Risk tolerance: What we can expect, and why I want to puke.


From the FanPosts -Joel

Risk tolerance is the amount of risk you are comfortable assuming for a given reward. There is often a large divergence between what we THINK we'll accept and what we FEEL we'll accept, and feelings ALWAYS win out. Always.

This draft has been a petri dish of risk tolerance. Just about every possible opinion has been espoused, making for lively and thought-provoking debate. There are two extremes that have taken shape, with a whole lot of middle ground for modified opinions.

Camp #1: Team Geno. The epitome of high-risk and potentially high-reward, Geno Smith proponents tend to see the huge reward potential as being sufficient to offset the risk of a busted pick and the loss of a potentially great player at a position of far less impact.

In stock market circles, these would be investors looking for aggressive growth. They're willing to ride the day-to-day fluctuations for the long-term expected result. This strategy should NOT be used if your window is short-term, but if well researched can produce excellent long-term returns to create a nest-egg.

Camp #2: Team Joeckel. Joeckel has been tabbed with the BPA label for quite some time. He's expected to have the skills to become an immediate starter and top-5 LT for the next 10 years. Joeckel proponents tend to see the nearly assured return of a valuable asset as a far better way to manage the team's assets.

In stock market circles, these would be conservative investors looking for a guaranteed rate of return. Like CDs, or bonds, they give a modest return for very low risk. This strategy is ideal if you have accumulated a comfortable level of assets and are looking to merely supplement it over the short term. This is not a strategy that will build wealth, only maintain it.

The essence of the debate is more a factor of where each of us sees the team's competitive level, more than the players to be selected.

People that see the team as rebuilding feel that assuming additional risk is the best way to get the team competitive for the long-term. People that see the team as already rebuilt or only lacking a few pieces feel the best way is to take the guaranteed return and utilize the talent on the roster while it's in its prime.

Both views have valid arguments, but the main view is the one held by Reid and Dorsey. How do they view the team's competitive level now, and what is their risk tolerance?

Determining someone's risk tolerance is easier than it sounds. First, don't listen to what they say, watch what they do. People tend to NOT do things that make them uncomfortable, while doing things that comfort them. Simply look at spending patterns to see what types of choices were made.

Does the person eat at the same place repeatedly or try new things? Does he get the newest tech gadget or an older model at a better price and fewer bugs? Those two questions tell a great deal about a person's risk tolerance.

If a person eats at the same place repeatedly, he's developed a comfort level with the service, food, atmosphere, or a combination. He'd rather have an experience he knows will be satisfactory than risk eating at an unknown location, even if the experience might be better, because he doesn't want the experience to be worse.

If a person is constantly getting the newest gadget, he's willing to risk more for unproven products. If he buys the older models, he's looking for refined technology at a cost effective price.

Throw all this together with the WCO philosophy that Reid is bringing and we can get a good idea of what DoReido's risk tolerance is.

They are "low risk/high probability" players. Their first major action was to get a QB that Reid was comfortable with. Alex Smith has been the epitome of high probability for the last two years. He'd rather take the guaranteed 5-yard check down than risk a 20-yard pass into coverage with the possibility of interception. Low risk/high probability.

All of their FA acquisitions were for players with known levels of competence for cost-effective deals, or lower year/dollars when there was doubt about the level of performance or consistency.

Branden Albert would be seen as an asset, nothing more. Their risk tolerance would lean them toward trying to maintain as much of that asset as possible either in a long-term, cost effective contract or through trade. This decision will be divorced from the larger draft picture. Either BA signs a reasonable contract, or he will be traded. The ramifications on the LT position in the draft will not be factored into this equation.

In the draft, DoReido will follow their interpretation of BPA, just as they said they would do. Their interpretation would best be described as "lowest risk" player available. Their first priority would be to attempt to trade back and acquire additional picks (assets), but I'm not sure what level of compensation they'd require to make a given move.

If a trade down isn't done, the Chiefs will take Joeckel; and it's not even close. He's the player in the top-10 with the most consistent performance, fewest question marks, and is healthy.

I've tried to be faithful to the risk tolerance and philosophy of DoReido while doing this analysis. The conclusion I've come to is one I personally abhor and would need a bit of time to get past, but any other choice would be inconsistent with their actions to date.

On a personal level, I disagree with the Team's apparent assumption that Alex Smith is the long-term answer at QB and question the trickle-down decisions based on that erroneous assumption. I do not believe the Chiefs have enough talent to follow a "lowest risk" draft philosophy and should instead look to take strategic risks for higher reward potential.

"It seems to be a law of nature, inflexible and inexorable, that those who will not risk cannot win." - John Paul Jones

This is a FanPost and does not necessarily reflect the views of Arrowhead Pride's writers or editors. It does reflect the views of this particular fan though, which is as important as the views of Arrowhead Pride writers or editors.

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