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The next market inefficiency? Graybeards.

Dave Cameron on the next big market inefficiency:

    One of the main uses of value analysis is to try and find market inefficiencies. Ten years ago, on base percentage was undervalued, so teams loaded up on high walk guys that scouts didn’t care for. More recently, defense has been the undervalued asset, so teams have gone after guys who can turn balls in play into outs.

    Everything is cyclical, though. As more teams pursue what is currently undervalued, it becomes more fairly valued, and the competitive advantage goes away. At some point soon, defense will probably become fairly valued again, and the teams who are loading up on good defenders will be looking for some other way to spend their money.

    What will the next big inefficiency be? It’s impossible to predict, of course, but I have a guess – old players.

    --snip--

    Teams have become cautious with the contracts they give to aging players, not wanting to get burned paying too much to a guy who may end up not having anything left in the tank, but I feel like we’re passing the point of caution and shifting towards a market failure. If a guy is a good player at 35, you should not expect him to be useless at 36. Yes, you regress his projection for aging, but players who go from good-to-terrible in a single season are the exception, not the rule.

    Given the contracts that quality older players have been settling for over the last few years, I think we may see teams in the market for value increasingly going for the graybeards.

Actually, defense is still a market inefficiency and will be for some time, as many baseball men still don't trust defensive sabermetrics. So there are (at least) two big inefficiencies right now, and the Red Sox exploited both when they signed Mike Cameron for two years.

Thanks to human nature, there will always be market inefficiencies. Some baseball men will always be ahead of the curve, most will be behind, and some will overcompensate. Just wait. In a few years, some baseball men will be overrating the same defensive players they'd been underrating. The next market inefficiency? Adam Dunn.