’ve been the first one — the one you otherwise would’ve used in 100 percent of your cash game lineups — so at least you have limited your downside. Also, even with two lineups it’s not uncommon for there still to be a few players you’ve identified with our Trends tool as being good plays but whom you couldn’t into your lineups.
But with three lineups, which can all be easily made using our Models and optimizer, you are usually able to get all of the players you want to use into your various lineups, and you also are much less likely to have your lineups cancel each other out. If you have two winning lineups, your one losing lineup usually won’t be bad enough to prevent you from turning a profit. And if you have two losing lineups, your one winning lineup usually will be good enough to keep your total slate from being a train wreck.
What happens if all three lineups suck? The exact same thing that would’ve happened if you had started only one of those sucky lineups. And what happens if all three lineups rock? The same thing that would’ve happened if you had used only one of those lineups in isolation — except with much less risk assumed in the process.
Oliver Stone — When He Was Still “Oliver Stone”
You wouldn’t know it if you saw his most recent feature film Savages, but Oliver Stone used to be a decent director. (In all fairness, any movie is beyond directorial aid when it stars Tim Riggins from Friday Night Lights and Bridget Vreeland from boyfriend-slayer The Sisterhood of the Traveling Pants.)
The 1980s and 1990s were especially strong for Stone, who seemed to direct an epic on average every three years, with Platoon, Wall Street, Born on the Fourth of July, The Doors, Natural Born Killers, Nixon, and Any Given Sunday — the last of which might be the best unrealistic sports movie of all time.
My favorite Stone film of this era, since I first saw it, has always been JFK. At the time, I liked it because, being from the Dallas-Fort Worth area (where the movie was filmed), I just randomly happened to have as the person who cut my hair one of the women who did Kevin Costner’s hair on the set of the movie. What kid doesn’t like having his hair cut by the woman who does the hair of the guy who is the Prince of Thieves?
Later, when I got into Seinfeld, my affinity for JFK only deepened when I saw the “The Boyfriend” episode with Keith Hernandez in which the sitcom spoofed the famous “back and to the left” courtroom scene from the film.
And here’s where I will return to something that matters.
In that scene, lawyer Jim Garrison (played by Costner) mentions that President John F. Kennedy is shot in a particular location because it allows for three riflemen all to have clear shots at him simultaneously from three distinct locations. The particular term he uses to describe this scenario is “the triangulation of fire.”
I was struck by that concept as a boy, and years later that is one of the few concepts from the movie that I can still clearly recall. And I remember even now the thought that I had way back then: “Triangulation. That’s really useful. If I ever hire three people to off someone someday, I’ll tell them to use the “triangulation of fire.”
For a kid who saw Oliver Stone movies at way too young of an age, I promise that I was fairly normal.
The DFS Version of the Triangle Offense
Triangulation might not be the most efficient use of DFS bullets, but it’s a great way of ensuring that you don’t totally miss your target. It greatly limits your downside.
One very valid objection to the strategy is that it limits your upside. And that’s totally correct. It does. To me, that’s fine. For one, playing cash games is not about upside anyway. Rather, it’s about the steady accumulation of production, and that concern lends itself to the desire to limit downside.
Additionally, if the goal is to build a bankroll and if cash games are the primary means through which one wants to accomplish that feat, then limiting downside is even more important.
In general, building a bankroll is not about upside. It’s not about building a one-year lump of money in a matter of days. Rather, it’s about limiting downside so that one can sidestep variance in order to benefit from the consistently applied skill that one possesses.
As Nassim Nicholas Taleb writes in The Bed of Procrustes, “Robustness is progress without impatience.” To build a robust bankroll, one must embrace a philosophy of patience. For at least some DFS players, a key strategy in the enactment of that philosophy should probably by triangulation.
It’s easy to believe that triangles shouldn’t exist in the labyrinth’s circle. Maybe that belief is why you haven’t found the triangles.
The Labyrinthian: 2016, 22
Previous installments of The Labyrinthian can be accessed via my author page. If you have suggestions on material I should know about or even write about in a future Labyrinthian, please contact me via email, [email protected], or Twitter @MattFtheOracle.