Are you ready for some football? And do you honestly think that Tom Brady should be benched, or that Bill Belichik should be fired after losing the season opener? Football is back in all its glory and madness!
If you live outside of New England you might hate the Patriots, but we aren’t going to allow the current situation, so early in the season, to overwhelm the analysis of the organization and its competition. Ownership is strong, coaching is top notch (Matt Patricia the Defensive Coordinator graduated from the oldest engineering school in the English-speaking world and is the second smartest guy in the room), Brady is borderline psychotic about his preparation, the culture demands accountability and excellence, and their competition in the AFC East isn’t exactly world class.
If you were to see the way people are overreacting after less than 7% of the season, you could understand part of the madness of crowds and why the concept of a perfectly efficient market is flawed. At GeoInvesting, we would be buying on Brady in fantasy football leagues because of his fundamentals and track record. Just like we have done with stocks.
Sometimes a special situation comes along in the investment world that is similar to the start of the Patriots’ season. An organization with great leadership, smart and hardworking people, not great competition and an excellent culture come through something (say a bankruptcy or restructuring or death of key leader) and “J Curves” i.e. dips short term and then rockets up. A special situation like this would and has caused GeoInvesting to go beyond our normal parameters (like one member of the GeoTeam taking Brady in the fifth round of a draft the year he was suspended, leading him to a League Championship and bragging rights) and make a strategic bet against the madness of the crowd.
Like Charter Communications Inc. (NMS:CHTR).
Charter Communications isn’t a microcap under any definition. It employs almost 100,000 people in providing cable services throughout the Northeast. In 2010, it was emerging from Chapter 11 Bankruptcy and we jumped on it. Our only regret was selling it too early, locking in a 77% return after two years. A little more patience and we would have had a ten bagger.
That performance deserves a ticker tape parade.
We looked beyond our normal comfort zone and broadened our net to look for fundamentally strong companies that had had a bad season or injury or are in the wrong situation that could be rectified. Belichik takes rejects off the scrap heap, plugs them into his system, and gets them to perform. Randy Moss’ 23 TD season in 2007 is the classic example.
So as everyone in Patriots Nation freaks out about Tom Terrific having one bad game, look to take advantage of it in your pool and in the market. Because we will see who is still playing come January.
Enjoy the season!