StrategyJune 4, 2009

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The Monthly Trader: June

By Drew Szczerba

Pop Quiz! If you invested money in the likes of General Motors and Lehman Brothers you probably: A) Made money; B) Lost money; or C) Need to win your fantasy league.

As you may have guessed the answer is D; there is not enough information. In order to accurately answer the question, you need to know when the stocks were bought and sold. Even though these once mighty corporations have fallen, plenty of people made millions of dollars by buying and selling at favorable points in time.

In fantasy baseball, time lines are clearly defined. We rank players for the entire season before and during spring training. Throughout the year, we then “re-rank” players for the rest of the season. While this long-term approach is common and can be very useful, it overlooks the concept of timing that is so crucial in the stock market.

Today we are going to look at starting pitchers. But instead of examining which pitchers to target “for the remainder of the season,” we are only looking one month ahead. The pitchers listed below will have two traits in common. They will outperform their perceived market value in June and they will be “sell high” candidates on July 1. And away we go.

Josh Outman
The well-named “Out Man” won a spot in the A’s starting rotation out of spring training after he inevitably outperformed fellow prospect, Walker Gopherman. Truth be told, Outman doesn’t offer a ton of upside. He has combines average “stuff” with a unique delivery and projects as a middle of the rotation starter. But that’s the long term forecast. He likely June starts include matchups against the White Sox, Padres, and Giants (twice). His other opponents include the Twins and Tigers both of which would be in Oakland. The time for Outman to live up to his name is now.

Brett Anderson
Long on upside, short on experience. So far the lack of high minors experience is winning out. Anderson only has two wins versus five losses and his ratios support his unimpressive record. Fortunately, help is on the way. Anderson’s upcoming schedule is as follows: vs Twins, at Giants, at Padres, vs Rockies. Minnesota has just two wins in their last ten road games yet they are easily the class of this field. The rest of the gauntlet includes NL West lineups that should allow Anderson to regain his confidence and realize some of that aforementioned upside.

Felix Hernandez
If recent history teaches us anything, King Felix should be on a lot of “sell high” lists right about now. Over the past few years, Hernandez has earned a reputation for starting strong and making us believe he will truly be one of the best pitchers in baseball, only to fade into mediocrity as the season wears on. Here’s to hoping a lot of Felix owners also happen to be history buffs. His next four starts are likely to be the following: vs Twins, at Orioles, at Padres, vs Padres. It seems that those who want to sell now have the right idea but the wrong timing. The schedule says his market value goes up before it goes down.

Drew is a born Yankees fan who, not surprisingly, doesn’t particularly care for the Red Sox or Mets. He does, however, have a soft spot in his heart for most small market franchises. He gets an uneasy feeling every time the Yankees overpay for latest big name, and fears they may someday begin to acquire whole teams. Drew has been playing both fantasy baseball and football for 10 years. You can catch up with Drew in the Cafe's forums where he posts under the name Case Ace.
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