MONEY Investing

Use This Trick to Beat Your Friends at Fantasy Football

Minnesota Vikings running back Adrian Peterson
Jeff Hanisch/USA Today Sports—Reuters

The start of the football season is close and fantasy football drafts have begun. Here's why thinking like a long-term investor can ruin your season.

Last November, one National Football League running back had a particularly good day.

Strong, agile, and quick, this player absolutely tore apart the Atlanta Falcons defense on Nov. 17 to the tune of 163 rushing yards and three touchdowns. Fantasy football owners fortunate to have him on their rosters were awarded almost 35 points from his performance alone—more than a third of the total usually needed to win a whole game.

So who was this guy? Future Hall of Famer Adrian Peterson? The Philadelphia Eagles buoyant halfback LeSean McCoy? Jim Brown? No, no, and of course not. He was an undrafted second-year player out of Western Kentucky named Bobby Rainey. Who, you ask? Exactly. On that same day Peterson himself, perhaps the greatest running back since Jim Brown, ran for 100 fewer yards than Rainey and never touched the end zone en route to a pedestrian 8.5 fantasy points.

It’s hard not to look for a lesson in this episode. And for someone like me, immersed in the investing world, the inclination is to draw a parallel to value investing, the discipline made famous by Warren Buffett. Value investing involves looking for companies that the market does not fully appreciate in hopes that, over time, they will outperform expectations and send the stocks soaring.

But as the fantasy football season gets under way, with millions of fans around the country drafting players over the next few weeks, I’m here to tell you that a Buffett-like approach to fantasy football probably won’t lead to glory.

Why not? Well, to start, value-focused buy-and-hold investing is all about ignoring short-term market fluctuations and sticking with your investment philosophy over the long-haul. Coca-Cola THE COCA COLA CO. KO 0.2162% has a bad quarter? Johnson & Johnson JOHNSON & JOHNSON JNJ 0.7576% delivered poor earnings-per-share growth? No matter. Value investors often see these rough patches as buying opportunities. And one of the foundational principles of value investing is that no investor can consistently predict exactly when to buy this stock or trade that one. When investors do engage in this perilous behavior, they generally end up losing money.

That ethos, however, falls flat when it comes to fantasy football. For one thing, there is no long-term in fantasy football. The season only lasts 17 weeks, which means you have only 17 chances to maximize your total scoring output. While one or two days of poor returns won’t hurt your portfolio, one or two weeks of fantasy football failure could ruin your season. Most leagues have around 10 teams, and, in order to make the playoffs, you’ll usually need seven wins. So if one of your players isn’t performing well, or hasn’t reached his full potential, you don’t have the time to wait.

In other words, don’t be scared to grab onto a hot player until he cools off. For instance, take another look at Peterson and Rainey. Going into the 2013 season, ESPN ranked Peterson the top fantasy football player to draft. Bobby Rainey is not Adrian Peterson. For his career, Rainey only has 566 rushing yards. Peterson has 10,115.

Nevertheless, Rainey was the superior running back over the last seven weeks of the 2013 NFL season. Using the NFL.com scoring system, Rainey earned 79.3 points from week 11 to 17, while Peterson (due in part to injury) only scored 54.8. Even if you take out Rainey’s career day against the Falcons, the two running backs scored pretty much the same number of points.

This isn’t an isolated example, either. Two weeks earlier, Nick Foles, who began the season as the Philadelphia Eagles second-string quarterback, threw for seven touchdowns and garnered 45.2 points for his fantasy owners. Foles would go on to accumulate a total of almost 260 points for the season (more than superstars Tom Brady, Ben Rothlisberger, and Matt Ryan) despite starting in only 11 of 16 games.

In fact, last season, 15 different players scored the most points in a given week (Peyton Manning and Drew Brees each did it twice). Of those 15 players, not one was listed in the top five on ESPN’s pre-season best fantasy football players list. Brady never scored the most points in any one week, for example, but Bears back-up quarterback Josh McCown did, in week 14.

In short, buying the football equivalent of Coca-Cola shares (one of Buffett’s most beloved and long-held stocks) and hanging on through thick and thin can be a losing game.

I learned this lesson the hard way, having drafted Buffalo Bill running back C.J. Spiller with my first pick last season. Ranked the 7th best player by ESPN going into last season, Spiller scored 3.5, 11.7, 3, and 7.7 over the first four weeks. Unwilling to give up on such a high pick, however, I kept him in my starting lineup for most of the season. I ended up in the bottom of my league and learned a valuable lesson in sunk cost theory.

Of course finding seven weeks of Rainey, or spotting the next Foles off the waiver wire, is difficult. Some up-and-comers are just flashes in the pan and will deliver worse returns than your first-round pick. But when this season’s Foles takes off, don’t be surprised. If you play fantasy football you must learn to embrace the shooting star—and if that star burns out, find another.

MONEY

10 Things Americans Have Suddenly Stopped Buying

Popping bubble gum
Ross Culshaw—Getty Images

America is just not the clean-shaven, gun-buying, soda-drinking, Chef Boyardee-eating place it used to be

For a variety of reasons—including but not limited to increased health consciousness, the harried pace of modern-day life, and plain old shifting consumer preferences,—Americans have scaled back on purchases of many items, sometimes drastically so. Here’s a top 10 list of things we’re not buying anymore, at least not anywhere near as frequently as we used to.

Cereal
In one recent four-week period, cereal sales were down 7%, and cereal giant Kellogg’s sales decreased 10%. The reasons for cereal’s declining dominance at the breakfast table are many. As the Wall Street Journal reported, consumers are more apt nowadays to turn to yogurt or fast food in the morning, and they’re less likely to have time to eat breakfast at home at all—not even if it’s a simple bowl of cereal.

Consumers also want their breakfast to pack more punch, protein-wise. “We are competing with quick-serve restaurants more, but the bigger driver is that people want more protein,” Kellogg CEO John Bryant told the Journal. It’s no coincidence that milk sales have been falling alongside cereal, with cow’s milk struggling especially due to the rise of alternatives like soy and almond milk. (Sales of yet another breakfast-at-home staple, orange juice, have plummeted 40% since the late 1990s.)

To try to put cereal back on the spoon of more breakfast eaters, food makers have been resorting to all manner of gimmicks, including the promoting of new higher-protein cereals, as well as the idea that cereal is a great late-night snack rather than just a breakfast-time basic.

Soda
The crash of soda—diet soda in particular—has been years in the making, with consumers increasingly turning to energy drinks, flavored water, and other beverages instead of the old carbonated caffeine drink of choice. The latest Wall Street report from Coca-Cola showed that the soda giant missed estimates, partly because sales of Diet Coke in North America fell in the “mid-single digits.”

(MORE: 10 Things Millennials Won’t Spend Money On)

While a lot of soda’s slump can be attributed to shifting consumer preferences—more organic, less sugar—the broader war on soda involving taxes and big-beverage bans must factor in too. And if First Lady Michelle Obama has any say in things, the decline of soda is a trend that’ll continue: Her ongoing “Drink Up” campaign encourages kids to consume more water—and, consequently, less soda.

Gum
Likely due to heightened competition from mints and candies, chewing gum sales have dipped 11% over the past four years, the Associated Press reported. The editorial board of the News Tribune of Washington state, for one, weighed in that it is wonderful that gum sales are down in the gutter, sniffing, “Gum-chewing doesn’t do us any favors, making us look like cows chewing our cud. For humans, that’s not a good look.”

Guns
Gun sales have been booming in recent years, with sales periodically juiced when perceived anti-gun politicians enter office or a high-profile mass shooting takes place, prompting consumers to seek guns for protection—or just out of fear they won’t be able to buy them in the future because tougher gun regulations might be passed.

Lately, however, gun sales have fallen, sometimes sharply. The big reasons why this is so seem to be that there’s little in the way of likely gun control for gun enthusiasts to motivate new purchases, and also that everyone who has wanted to buy a gun in the past couple of years has already bought one (or seven). In the first quarter of 2014, the guns-and-ammo-focused Sportsman’s Warehouse retail chain saw comparable stores sales drop 18%, while gun sales at Cabela’s fell 22%.

But a little perspective is necessary. While guns sales and background checks are down compared to the past couple of years, they remain far above the levels of the early ’00s. As gun industry experts have put it, the decline probably just represents a “returning to normal” for gun sales—which aren’t as strong as they once were, but are still very strong nonetheless.

Cupcakes
Well, it looks like many of us at least have stopped buying the pricey “gourmet” variety of cupcakes. That’s the conclusion to be drawn with the collapse of Crumbs, the 65-store chain that shut down abruptly in early July. The news was widely interpreted as a sign that the gourmet cupcake trend is officially dead.

Chef Boyardee
ConAgra recently issued a warning to Wall Street that its consumer food volume experienced a 7% decline, and that it faced “continued profit challenges” due to some of its flagging, tired products—in particular, Chef Boyardee, the 86-year-old canned pasta brand.

Golf Gear
It’s not surprising that going hand in hand with fewer people playing golf, there are also fewer golf purchases being rung up at sporting goods store registers. The most notable eye-opener occurred this past spring, when Dick’s Sporting Goods announced that its golf equipment sales were down around 10%, at the same time the average driver was selling at a price of 16% less.

(MORE: Could Rory McIlroy Be Golf’s Long-Awaited Savior?)

Razors
Beard-loving hipsters were blamed for the decline in razor sales last summer, and in 2014, razor giants like Procter and Gamble (owner of Gillette) has continued to blame poor sales on the trendiness of beards. Everything from the shaggy beards worn by the World Series champion Boston Red Sox, to month-long no-shave “challenges” like Movember and Decembeard have been cited as reasons why guys have scaled back on razor purchases. In response, marketers have introduced even more varieties of new high-tech razors, while also pushing the concept of “manscaping,” with special razors designed just for the task. The hope is that even if men aren’t shaving their faces, they might still shave one or several other parts of their bodies.

Bread
According to one survey, 56% of American shoppers said they are cutting back on white bread. White bread was surpassed in sales by wheat bread sometime around 2006, but in recent years the gluten-free trend has hurt sales of all breads. Sales are even down in European countries like baguette-loving France, where consumption is down 10%. In American restaurants, meanwhile, there’s an epidemic of free bread disappearing from tables, as fewer owners want to bear the expense of putting out free rolls and other breads that no one is going to eat.

Convertibles
The fun-loving, wind-in-your-hair thrill of driving in a convertible just hasn’t been enough to keep consumers buying the classic ragtop in strong numbers. Businessweek noted that convertible sales have fallen 44% since 2004, and automakers have been significantly scaling back the number of models that are even offered in convertible form. Apparently, too many consumers see convertibles as impractical, and/or not worth the $5,000 or so premium one must pay compared to the regular model.

Data recently released from Experian Automotive indicates that the convertible is largely now a toy purchased by the rich. Nearly 1 in 5 convertible buyers have household incomes of at least $175,000 (compared to 11% of buyers of all cars), and 12% of convertible buyers own homes valued over $1 million (compared to 4% of buyers of other cars). For what it’s worth, convertible drivers are also better educated than the average car owner (50% of convertible buyers have at least a bachelor’s degree, versus 38% overall), and nearly one-quarter of all convertibles are now purchased in three sunny states with ample coastlines: California, Florida, and Texas.

Related:

10 Things Millennials Won’t Spend Money On

TIME justice

Supreme Court: POM Wonderful Can Sue Coca-Cola

POM Wonderful's 100% Pomegranate Juice
POM claimed Coca-Cola falsely advertised a drink that hurt their own sales. MCT—MCT via Getty Images

It's a juicy case

The Supreme Court unanimously voted Thursday in favor of advancing POM Wonderful’s false advertising lawsuit against Coca-Cola.

POM’s suit asserts that Coke misled consumers when advertising a Minute Maid beverage as a “Pomegranate Blueberry Flavored Blend of 5 Juices.” Coke’s pomegranate-blueberry blend violated the Lanham Trademark Act — which prohibits false advertising statements on products — because the drink contains only 0.5% of the two juices, POM argues.

Eight Supreme Court judges (Justice Stephen Breyer recused himself from the case) unanimously overturned two lower courts rulings that the FDA’s approval of the drink should stand.

Justice Anthony Kennedy wrote for the court, arguing that the FDA’s decision did not preclude all other trademark laws because the governmental agency “does not have the same perspective or expertise in assessing market dynamics that day-to-day competitors possess.”

POM’s lawsuit also alleged that Coke’s drink, which is 99 percent apple and grape juices, hurt sales of its own 100 percent pomegranate juice. The Court’s green light to the case means more details of the juicy argument will unfold in the coming months.

TIME Companies

Coca-Cola Drops Powerade Ingredient Linked to Flame Retardants

Bottles of Powerade and other Coca-Cola products in Orlando on Aug. 5, 2010.
Bottles of Powerade and other Coca-Cola products in Orlando on Aug. 5, 2010. Jon Elswick—AP

Brominated vegetable oil, which has been linked to a flame retardant, had already been dropped by PepsiCo from its Gatorade products following public scrutiny and a Change.org petition. The ingredient is not approved for use in the European Union or Japan

Coca-Cola will no longer use a controversial ingredient in its Powerade sports drink, the company confirmed Sunday.

A spokesperson for the company said its Powerade drinks were now free of brominated vegetable oil, an ingredient that has been linked to a flame retardant, reports the Associated Press. Coca-Cola has said before that the ingredient helps “improve stability and prevent certain ingredients from separating.”

Brominated vegetable oil has been the target of a Change.org petition from Mississippi teenager Sarah Kavanagh, who points out that the ingredient is not approved for use in the European Union or Japan.

Although Coca-Cola said the beverage was now “BVO-free,” the Powerade website and some bottles still list the ingredient, suggesting the change may still be coming into effect.

Last year PepsiCo said it would stop using the oil in its Gatorade products. Kavanagh’s Gatorade petition had more than 200,000 online signatures, while her Powerade one had more than 59,000.

[AP]

TIME Companies

Coca-Cola Profits Dip as Americans Drink Less Pop

The world’s largest beverage-maker sold more drinks overall worldwide but that didn’t make up for a drop in its vital North American market

Coca-Cola’s profits dropped by almost 8% in the first quarter this year, as the world’s largest beverage manufacturer sold less soda and grappled with a stronger U.S. dollar.

Profits fell for the Atlanta-based company despite an overall increase in sales of non-carbonated beverages around the world and a 2% increase in global sales volume, the Associated Press reports.

Soda sales in North America fell 1% as the company raised prices. Adding to challenges for Coca-Cola—and for its competitors, like PepsiCo, which is expected to report a similarly poor performance when it posts profits Thursday—is the fact that Americans are simply drinking less soda.

“Look, we have Coca-Cola, and we have another 500 brands,” said CEO Muhtar Kent in an interview on CNBC. “The key is to offer a wide variety of choices.”

[AP]

 

TIME Food and Beverage Industry

The Trend Miller and Budweiser May Want to Start Worrying About

ULTRA.F / Getty Images

Are you tempted to taste Hell? In the mood for a Hooker? Or perhaps it’s time to try Zevia? The latter may sound like a mood-enhancing drug, but it’s not. Neither are the others—not exactly, anyway. They’re all unfamiliar beverage brands, a few of the many increasingly showing up on the menus of casinos, airlines, and pro baseball stadiums.

Craft beers and indie soft drink brands have been mainstays at local restaurants, bars, and markets for years. Heck, craft beer is so mainstream that even Costco and Walmart are now known to stock a few interesting selections. Lately, unfamiliar labels are more likely to be seen even in mass-market hubs and attractions that traditionally have been dominated by the world’s biggest brands, often thanks to exclusive partnerships.

Airlines
In February, Minnesota-based Sun Country Airlines announced it was getting Surly. Beers from Minnesota neighbor Surly Brewing Company with names like Hell, Furious, and Bender are now being sold in 16-ounce cans on Sun Country flights.

As NBC beer blogger Jim Galligan and, more recently, the Associated Press, have reported, Sun Country is one of several airlines to offer passengers beer options beyond the usual Miller and Budweiser products (which, it should be noted, Sun Country still sells). Shortly before Sun Country’s craft beer infusion, Southwest Airlines introduced a partnership with New Belgium Brewing, the Colorado-based brewer known for Fat Tire Amber Ale, among many other beers. Like all alcoholic beverages on Southwest, a can of Fat Tire—airlines almost always stick with cans, or plastic bottles, to avoid broken glass on the plane—will run an airline customer $5.

Samuel Adams, the largest of all craft brewers, has been available on JetBlue since last summer, Frontier Airlines launched a big craft beer initiative in 2012, and Virgin America brought beers from 21st Amendment Brewery on board in 2009, and welcomed Anchor Steam beer a few years later. Best of all, Horizon and Alaska Airlines recently expanded their craft beer options to include brands such as Alaska’s own Silver Gulch, and, in almost unheard-of fashion nowadays, the carriers offer beer and other alcoholic beverages on a complimentary basis on longer flights.

Casinos and Cruise Ships
Realizing that an impressive and unusual selection of beer and wine is not only good for business but practically necessary for the fine dining crowd today, casinos and bars along the Vegas strip have been ushering in craft beer brands in a hurry. In Connecticut, the Mohegan Sun resort and casino just introduced the Hooker Brewing Test Kitchen, which is pretty much what it sounds like: a spot for Bloomfield-based Hooker Brewing to make and sell experimental small-batch brews.

Cruise companies are increasingly playing up their craft beer selections as amenities as well: Celebrity Cruises, for instance, notes “up to 50 international craft beers” offered one ship’s club. There are also beer-themed cruises focused on small and unusual local brews from operators such as Crystal Cruises and Un-Cruise Adventures.

Baseball Stadiums
Craft brews are nothing new at pro and minor league ballparks. Petco Park, home of the San Diego Padres, boasts perhaps the best beer selection in baseball, with no fewer than 14 local craft brews sold during games. But there are a few caveats of note: These craft brews are seriously pricey (over $15 a pop in some cases), and sometimes these craft beers aren’t truly craft brews. For instance, last year, there was some uproar in the craft beer community regarding Yankee Stadium’s “Craft Beer Destination” concession stand. All of the brews sold there just so happened to be MillerCoors products, though they featured indie-sounding “crafty” names such as Blue Moon and Batch 19.

If fans find it strange to see less Miller and Bud sold at the ballpark, then it might be downright surreal for soft drink giants such as Pepsi and Coke to be replaced, even to a small degree. Yet this season at the Oakland Coliseum, the old official soft drink sponsor of the A’s (Pepsi) is out and a new one is being ushered in: Zevia, a naturally-sweetened, zero-calorie soda sold in flavors like cola, ginger ale, and black cherry. Zevia will be sold in bottles at all concessions stands in the stadium, and while Pepsi drinks will still be available for purchase, they’ll only be offered as fountain soda (not in bottles).

One branding consultant told USA Today that the ball club may have a hard time convincing fans that Zevia is the soft drink for them. “It sounds like a car made behind the Iron Curtain 50 years ago,” he said.

TIME coca-cola

LeBron James Gets His Own Soda

Miami Heat forward LeBron James smiles after a 100-96 win over the Cleveland Cavaliers at Quicken Loans Arena
Miami Heat forward LeBron James smiles after a 100-96 win over the Cleveland Cavaliers at Quicken Loans Arena, Mar 18, 2014. David Richard—USA Today Sports/Reuters

Miami Heat star LeBron James is partnering with Sprite to introduce 'Sprite 6 Mix,' a specially branded cherry- and orange-flavored version of the popular lemon-and-lime soft drink. The new beverage hits store shelves nationwide for a limited time this month

LeBron James already has a best-selling sneaker line and a cartoon series on YouTube. Soon, he’ll have his own beverage, too.

The NBA All-Star is partnering with Sprite to release Sprite 6 Mix, a cherry and orange-flavored version of the lemon-lime soda. The drink will be available for a limited time nationally starting this month. Sprite 6 Mix will feature a crown on its label — a reference to the basketball player’s nickname, “King James” — and will be the company’s first soda developed in tandem with a celebrity.

James earned $42 million in endorsement deals in 2013, leading all NBA players, according to Forbes. He’s been a pitchman for the Coca-Cola Company, which owns Sprite, since he first entered the NBA in 2003. James has helped the company advertise several of its brands in that time—making improbable full-court three-pointers for Powerade, trying a court case for Vitaminwater and challenging Yao Ming to a battle of cultural stereotypes for Coca-Cola itself.

Sprite 6 Mix will get a 15-second TV spot all its own this spring. Whether James’ new soda will reach the cultural ubiquity of rap star Nelly’s energy drink Pimp Juice remains to be seen.

TIME Education

White House Sets New Limits on Junk Food Ads in Schools

Michelle Obama
U.S. First lady Michelle Obama speaks to students at Bell Multicultural High School in Washington, D.C., on Nov. 11, 2013. Carolyn Kaster—AP

Part of First Lady Michelle Obama's "Let's Move" initiative

The Obama administration laid out new restrictions on the marketing of junk food and sugary drinks in schools on Tuesday.

The new rules from the White House and the Department of Agriculture prohibit advertisements for unhealthy foods on school campuses during the school day, including sugary drinks that account for 90 percent of such ads in school. An ad for regular Coca-Cola, for example, would be banned from appearing on a scoreboard at a high school football game, though ads for Diet Coke and Dasani water, owned by the same company, would be allowed. Junk food ads like a Coca-Cola scoreboard would be phased out under the new rules and would not have to be replaced overnight.

“The idea here is simple—our classrooms should be healthy places where kids aren’t bombarded with ads for junk food,” First Lady Michelle Obama said in a statement. “Because when parents are working hard to teach their kids healthy habits at home, their work shouldn’t be undone by unhealthy messages at school.”

Michelle Obama and Agriculture Secretary Tom Vilsak will announce the new regulations at a White House event Tuesday. The rules come as part of the first lady’s “Let’s Move” campaign to fight childhood obesity. Industry heavyweights like Coca-Cola and PepsiCo are backing the new regulations.

The marketing limits come after new USDA regulations that put a cap on the calorie, fat, sugar and sodium limits on most food items that can be sold in schools.

“The new standards ensure that schools remain a safe place where kids can learn and where the school environment promotes healthy choices,” Vilsack said in a statement.”

In addition to the limits on marketing of junk food in schools, the USDA rules to be announced Tuesday expand programs that feed hungry kids in need, allowing the highest poverty schools to provide free lunches to all students. The White House says that will add up to about nine million kids in 22,000 schools. The rules will also include guidelines for establishing overall wellness policies in schools, inviting parents and the wider school community to help develop standards for nutrition and physical activity.

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