I used to trade stocks for a living. I started out as a market maker for NASDAQ stocks right before the internet bubble then traded my own account for over 10 years. After the kids were born, I transitioned from day trading to more longer-term, position trading. With the recent euphoric market, the day trading hat is back on. With that said, there are so many things I’ve learned from trading, mostly about human psychology but that’s a discussion for another day. The one tenet that became very important for me was price discovery. Where were buyers and sellers willing to transact and at what price would there be an equilibrium. You can glean a ton of information from watching the action and identify spots of support and resistance, which I used to limit risk. If buyers were no longer willing to support a stock at a certain price, then something has changed and it’s best to get flat and reassess. Vice versa on the sell side. The closer I could buy or sell to these spots, the more information I would have and the easier I’d be able to identify if I was wrong, saving me money in the long run because all trades are not winners. For example, say a stock was trading in the $10 to $12 range. After watching the action, buyers would always step in at $10 and sell at $12. So, buy at $10 and sell at $12, right? I wouldn’t want to buy at $12 because I know sellers are stepping in there, so what’s the point? If the price broke through $10, then I’d know it’s probably going lower and if it went through $12 then it’s probably going higher. In that scenario, I don’t mind paying over $12 once I got confirmation that the sellers there were cleaned out. The bigger the sample size the better the information. This is a simplistic example but you get the point.
The same concept applies to fantasy baseball. Cost is draft capital or auction dollars. There are ebbs and flows dependent upon player performance and human expectation. The more data we have, the better we can assess the situation. How many times have you seen it? Player has a huge year and is bid up the following draft season, only to disappoint, then becomes a bargain for those willing to invest, providing a great return on investment. Our goal is to buy players at a discount so we can profit to the upside and if they disappoint, then the negative impact is mitigated somewhat.
Whew. Sorry about the long intro. Got carried away there. Anyways, Gleyber Torres has been an interesting player to me over the years. I was never that into him, despite the 38 home runs and decent numbers all around. Maybe it was the late-second round ADP last year. Regardless, he’s now being drafted in the 69 to 105 range. Is this the time to buy?
Torres is only 24 years old. The Cubs signed him as an international free agent in 2013. They traded him to the Yankees in 2016 and he made his MLB debut in 2018. He produced 24 home runs with six stolen bases in 484 plate appearances. The walk rate was 8.7%, strikeout rate was 25.2%, ISO was .209, and slash was .271/.340/.480. The following season, he mashed 38 home runs in 604 plate appearances. The strikeout rate went down and ISO went up.
Then things went horribly wrong last season. The ISO cratered to .125 and slash went to .243/.356/.368. The walk rate spiked to 13.8%, though, and strikeout rate plummetted to 17.5%. Hmmmm. Let’s dig in.
Looking at the batted ball data, he hit more ground balls and fewer fly balls. The hard-hit rate went from 39.5% to 30.6%. He stopped pulling the ball and went up-the-middle and oppo more. A more mature Torres at the plate? It sure looks like it.
The plate discipline numbers reiterated this. The swinging strike rate went down and so did the chase rate. He swung at 10% fewer pitches though.
Let’s go to the Statcast data. The exit velocity was 88.6 mph, down from 89.1. Not bad. The launch angle went from 17.7 to 14.9. In 2018, that number was 19, so three straight years of decline. The barrel rate plummeted from 10.1 to 3.7.
I went into this exercise thinking that the draft cost would be too high for Torres, despite the discount of around 40 picks from the prior year. The more I look at the numbers and think about things, I’m becoming more bullish. I appreciate the change in approach for Torres. He’s become more patient and is waiting for his pitch. Now, he probably wasn’t aggressive enough last season but that’s something that can easily change. Let’s not forget that last season consisted of only 160 plate appearances.
Looking at his career hit spray chart, while most of his home runs have gone to left field, he does have plenty of hits to right and center field that have either gone over the fence or close to it. If he maintains his new approach with oppo power, he could be more deadly than before, but it may take some time for everything to come together. TREASURE
