At the completion of trading on January 5, the S&P 500 reached a milestone, having endured the longest interval in its history without experiencing a 5% decline, according to Spencer Jakab of The Wall Street Journal.

In another WSJ story, reporters Chris Dieterich, Ben Eisen, and Akane Otani note that declines have “grown shallower” over the last two years and “are snapping back sooner.” These trends, according to the authors, are a result of “economic optimism” and a growing awareness of the returns enjoyed by those who remained invested in “riskier assets” during the rebound from the Great Recession. Investors are jumping on the smallest signs of value, buying the smallest declines.

From that piece:

“The investor base has been conditioned to buy the dip,” said Mohamed El-Erian, chief economic adviser at Allianz SE. “And the reason why they have been conditioned is because it has been an extremely profitable trade.”

Buying the dip has been profitable — and particularly so in this bull market.

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Last week, we ran Part 1 of what is planned to be a six-part series chronicling Lars Anderson’s experiences in Australia. As was the case last summer with Japan’s Kochi Fighting Dogs, Anderson is enjoying a different brand of baseball, and culture, than he did as a member of the Red Sox, Cubs, and Dodgers organizations.

In the second installment, Lars introduces us to a colorful member of the Henley and Grange Rams, and explains what happened after he cleared a fence while acclimating to velocity he hasn’t seen since the Clinton administration.

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Lars Anderson: “My personal favorite player on the Rams is 39-year-old Wayne Ough (pronounced ‘Oh’). An Australian national who spends his summers managing in the German professional league, Wayne arrived a couple weeks after me. ‘You’re going to love him, mate,’ our manager Russell told me before I met him. He was right. Wayne embodies the role of journeyman ballplayer with that certain lack of grace only obtained through years spent in dugouts with underdeveloped man-children.

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After having typically appeared in the hallowed pages of Baseball Think Factory, Dan Szymborski’s ZiPS projections have now been released at FanGraphs for half a decade. The exercise continues this offseason. Below are the projections for the Los Angeles Angels. Szymborski can be found at ESPN and on Twitter at @DSzymborski.

Batters
During each of the last two offseasons, Jeff Sullivan has written a post about baseball’s best outfield. In each case, said outfield has belonged to the Los Angeles Angels — not, that is, because of a particularly notable breadth of talent, but rather due to the presence of Mike Trout (653 PA, 7.9 zWAR) on the roster. The 12-win mark typically represents the threshold those Angel outfields have transcended. The combination of Trout, Kole Calhoun (629, 2.4), and Justin Upton (607, 2.6) is forecast for 12.9 wins.

Trout’s excellence isn’t much of a surprise, of course. Much more mysterious is the near future of Shohei Ohtani (355, 0.9). ZiPS calls for the Japanese wunderkind to record a league-average batting line in his first year stateside. Combined with standard corner-outfield defense (Szymborski projects Ohtani in right field), the result is just less than a win in just more than a half-season’s worth of plate appearances. The strength of Ohtani’s forecast is his .333 BABIP, the highest mark assessed to anyone on the club. The weakness? His 31.0% strikeout rate, itself nearly the highest. Ohtani, meanwhile, is projected for a relatively modest .186 isolated-power figure. Overall, it’s less promising than his pitching forecast.

None of this, of course, addresses offseason acquisition Zack Cozart (467, 2.7) or other offseason acquisition Ian Kinsler (584, 3.0). Nor will it. Address them, that is.

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If you’ve read any of the dozens of articles over the years trying to create a framework for player asset values (putting a dollar amount on a player’s value), you’re aware of the biggest weakness of this genre of article. Take a star player, run him through a marginal-value analysis, and you’ll be disappointed in what it says about his trade value. Before we jump into the Gerrit Cole and Andrew McCutchen trades, follow me down a thought-experiment rabbit hole.

Clayton Kershaw is the best pitcher in baseball and Steamer projects him as a six-win player next year. Using the roughly $9-10 million at which a win is currently valued on the open market, Kershaw is likely to produce something between $50 and $60 million of value next year; let’s call it $55 million. Would multiple teams bid that amount for his services on a one year deal? Probably yes, because there’s some surplus value at that salary for which the formula fails to account. It doesn’t consider, for example, either extreme payrolls (i.e. the Dodgers’ on one hand, the A’s on the other) or more critical spots on the win curve (moving an 87-win team to a 93-win team is worth far more revenue-wise than 65 to 71).

So what would the A’s bid? They had an $86 million payroll last year, and they obviously wouldn’t give nearly two-thirds of it to one player. Oakland’s value for Kershaw would likely be whatever the maximum is that they would pay for any player, but that number is much lower than what the Dodgers would spend, maybe $20 million. Granted, these are extreme cases, but it illustrates the limitations of using a one-size-fits-all dollar-per-win calculator in specific instances, even if it works fine in aggregate.

More Granular Valuation

I point all that out to illustrate the fact that players aren’t worth the same to every team. Kershaw’s value, on which we all basically agree, varies by $30-40 million from the A’s to the Dodgers on just a one-year deal. So wouldn’t it follow that the A’s and Dodgers would value other players differently, too?

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Earlier in the offseason, the Giants came ever so close to trading for Giancarlo Stanton. Stanton has been one of the most important players in the Marlins’ admittedly limited history, but all that got in the way was a well-earned no-trade clause. Which is what ultimately took Stanton to the Yankees, instead of the Giants or the Cardinals.

Shortly after that all went down, the Giants traded for Evan Longoria. Longoria has been the most important player in the Rays’ admittedly limited history, but, well, the Rays are the Rays, and Longoria is both increasingly old and increasingly expensive. The commitment meant that Longoria had to go, and the Giants were there to welcome him with open arms.

And now the Giants have traded for Andrew McCutchen. McCutchen has been one of the most important players in the Pirates’ far less limited history, one of the keys to the franchise’s recent return to relevance, but where Longoria’s deal was too big for a smaller-market operation, McCutchen’s was too small. With just one year left, McCutchen all but forced the Pirates’ hand, and the Giants, again, were there. The agreement, as it is:

Giants get

• Andrew McCutchen
• $2.5 million

Pirates get

• Kyle Crick
• Bryan Reynolds
• $0.5 million in international-pool money

For the third time, the Giants targeted the face of another ballclub. For the third time, they reached an agreement. For the second time, a move has been actually made. Because of who McCutchen is and has been, this is an impact transaction, one that’s sure to have widespread consequences. The reality of trading or trading for McCutchen is complex. It’s also quite simple. The Pirates aren’t good enough to keep a 31-year-old staring ahead to free agency. And the Giants are trying to return to the playoffs before the inevitable reckoning. McCutchen gives them something they just didn’t have.

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Episode 795
As he noted on Wednesday in the electronic pages, managing editor Dave Cameron is leaving FanGraphs to join the San Diego Padres. This episode represents his final appearance on the program.

Don’t hesitate to direct pod-related correspondence to @cistulli on Twitter.

You can subscribe to the podcast via iTunes or other feeder things.

Audio after the jump. (Approximately 53 min play time.)

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After a couple false starts earlier in the week, the Houston Astros finally acquired right-hander Gerrit Cole from the Pittsburgh Pirates last night. As Travis Sawchik notes, the deal makes sense for both teams: the re-tooling Pirates get a collection of useful players, all within close proximity to the majors; the Astros, meanwhile, receive two years of a pitcher with a great arm and history of success. It’s mutually beneficial.

There’s a third party that might benefit from the deal, however, and that’s Cole himself. He might be worth more in Houston than anywhere else.

As a major leaguer, Cole has been either good or really good in each of his five seasons. There’s always this sense, however, that the former No. 1 pick could be great. Earlier this week, Travis Sawchik proposed one way that Cole could perhaps unlock the remaining upside in his 27-year-old arm –namely, by throwing his fastball less. In this way, his move to the Astros represent an opportunity: not only is Cole’s secondary stuff ready for more action, but his new team is uniquely suited to help this adjustment along.

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