I spent a little time going back and looking at some of our prior seasons and stats and it made me think of the similarities between our Football team and an underperforming stock. This is probably too long but some may find it interesting.
Any time one evaluates a stock they can use fundamental and/or technical analysis.
Fundamental analysis requires understanding the nuts and bolts of the company (team) you are evaluating for investment. These nuts and bolts get translated into numbers like revenue (yardage) and earnings (TDs). If I compare UCLA football to a company, I would assign each position group the following department:
Offense:
QB - Research and Development: proper investment and production from the research and development department is key to attain growth which means increased revenue (yardage) and earnings (TDs). It is important that as few investments as possible result in total loss (Turnovers).
RB - Customer Support/Consulting: These folks are jacks of all trades, sometimes they implement the solutions (rush and receive), sometimes they identify and stop issues from occurring (block) , and sometimes they are the ones creating new sales opportunities (TD).
WR - Sales: You may have the best products in the world but without a well organized and effective sales organization generating opportunities (receptions) and making sales (scoring TDs) is much more difficult.
TE - Marketing: Similar to sales, marketing opens up the fields and at times works between research, sales, and operations to create leads (blocking), opportunities (receptions) and sales (TDs) for the business.
OL - Operations - In order for any other part of the business to work, operations must account for the flow of dollars and information (Block). If a company's costs are out of control then there will be no profit (Sacks). Without proper funding or processes, the other departments will not be able to execute (3 and out).
Defense: Information technology, without proper automation it does not matter what happens on offense. The business will fail to grow (win).
DL - Infrastructure: When systems go down, have intermittent issues, or function too slowly (fail to stop the run or pressure the QB) the other departments will not get the opportunity to do their jobs (move the ball) or when they are doing their job they will be rushed/frustrated and consequently ineffective (turnovers).
LB - Applications: The software systems need to be flexible enough allow the units to communicate, execute daily tasks, and identify and eliminate issues as they occur (tackle).
DB - Firewall: Everything else can work well but if one hack (big play) gets through everything else stops and it cost the company millions in revenues and lost opportunities. The firewall also controls what information gets in and out of the intranet (tackles and receptions).
Special Teams: Facilities
Coaches - Senior management: need to make the decisions that guide which products get developed (schemes), which people to hire (coaches, staff, and players), the processes to be followed (training and technique), how to spend money (lineups), and what opportunities to pursue (play calling).
Technical analysis generally only cares about the movement in the price of the stock (wins). Essentially, there are patterns that indicate whether a stock price is likely to go up, down or oscillate within a range. Some would say technical analysis is the summation of fundamentals without having to do the work to understand the details of the fundamentals. Two key concepts are support and resistance. Support is a price (win total) that a stock has remained above for a period of time and resistance is a price (win total) that a stock stays below for the same period of time. Breaking support or resistance for more than a few days (seasons) indicates the stock will likely remain above the resistance or below the support. Earnings reports (games) are times when support or resistance are more likely to be broken and for some larger successful companies there are other events (bowl games) like Apple's Worldwide Developer Conference that could move a stock to a new level. A new CEO (head coach) can also be considered a special event. Keep in mind depending upon the timeframe (number of seasons) considered the support and resistance will expand over time.
OK, so if I look at UCLA football from a fundamentals perspective over the Coach Kelly tenure:
Research and development (QB) has had successes but there have been a number of investments that still reap no ROI (turnovers and missed throws).
Customer Support/Consulting (RB) has remained excellent the last few seasons and have helped generate a lot of revenue (yardage) and solid earnings (TDs).
Sales (WR) has failed to land the big fish (long TDs) and we seem to be missing a rainmaker (Big play WR).
Marketing (TE) has done a great job of generating new sales opportunities (yardage and 1st downs).
Operations (OL) has steadily improved and consequently there has been general improvement in revenue and earnings (yardage and TDs) and the other departments appear to be sufficiently funded (limited sacks).
Infrastructure (DL) has been lacking and has caused total failures (blow out losses) but saw the biggest improvement last year (season) with good up time (stopping the run) and efficiency (pressuring the QB).
Applications (LB) were also inadequate but seemed to provide better function (tackling) and security support (sacks) last year.
Firewall (DB) has not been sufficient. It has allowed way too many data breaches (big plays) and has had issues allowing information to flow successfully in and out (conversion of long 3rd downs).
If I look at UCLA football from a technical perspective I see the following:
Long term support and resistance - 3 to 10 wins though you could say 10.5 wins since Donahue, Toledo and Dorrell won 10 games w/ 11 game regular seasons.
Coach Kelly - the hiring of Kelly could be considered a special event and after the event, UCLA broke below the relative support of the Mora tenure and seems to have been in an oscillating pattern for 3 yrs. Looking back at UCLA football historically there seems to be resistance at 6 wins. We are currently slightly above the floor of 3 wins based on a 7 game season.
Analysis - the win total is likely to remain at this level or go higher but there will be resistance at 6 wins. If that level can be broken then, the next level of resistance is 10 wins.
Another item of note is the ETF (Exchange Traded Fund). The popularity of an ETF can increase the prices of the stocks that make up the ETF. As people buy the ETF, the ETF management firm then buys more of the underlying stock (recruits better players) which then drives up the price (wins). Similarly, as funds flow out of an ETF (lower quality recruits) the price (win total) of the stock will most likely go down. The changes in the makeup of an ETF and the perception of the industry the ETF represents can impact inflows and outflows.
UCLA is part of two key ETFs. The University and the Pac 12. I think the University, with the help of the Wasserman's and other supporters, has experienced inflows in recent years w/ new facilities and food. Also, the new AD and the new deal w/ Nike Jordan Brand seem to be helping. The Pac 12 has experienced a pretty massive outflow over the last few years. Top players have been leaving the area to play for schools that have a perceived better chance of playing in big games.
Lastly, macro factors can benefit or hurt a particular industry or company. Last year, differing approaches to Covid hurt UCLA as we lost a key starter who wanted to play and was unsure if that would happen at UCLA. This year the new payment rules could benefit UCLA since it is in a bigger market. It may also limit the upside since the schools that pay the players the most will most likely get the best players. UCLA is not likely to be a top paying school though could be a high paying one.
Projection - Research and Development (QB) cannot have too many misses (Turnovers) and the Infrastructure (DL) & Applications (LBs) cannot regress if the profit (win total) is going to increase. To break the 6 win resistance, Sales (WRs) will need to pull in more big deals (big plays) and the Firewall (DBs) need to be more consistent and eliminate data breaches (big plays). Most importantly, the CEO (Head Coach) has to make better in game decisions. No more strategic errors (3rd string running backs in the game on a 4th and 1 or going for it on 4th down from our own 25 yard line).
I think we get to 6 but are limited to 8. Place your bets.
Any time one evaluates a stock they can use fundamental and/or technical analysis.
Fundamental analysis requires understanding the nuts and bolts of the company (team) you are evaluating for investment. These nuts and bolts get translated into numbers like revenue (yardage) and earnings (TDs). If I compare UCLA football to a company, I would assign each position group the following department:
Offense:
QB - Research and Development: proper investment and production from the research and development department is key to attain growth which means increased revenue (yardage) and earnings (TDs). It is important that as few investments as possible result in total loss (Turnovers).
RB - Customer Support/Consulting: These folks are jacks of all trades, sometimes they implement the solutions (rush and receive), sometimes they identify and stop issues from occurring (block) , and sometimes they are the ones creating new sales opportunities (TD).
WR - Sales: You may have the best products in the world but without a well organized and effective sales organization generating opportunities (receptions) and making sales (scoring TDs) is much more difficult.
TE - Marketing: Similar to sales, marketing opens up the fields and at times works between research, sales, and operations to create leads (blocking), opportunities (receptions) and sales (TDs) for the business.
OL - Operations - In order for any other part of the business to work, operations must account for the flow of dollars and information (Block). If a company's costs are out of control then there will be no profit (Sacks). Without proper funding or processes, the other departments will not be able to execute (3 and out).
Defense: Information technology, without proper automation it does not matter what happens on offense. The business will fail to grow (win).
DL - Infrastructure: When systems go down, have intermittent issues, or function too slowly (fail to stop the run or pressure the QB) the other departments will not get the opportunity to do their jobs (move the ball) or when they are doing their job they will be rushed/frustrated and consequently ineffective (turnovers).
LB - Applications: The software systems need to be flexible enough allow the units to communicate, execute daily tasks, and identify and eliminate issues as they occur (tackle).
DB - Firewall: Everything else can work well but if one hack (big play) gets through everything else stops and it cost the company millions in revenues and lost opportunities. The firewall also controls what information gets in and out of the intranet (tackles and receptions).
Special Teams: Facilities
Coaches - Senior management: need to make the decisions that guide which products get developed (schemes), which people to hire (coaches, staff, and players), the processes to be followed (training and technique), how to spend money (lineups), and what opportunities to pursue (play calling).
Technical analysis generally only cares about the movement in the price of the stock (wins). Essentially, there are patterns that indicate whether a stock price is likely to go up, down or oscillate within a range. Some would say technical analysis is the summation of fundamentals without having to do the work to understand the details of the fundamentals. Two key concepts are support and resistance. Support is a price (win total) that a stock has remained above for a period of time and resistance is a price (win total) that a stock stays below for the same period of time. Breaking support or resistance for more than a few days (seasons) indicates the stock will likely remain above the resistance or below the support. Earnings reports (games) are times when support or resistance are more likely to be broken and for some larger successful companies there are other events (bowl games) like Apple's Worldwide Developer Conference that could move a stock to a new level. A new CEO (head coach) can also be considered a special event. Keep in mind depending upon the timeframe (number of seasons) considered the support and resistance will expand over time.
OK, so if I look at UCLA football from a fundamentals perspective over the Coach Kelly tenure:
Research and development (QB) has had successes but there have been a number of investments that still reap no ROI (turnovers and missed throws).
Customer Support/Consulting (RB) has remained excellent the last few seasons and have helped generate a lot of revenue (yardage) and solid earnings (TDs).
Sales (WR) has failed to land the big fish (long TDs) and we seem to be missing a rainmaker (Big play WR).
Marketing (TE) has done a great job of generating new sales opportunities (yardage and 1st downs).
Operations (OL) has steadily improved and consequently there has been general improvement in revenue and earnings (yardage and TDs) and the other departments appear to be sufficiently funded (limited sacks).
Infrastructure (DL) has been lacking and has caused total failures (blow out losses) but saw the biggest improvement last year (season) with good up time (stopping the run) and efficiency (pressuring the QB).
Applications (LB) were also inadequate but seemed to provide better function (tackling) and security support (sacks) last year.
Firewall (DB) has not been sufficient. It has allowed way too many data breaches (big plays) and has had issues allowing information to flow successfully in and out (conversion of long 3rd downs).
If I look at UCLA football from a technical perspective I see the following:
Long term support and resistance - 3 to 10 wins though you could say 10.5 wins since Donahue, Toledo and Dorrell won 10 games w/ 11 game regular seasons.
Coach Kelly - the hiring of Kelly could be considered a special event and after the event, UCLA broke below the relative support of the Mora tenure and seems to have been in an oscillating pattern for 3 yrs. Looking back at UCLA football historically there seems to be resistance at 6 wins. We are currently slightly above the floor of 3 wins based on a 7 game season.
Analysis - the win total is likely to remain at this level or go higher but there will be resistance at 6 wins. If that level can be broken then, the next level of resistance is 10 wins.
Another item of note is the ETF (Exchange Traded Fund). The popularity of an ETF can increase the prices of the stocks that make up the ETF. As people buy the ETF, the ETF management firm then buys more of the underlying stock (recruits better players) which then drives up the price (wins). Similarly, as funds flow out of an ETF (lower quality recruits) the price (win total) of the stock will most likely go down. The changes in the makeup of an ETF and the perception of the industry the ETF represents can impact inflows and outflows.
UCLA is part of two key ETFs. The University and the Pac 12. I think the University, with the help of the Wasserman's and other supporters, has experienced inflows in recent years w/ new facilities and food. Also, the new AD and the new deal w/ Nike Jordan Brand seem to be helping. The Pac 12 has experienced a pretty massive outflow over the last few years. Top players have been leaving the area to play for schools that have a perceived better chance of playing in big games.
Lastly, macro factors can benefit or hurt a particular industry or company. Last year, differing approaches to Covid hurt UCLA as we lost a key starter who wanted to play and was unsure if that would happen at UCLA. This year the new payment rules could benefit UCLA since it is in a bigger market. It may also limit the upside since the schools that pay the players the most will most likely get the best players. UCLA is not likely to be a top paying school though could be a high paying one.
Projection - Research and Development (QB) cannot have too many misses (Turnovers) and the Infrastructure (DL) & Applications (LBs) cannot regress if the profit (win total) is going to increase. To break the 6 win resistance, Sales (WRs) will need to pull in more big deals (big plays) and the Firewall (DBs) need to be more consistent and eliminate data breaches (big plays). Most importantly, the CEO (Head Coach) has to make better in game decisions. No more strategic errors (3rd string running backs in the game on a 4th and 1 or going for it on 4th down from our own 25 yard line).
I think we get to 6 but are limited to 8. Place your bets.
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