Avoid the herd mentality

If you’re a regular reader of Doubting Thomas, you know that I was a financial advisor for more than 30 years. Before I became a fee-based advisor, I traded stocks for clients and my own portfolios. I read thousands of stock reports and recommendations from so-called experts in the industry, and this inevitably affected my decisions on what stocks to buy and sell.

The financial industry is just one of many peer groups where herd mentality is evident. In the case of investments, herd mentality is the investors’ tendency to do what other investors are doing. This is also true of stock brokers and portfolio managers who track the behavior of their peers. They have a tendency to follow the herd and buy the same stocks in their portfolios.

Let me give you an example. If I am managing a large cap growth stock portfolio, I am going to feel pressure to own a significant number of Apple shares – even if the stock’s P/E ratio of 30 is too high by historical stock market standards. My instincts tell me that the stock is due for some negative regression, but I’m afraid to not own the stock because the herd might be right.

You might be wondering what this has to do with fantasy baseball, so let me connect the dots. Having worked in the fantasy baseball industry for the past three years, I see how peer group pressure and the herd mentality often dictates the players consistently recommended by the analysts and pundits and also the ones being faded. Unfortunately, the herd can be wrong.

To illustrate this point, I’m going to discuss two players on my TGFBI team. One had a lot of helium heading into draft season, while the other was a popular fade. If you drafted Chris Sale, you probably recall the industry’s love for the Boston Red Sox hurler. You might also recall that the same peer group had very little love for Texas Rangers slugger Adolis Garcia.  

“At this time last year, Justin Verlander was the longtime ace who I thought was being unfairly dismissed coming off surgery, and he went on to win the AL Cy Young. But Sale is so far going 60 picks later in drafts. Like Verlander last year, a strong spring could send Sale’s cost soaring, so if you can get in before his prices rises, take advantage,” a popular analyst wrote. 

(“Adolis) Garcia delivered again in 2022, slashing .250/.300/.456 with 27 HR and 25 SB over 657 PAs. Despite that, you’ll find him on fade lists this season because his plate approach is terrible. His 40.3% chase rate indicates too much flailing outside the strike zone, and the resulting strikeout numbers are ugly and create real batting average risk,” another analyst wrote.

It’s still April, but I can tell you that I’m very happy that I broke from the herd and drafted Garcia with the 69th pick. As I write this, Garcia leads the majors with 29 RBI, is tied for fifth with seven home runs and tied for sixth with 20 runs scored. And his .255 batting average is right in line with last year’s average. Garcia’s success has helped boost me into the top 10 in TGFBI.

On the other hand, I must admit to a severe case of buyer’s remorse after taking Sale in the 10th round. I knew Sale hadn’t been good since 2018. After a disappointing 2019 season, he underwent Tommy John surgery. He had pitched less than 50 innings since then, always seeming to be injured, but the analysts loved him. Instead of trusting my gut, I bought into the hype.   

After five outings, Sale has one quality start, an 8.22 ERA and a 1.74 WHIP. I’m sad to say he was in my starting lineup Monday night when he surrendered five runs on nine hits and a walk across five innings without striking out a batter. After being staked to an early 4-0 lead, he suffered his second loss. The loud contact was deafening in Oriole Park at Camden Yards.

There’s a lesson to be learned from both Garcia and Sale. Do your own research and draw your own conclusions about the players being drafted before you add them to your fantasy team. Don’t be afraid to select a player the pundits hate if you really like him. And don’t hesitate to pass on a player if you have reservations about him – even if the whole world loves him.

Thomas L. Seltzer, AKA Doubting Thomas, writes about baseball and football for CreativeSports. Be sure to follow Thomas on Twitter @ThomasLSeltzer1.

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