“I’m a big believer in the long game. I think most people optimize for right now and it’s +EV simply to make decisions based on what’s most beneficial down the line.”
— Jonathan Bales, “Should You Work for Free?”
On his personal blog (www.JonathanBales.com, which I refuse to link to for fear that it’s a potential breeding ground for random computer viruses), FantasyLabs Co-Founder Jonathan Bales wrote a piece a couple of months ago about the virtues of working for free in the fantasy industry. (I also wrote a Labyrinthian on the topic.)
Most of Bales’ thoughts on the subject can be boiled down to this core idea: Many activities that are good for us over the long term yield negative short-term expected value. As examples, Bales highlights reading, sleeping, and working out:
All stupid uses of time if your goal is to optimize your day, but all some of the most vital aspects of creating long-term happiness/wealth/well-being. If the question is “How can I extract maximum value out of today?” you probably shouldn’t work out, for example. It sucks ass. I’ve tried it. Not fun. But if the question is “How can I create the most value for myself (happiness, money, however you want to define ‘value’) in, say, 2019, then you should probably create a long-term foundation for success, with reading, working out, and getting rest being among the most +EV things you could possibly do.
About a month ago I wrote a piece about how to be a +EV Labs subscriber. Other than everything put out by Bales and Peter Jennings (CSURAM88), everything on our Premium Content Portal, the Breakdowns written every day by Bryan Mears and J.J. Calle, and most of the pieces by ‘Sheriff’ Bill Monighetti, my +EV process piece was probably the best content Labs has ever published.
In this current piece I want to follow up on some ideas from my earlier piece by placing them in the context of Bales’ short-/long-term EV perspective.
How to Be a +EV Labs Subscriber
I think you should consult my earlier piece on the topic — again, it’s probably the greatest thing anyone anywhere has ever written — but I do want to give you a big-picture overview of that piece. In general, +EV Labs subscribers regularly accomplish these three tasks:
- Get as much Bales & CSURAM88 as possible
- Treat the subscription like a product, not a service
- Learn new sports and diversify their action
Now, here’s the catch: These three activities all have a long-term scope. When Bales and CSURAM88 do content, they’re typically talking about one of the Labs Tools. For instance, even when Peter talks about particular players in a given slate, he often does so through the perspective of his personal Player Model. When you treat the subscription like a product, you use our Trends tool to discover the historical Plus/Minus values of whatever situations intrigue you. When you learn new sports and diversify your action, you invest a lot of time into studying a new niche ecosystem and analyzing your DFS process.
All of these activities require time. That’s the hidden secret to the +EV mindset: It’s about allocating time in a way that yields the most value over the long term, since +EV thinking is long-term thinking. Even if there are days when you don’t do what’s best for you in the long term — such as reading, sleeping, and working out — you could still have the long term in mind. You could still be acting optimally by accomplishing short-term tasks now that will benefit you immensely later.
One way or another, people who think about +EV are always looking down the road even if they’re most focused on just the next couple of steps.
An Example: Goldman Sachs
One of my New Year’s resolutions was to read more, and over the last 104 days I’ve read at least seven or so pages out of 10 different books, so I’m #crushing. One book I recently stole from Barnes & Noble is called How the Wise Decide, by Bryn Zeckhauser and Aaron Sandoski.
The book’s introduction has an anecdote about Goldman Sachs. In 1974 Morgan Stanley helped one of its clients do a hostile takeover of another company, and all of a sudden mergers (friendly and otherwise) were very popular. Goldman Sachs Co-Chairman John Whitehead had to decide whether his investment bank would follow suit and offer hostile takeover services to its clients.
Here’s what Zeckhauser and Sandoski write about it:
Whitehead knew that helping clients make hostile tender offers would be enormously lucrative. And anyone not taking part in the merger mania risked being relegated to the second tier of investment banking. Yet to Whitehead, it didn’t seem as if his competitors were really helping their clients. Many of the hostile deals were turning out badly for both the acquirer and the target company. . . . Whitehead believed it just wasn’t good business.
Whitehead made his decision: Goldman Sachs would not offer its services to any company to make a hostile tender offer. He wanted the firm to be known as “the investment bank of integrity.” . . .
The repercussions of that decision and its public announcement were immediate. A client company turned away from Goldman to retain another firm to help it launch a hostile bid. Goldman’s competitors were soon posting record profits on the large transaction fees that flowed from hostile deals. . . . But Whitehead remained steadfast: Goldman was the firm of integrity.
Then something unusual happened. As word of Goldman’s stance spread, companies threatened by hostile bids turned to Goldman as the firm of choice to defend against the unfriendly offers. . . . It didn’t happen overnight, but Whitehead’s decision to stand firm against making hostile offers set it apart from its competitors and created an enormous demand from companies that wanted to do business with a firm of integrity. Whitehead’s decision to eschew hostile takeovers and forgo the lucrative paychecks has become Wall Street legend. It cost Goldman at first, but eventually created an aura around the firm that has elevated it to preeminence on Wall Street.
In the short term, Whitehead’s decision resulted in -EV for Goldman. Over the long term, however, his decision to be contrarian made Goldman the only truly unique investment bank in the United States.
Side note: It’s kind of funny now to think of Goldman as “the investment bank of integrity,” but there are a couple of ways to think about this:
- Whitehead was sincere, and his long-term focus on integrity was +EV.
- Whitehead was insincere, but nevertheless his long-term strategy to pretend to have integrity was +EV.
Either way, Whitehead was willing to sacrifice short-term profits for long-term dominance. Being a +EV thinker demands that one consider how present decisions (and often sacrifices) impact future potentialities.
“The Long Road”
Yep, that’s a reference to Pearl Jam. I haven’t bought a Pearl Jam album in about 15 years, but, sure, I’m a fan. If you’re wondering if you’re the only person in the world who thinks that Merkin Ball still holds up 22 years after it was released, 1) you’re old, 2) you’re not alone, 3) well, technically, you might be alone in the world, but) you’re not alone in that opinion.
Pearl Jam was inducted into the Rock and Roll Hall of Fame a week ago. They were admitted to the Hall in their first year of eligibility — 25 years after the release of their first album, Ten. They were the last of the four major Seattle ’90s bands to form and have a hit song, and yet the four instrumentalists who first met singer Eddie Vedder during the Temple of the Dog studio sessions in 1990 are the same four who back Vedder in Pearl Jam today. That’s the long road.
Almost anything that can help you become a better DFS player will require you to make an investment of time. It’s not as easy as buying some bullsh*t lineups from shady Twitter accounts or listening to a “here are the picks” podcast, but deciding to walk the DFS long road is probably more rewarding.
Being a +EV DFS player is about having a long-term strategy in how you use your bankroll, research for slates, build lineups, and approach contests. It means knowing that short-term losses are just existential expenses on the balance sheet of long-term profits.
Deciding to walk the long road is how one becomes a long-term DFS player.
The Labyrinthian: 2017.36, 131
This is the 131st 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. Previous installments can be accessed via my author page or the series archive.