Andrew McCutchen and Selling Low
Buy low and sell high. It’s the investing concept we’re all taught at a young age, and it makes everything sound so simple. If you buy assets when their value is about to go up, and sell them when it’s about to go down, then you’ll get rich. Super easy! Everyone should do it! Get excited!
Life, however, is more complicated than that. The high and low points of a trend graph are easy to spot when looking retrospectively, but when you’re in the midst of the graph, determining whether things are about to go up or down is more difficult. Forecasting isn’t as easy as buy low/sell high makes it sound.
So, with that said, let’s talk about Andrew McCutchen.
The Pirates franchise player had a disastrous 2016 season, putting up career worst numbers in basically everything that counts. His walks went down, his strikeouts went up, and he posted his lowest ISO since his pre-breakout 2010 season. He hit 24 infield flies, more than doubling how many he had the year before, which drove his BABIP down 40 points below his career norms. After recording double-digit steals in every prior season, McCutchen was successful on just six of his 13 stolen base attempts. Never a great center fielder, UZR and DRS both think McCutchen was a disaster in center field, with a -19 UZR and a -28 DRS.
After four years of consistently being one of baseball’s best overall players, McCutchen was not far from being a replacement level performer last year. His downturn is one of the main reasons the Pirates failed to contend for a playoff berth. And that lousy year, following a run of great seasons, raises interesting questions about the timing of a potential McCutchen trade.
On the one hand, there’s the simple buy low/sell high philosophy, which suggests that the Pirates should hold onto McCutchen; dealing him now would be the definition of selling low. Let him show that 2016 was a fluke, re-establish himself as a high-level player, and then move him this summer or next winter if the team feels that a trade is necessary for the franchise.
On the other hand, there’s reality. No one knows if McCutchen’s value is actually going to go back up. A bounce-back is no guarantee, and as a 30-year-old with a history of knee problems who seems to be losing his athleticism fairly rapidly, it is entirely possible that the McCutchen of the past is gone forever. It may even be likely that McCutchen’s future is as a bat-first corner outfielder, not the all-around superstar that he was previously, given how aggressively his secondary skills regressed last year.
So when it’s suggested that trading McCutchen this winter would be selling low, we should ask what the baseline for that belief is. Low in regards to what his value was a year ago? That’s meaningless, because he’s never going to be 29 again, have three years left on his contract and be coming off a 6-plus-win season. McCutchen’s trade value now is significantly lower than it was 12 months ago, but it’s only selling low if it’s lower than it will be in the future. And that’s not as clear.
We should expect McCutchen to improve next year. Steamer projects him for a 129 wRC+ and a +3.5 WAR season, which isn’t quite back to superstar levels, but is dramatically better than he was in 2016. But just because his performance should improve in 2016 doesn’t mean his trade value necessarily will.
Any team trading for McCutchen this winter is doing so with the expectation of a rebound. They’re already pricing that belief into their willingness to trade for him, and will base their offers on the expectation that they’ll get two good years from him before they have to decide to extend him or let him walk as a free agent. To raise his trade value, McCutchen’s 2017 performance would have to exceed not his 2016 performance, but the expected performance of the current buyers, and by enough to outweigh the loss of at-bats a team would get by trading for him in the future.
Because even if McCutchen reduces the risk around his performance with a strong 2017 season, he’s going to be churning through a good chunk of the remaining time he has left under contract while doing so. At this point, an acquiring team can expect something like 1,200 plate appearances from McCutchen; by mid-season, that will be down to about 900, a 25% reduction in potential value. Some of that lost value can be offset by the potential for reduced supply of available talent at the trade deadline — which is one of the main reasons why prices are higher in July — but this isn’t a normal off-season, and there aren’t exactly a number of great options available to buyers this winter, so the scarcity gap between off-season and in-season pricing are likely smaller this year than most years.
So for McCutchen’s trade value to go up, his performance would have to exceed expectations to a larger degree than his loss of playing time would diminish what acquiring teams would pay. That’s certainly possible — especially if McCutchen’s defensive metrics are being driven by playing too shallow, which should be fixable — but it isn’t any kind of certainty. If the Pirates move McCutchen back and he’s still failing to catch enough balls to continue as a center fielder, then his value could sink in a hurry, since it’s a lot easier to find a corner outfielder than an up-the-middle guy with McCutchen’s offensive abilities.
So I just don’t really buy the idea that the Pirates would be making a mistake to trade McCutchen now. The market in baseball is more rational than it ever has been before, and if the Pirates made him available, contenders looking for an upgrade aren’t going to just let some other contender get a bargain by paying 50 cents on the dollar. Based on his expected 2017 performance — which is what teams are rightly paying for now — McCutchen would still be a coveted player, even coming off a lousy season, and teams looking to improve this winter would bid up the price until it reaches something close to a rational point.
Now, that isn’t to say the Pirates have to trade McCutchen this winter. They still have enough talent to be a Wild Card contender, and they might decide they’re best served by keeping him and making another run, then re-evaluating their position in the summer. But if they do decide to listen to offers this winter, we shouldn’t assume that they’re definitely making the wrong decision, or that they’d do better if they held him until next summer. Just because McCutchen’s value is low relative to what it was a year ago doesn’t mean it’s low relative to what it is going to be in the future.
Dave is the Managing Editor of FanGraphs.
I can’t read this article because the page keeps forcing me down to this point to view a video add. When i scroll up after about 10 seconds it forces me down again. Please fix this, it is making reading articles here impossible! I love you guys.
That is definitely not an ad we want to be displaying. If it happens again, can you screenshot the ad in question, so we know who the offender is?
It is a Ford Black Friday Year End Event video add. It keeps persisting. It may just be my computer.
file:///Users/ggraves/Desktop/Screen%20Shot%202016-11-22%20at%2012.08.33%20PM.png
You can’t link someone to a file on your personal computer. You have to use a pic uploader like tinypic or imgur.
Maybe you should upgrade your OS. I can view the file on his local drive just fine…
[IMG]http://i66.tinypic.com/sml2.png[/IMG]
Dave,
This was happening to me all week last week. Every single article I was reading, suddenly I was down at the ads. It started about the time that the pop up asking to donate started, and persisted for a week. I noticed it wasn’t the same ad each time, but didn’t keep track of which ones. I have not had the issue since Friday. I assumed it was something with the pop-up, and a glitch that was being worked out.
I am using Chrome. Should I do anything if it happens to me again?
It was happening to me also on the ZIPs article, while using Chrome. I switched to MS Edge, and that problem went away. Tho’ now I’m hanging like I always do with MS on this site.
Adblock Plus is free (or cheap), and it works great for me with Chrome.
Yep, this should definitely not be happening. We’re looking into it. Also, this has nothing to do with our membership ad, just a coincidence that they started at similar times.
I don’t think they should trade him now. at the deadline his value is very likely not lower and could well be higher.
if I was the pirates I try to compete for half a season (every season of a competitive window is worth a lot) and if they are out of it you sell cutch and Cole.
the combination out of the pirates not being that bad and cutch and Cole having a low value right now makes it imo an easy decision.
of course cutch at some point will really decline and sometimes it happens quicker than you think but I think the chance he bounces back to a 130+ wRC+ is not bad.
“I don’t think they should trade him now. at the deadline his value is very likely not lower and could well be higher.”
Dave laid out a pretty good case as to why this is unlikely. Even if he plays better, it likely wouldn’t offset the loss in runway for the rest of his contract.
I would be interested to read your rebuttal to Dave’s argument, instead of your opinion that appears like you never read the article.
Yes but it’s also possible that if you’re at the trade deadline and you’re right on the bubble, you have a better understanding on what your team is and what you need. If a surprise contender next July has a hole in the outfield, I wouldn’t be surprised if they offer more for McCutchen than anything the Pirates hear now.
He laid out a case, but not a particularly good one in my opinion. Historically there’s not much evidence to suggest that teams place a perfectly linear value on remaining contract time. While a player with two years remaining will certainly bring more than that same player a year later, history doesn’t suggest that the return would be twice as high. Even if it did, we have to factor in how a rebound would affect perceptions of the value of future years. So if McCutchen is perceived to be a ~3.5 WAR player right now, then the two years together would be estimated at something like 6.5 WAR. If McCutchen were to return completely to his 2015 form then we’re looking at those two seasons being worth ~11.1 WAR, and subtracting half of 2016 would still leave you at 8.2, which is obviously higher than 6.5. I don’t think that’s likely, but it’s certainly possible.
There are also additional modifiers to be considered, as teams pay a higher premium around the trade deadline because they are more confident of their playoff chances, although that can go the other way if the main playoff contenders don’t need that particular position. Ultimately this argument wouldn’t even really apply to McCutchen and the Pirates unless Pittsburgh plans on rebuilding, as they would be focused on what helps them the most right now rather than whether or not holding onto an asset would increase its future trade value. A better example would be Jay Bruce, where Cincinnati appears to have done the right thing by waiting.
Based on what (wrt Jay Bruce)?
While I think what Dave is saying is true to a certain extent, I feel like in baseball, where you definitely have the most information about your own players, you have to pay a tax when trading a guy who is on the downswing (whether the downswing is permanent or not). I think the thinking still goes, “if there’s nothing wrong with him, why would they trade him now?”
And really, why would the Pirates trade him now unless they got a very good deal, unless they had some reason to think that 2016 was absolutely not a fluke?
Yeah there doesn’t appear to be much excess value tied up in him right now.
The excess value to other teams is if they view him as coming back to where he was previously, or at least close to it. Perfect time to jump on him if you truly believe that he will come back.
For the Pirates, you very clearly trade him now if you do not think he is going to come close to producing the way he has in the past. Even if there is a little upswing, not enough would demonstrate that this is the new normal and completely kill his value at the deadline. If I were in their shoes and I didn’t think I could get production out of him at least 50-75% or above between his 2015 and 2016, I would trade now, because I am sure some team is willing to pay those prices for him right now.
The excess value isn’t great, but if you honestly believe 2016 was the fluke season, and not a massive depreciation of value, you can see a little bit of it.
And that’s the catch 22. If the Bucs indicate their desire to move him, it shows they have little faith in his return to prominence. That hurts his value IMO. If they want to move him (bc they want to promote Meadows), they need to be realistic about his market value. Otoh, it appears that he had a particular problem hitting LHed pitching this year and some associated bad luck (low babip vs LHers) so if you believe that is likely just an anomaly, then he is a good bounce back candidate.
Once the decision is made the Pirates value of him doesn’t matter. The market would set his value. It isn’t like they would only be negotiating with one team.
It’s definitely true: The Lemon Dilemma applies here.
Of course, the big countervailing factor is that this is a barter transaction where both sides are usually swapping lemons. E.g. the Blue Jays believe Pirates have adverse private information about Liriano, but the Pirates believe that the Blue Jays have adverse private information about Hutchison and these kinda cancel each other out from a pricing perspective. So there ends up not being a tax so much as simple market friction.
Just on the offensive side, there is very little precedent for a hitter of such broad-based excellence as McCutchen showed from age 25-28 to have such a steep drop at age 29 — and even less for that drop to be permanent. So I suspect an undisclosed injury, and a strong bounce-back in the batting stats.
There was an article on this topic here on Fangraphs earlier this season. Most of the star drop off guys rebounded the next year. Can anyone recall the link?
Grady Sizemore is the one name that jumps to my mind.
Sizemore was a star but a different kind of player. Never in Cutch’s league as a batter. His 4-year peak was .372 OBP and 128 OPS+. McCutchen’s was .404 and 157.
Yes, this ad-shifting thing is REALLY annoying. I use Chrome also. I used to go to Fangraphs first, at lunch time, but now I go there LAST. There is simply no excuse. And I really want to continue reading here.
An interesting question is: what sort of team would be a good suitor to bet on a McCutcheon rebound and trade for him? You might think about a youngish team that’s in shouting distance of a wild card spot, but certainly not a sure bet for the playoffs. A team with a young rotation that’s looking at a decent run in the medium term that, in other offseasons might be contemplating spending a bunch of money to sign a veteran bat like McCutcheon. A small-to-medium market club that wouldn’t be able to afford a big, long contract, but that could look at McCutcheon for the duration of his contract, and either trade him before it’s done, or play it out and get a compensation pick (assuming the CBA keeps them), or worst case scenario watches him fail to return to his old state of glory.
Of course they’d need to have the prospect depth to make that happen, to outbid the other suitors for the right to benefit from the rebound, should it happen.
Some possible teams that are projected to win 78-83 wins, and that look to be on the upward trend of their contention window: the Rockies, the Marlins, the Yankees, the Rays. We can debate which club makes the most sense of those, but I’d like to mention one that’s not on that list: the Pirates.
Gerrit Cole is under contract for another three years. Jameson Taillon just turned 25 last week, and Tyler Glasnow is 23. The lineup (ignoring Cutch) is older, though the core isn’t old: Marte (28) who’s signed for five more years, is supported by Kang (turns 30 in early April) who’s signed for three more years, and Polanco (25) who’s signed for seven (!) more years. Beyond them, they have Cervelli, Harrison, Bell, and Mercer, all of whom are below average but retained to reasonable deals.
Pittsbugh doesn’t look like a team that needs to tear down; they look like a team that needs a superstar to emerge, and if they aren’t going to sign a big superstar (which it certainly seems like they aren’t), they either need to deal a bunch of prospect talent, or hope for magic to happen with their own prospects (not terribly far-fetched as they do have a strong farm system).
And that’s all before mentioning the advantage that Pittsburgh has over other potential trade partners: they don’t actually have to give up any prospects to get McCutcheon. Yeah I know, opportunity costs and all of that, but the fact is that top-tier prospects don’t get moved often (Diamondbacks trades excluded), and teams prefer to stick with their own prospects, creating an environment where teams with big league talent to trade can only expect a quantity of talent, rather than top quality prospects. The Pirates need the latter, not the former.
Yeah, it might make sense for the Pirates to deal McCutcheon and avoid risking him losing more value. But they might actually benefit more by retaining him than they would be dealing him, under the realistic scenarios they have before them.
With the Trout article in mind, I’ll expect the Pirates to trade him mid-season 2018.
I recently did some (arguably quick and dirty) research that shows that a player projected to hit .362 (or anything) after several years of much higher performance and then a very down year (like McCutchen or Heyward) should be expected to perform in the next year exactly the same as a player who has been consistent for 3 or 4 years and has the same projection, assuming a valid projection system of course, which is really only one that combines the last 4 years, weights, age adjusts and regresses.
Not only do ALL groups (consistent, inconsistent, anomalously terrible last year, anomalously great last year) of players projected at X perform at X the next year, but their chances of performing at any particular level, regardless of previous levels, is almost exactly the same.
For example, a player who hits .380, .380, .380 might be projected to hit .362, like McCutchen. They and players like Cutch do both hit .362 on the average. But more importantly, and counter to conventional wisdom, neither type of player has a significantly better or worse chance of hitting .320, .300 or .400.
In other words, concept of, “Will he return to his good hitting ways or will he flame out (continue his bad hitting)” for a player like McCutchen or Heyward, appears to be a meaningless one. Similarly a when a player hits .320, .320; .320 and then .360, the concept of, “Was that a breakout or just a fluke?” also appears to be specious, as his chances of hitting around .360 again, or returning to his .320 ways (or something in between) is also around the same as any other player, even the most consistent of players, with the same projection.
That’s important given some of the comments here. It also means that if you give a team a projection, they shouldn’t care whether the player just had a down year an up year or a bunch of consistent years, has been trending up, trending down, or any other “pattern” that human being like to make more relevant than they are. There is (almost) no more risk, ceiling or floor in a player who has had an inconsistent history than there is with a player who has had a consistent one.
Now of course they would want to be cognizant of other factors like injury history etc.
Keep in mind that things like players having a bad year because they are aging poorly or they have had an injury that is likely to hamper them in the future IS BUILT IN to the projections. That is EXACTLY why we weight recent data more than less recent data. It is ONLY because of the fact that recent data, even within all the random noise, DOES reflect changes in talent that are likely to continue, due to a myriad of things. For example, if you have 2 players like Heyward and Cutch and one had a known injury in his down year and the other did not, it is likely that you would want to adjust each player’s projection up or down by only a few points since both of these scenarios is already included in the projection system because of the weighting AND because the projection system is built on real life players who have had down years with and without injuries.