In his 1/6 Market Watch, Ben Kaplan opined that, at $14 million, Shaquille O'Neal is overvalued, and suggests that the lofty price tag won't last. He proceeds to support his valuation assessment by pointing out that the combination of Brevin Knight and Jamie Feick costs almost $3 million less than Shaq, yet the tandem outproduces him in average points per game.

Kaplan raises an excellent question about Shaq's relative value. And his supporting facts are irrefutable. But they're also irrelevant.

First of all, he mixes positions. Shaq is a center. Knight is a guard. Feick is a forward. They can't be directly interchanged. And because of that, the relative valuations across positions needn't be directly comparable. But that's a minor issue, because there is clearly some relationship between the prices of players at different positions. More on this later. And he could have made his point but using two centers, such as Vlade Divac and Keon Clark. The numbers are roughly the same.

The major flaw in the example is that he compares one player vs. two. You can't replace Shaq with two players. To get two players, you have to sell two players.

Perhaps the easiest way to dispel the validity of the one-vs.-two player comparison is through another example. Suppose I said that, even at a SWP/game average of 45 (which slightly exceeds his recent average), Lamar Odom is overpriced at $6.4 million! Here's why. The combination of Malik Sealy and Ron Artest costs only $4.3 million, and yet this tandem averages more than 55 SWP/game. In fact, you could add in Carlos Rogers for another $1.2 million and get the trio for only $5.5 million, yet they collectively produce almost 80 SWP/game. Why would any rational manager pay $6.4 million for an optimistic 45 SWP/G when he could get 80 SWP/G for less than $6 million?

As it turns out, unless you're evaluating players at the lowest end of the price spectrum, you can always find a pair of players that will undercost and overproduce any single player. Examples are virtually infinite. Try it. You'll see.

Of course, this only demonstrates that Kaplan's 2-for-1 example doesn't satisfactorily answer whether Shaq's price is too high, too low, or just about right. And that's still a very legitimate question.

I believe that Shaq still offers good value at $14 million. And I also believe that, barring injury or a dramatic falloff in production, he'll continue to appreciate in price. This isn't an irrational response to a big market, big name icon. It's really quite rational. Here's why.

As managers, we strive to accumulate as much wealth as we can. Admittedly, our ultimate objective is to generate the most points, but we have the best chance of doing that if we have the best players on our roster. Few would argue that Shaq isn't among the top two centers. So, every manager ultimately aspires to own Shaq.

Today, the most expensive roster possible costs $118.5 million. Suppose you had $120 million available to spend. You could afford to own the top players at every position. Would you own Shaq at $14 million? No question. What if his price rises to $15 million? Still a slam dunk!

Of course, none of us has accumulated that much wealth, at least not yet. So we all have to make tradeoffs. We have to accept somewhat lower production, by accepting some players at lower cost. For example, if I am $6 million short of being able to afford the best roster, I might substitute Lamar Odom for Tim Duncan. I save $6 million in cost, and if Odom continues to produce at recent levels, I'll give up less than 10 SWP/game.

The wealthiest teams in mid-January are worth about $90 million, and many competitive teams are still in the $70-$80 million range. With less in resources, we have to make more sacrifices. Given that Shaq is currently the most expensive player, doesn't it seem likely that he would be one of the first ones for a rational manager to replace?

Not necessarily, and here's where the Shaq's positional distinctiveness supports him. Among centers, only Alonzo Mourning appears to be within shouting distance of Shaq's point production. Robinson, Mutombo, Divac, and Ewing all have big names, but their SWP averages don't come close to the numbers that Shaq has been putting up. And so far this season, even cheaper centers have proven to be erratic commodities, both in terms of price and production.

Meanwhile, at forward, there are a handful of top players who are virtually identical in point production - like Duncan, Garnett, Webber, Hill, and Malone. A step below them, you also have many choices, like Finley, Kukoc, Carter, Brand, Robinson, Odom, Abdur-Rahim, and McDyess. Some of these "second-tier" forwards are priced quite attractively. And there are many more forwards with only slightly lower point averages at dramatically lower prices.

Now, if you can save $6 million to give up 10 SWP/G by downgrading from Duncan to Odom, or you can save $6 million at center by downgrading from Shaq to Divac while giving up 20 SWP/G, which would you choose? This is only a single example, but as it turns out, there are many more efficient downgrade options at forward and guard than there are at center. Using computerized optimization routines, one can even solve for the most efficient roster to own, given projected point averages and prices for each player. And using current prices and averages from the last 2 weeks, the optimizer puts a $14 million Shaq on every roster valued at $60 million and higher! Far from being "irrationally exuberant", it looks to me like the SW Hoops market is remarkably efficient.

As more teams accumulate greater wealth, the demand for Shaq will only increase. This makes his long term price prognosis attractive - perhaps even more attractive than Odom's price outlook. As team values inflate, some teams will opt to drop Odom if they can afford to own Duncan instead. And Duncan's value will need to bear some comparability with other forwards at his production level, like Garnett, Webber, Hill, and Malone. You have enough choices at forward to keep price inflation modestly in check. But at center, Shaq's scarcity value should continue to push his price higher and higher. Anyone who can afford him will own him, regardless of his price.

Finally, take a look at the top teams in the worldwide rankings. Of the top 100 teams listed on January 8th, every single team owns Shaq. I doubt if all 100 of these managers are being suckered by a big market, big name movie star. And even if they are, you can't knock the results.