Issue: One Freeze Roster slot remains. You must choose between $46 Pujols and $10 Neil Walker, but at the end of Auction Day you want to own both. Which one do you keep, then buy back the other?
Facts: Your league is in Stage 3 where everyone is experienced and they all know everything, so projected value is the same as the Auction market price. You suspect a 20% inflation rate on Auction Day from the Keeper rosters. In 24 seasons only 3 times has a player gone for the league high of $50: Albert twice and Hanley Ramirez once. Albert will earn $48 and Neil $15 in 2011. In this highly competitive league an extra $4 under the salary cap could make the difference in acquiring Alexi Casilla over Jack Wilson in the End Game.
(A) Keep Albert and buy back Walker.
$46 Albert’s Freeze Salary
$18 Neil’s price at Auction ($15 X 120%)
$64 Total Investment Cost
$63 Value ($48 + $15)
$1 Loss On Investment
(B) Keep Walker and buy back Pujols on Auction Day.
$10 Walker’s Freeze Salary
$50 Albert’s cost on Auction Day (League’s Psychological Auction Price Ceiling)
$60 Total Investment Cost
$3 Profit On Investment
3 Legged “Price/Cost” Stool: Freeze Day is in 2 weeks and the wind is blowing out at the Grapefruit League’s McKechnie Field in Bradenton. Neil Walker is getting more loft than usual and is looking like the 2011 version of Jayson Heyward, breaking auto windows in the distant parking lot. The news or noise makes Walker’s pre-inflation market price tick up to $18, so with 20% inflation he’ll cost $22 on Auction Day, wipe out your profit, and you’ll have to settle for a Jack Wilson Wanna-Be in the End Game. Now you should keep Walker. The 3 Prices or Costs are what he’ll earn, what he’ll cost (market), what he’ll cost with inflation.