|Written by GSCR Staff|
|Friday, 13 September 2013 12:28|
The headline is one of the clichés related to big college football recruiting and booster support. The implication being that if you run a squeaky clean program, you do not have a chance to be competitive as everyone else is doing it anyway.
This rationalization to permit cheating in NCAA football seems to have suddenly created an epidemic with the barrage of scandals recently. The season started with the Johnny “Football” Manziel autograph scandal, where reportedly received tens of thousands of dollars to sign autographs. The NCAA could not prove he did anything, so he only got a half game suspension. This week Sports Illustrated published a five part article on Oklahoma State, where wrongdoing covers the gamut from paying players, academic fraud, to sex from hostesses for enticing recruits. And then the bombshell yesterday that 5 recent players from SEC schools alleging they received money from agents, including an offensive lineman currently in the NFL that was part of the Alabama Crimson Tide’s national championship teams from 2011 to 2012. Clearly it seems like this stuff is on the rise with recent scandals at big time schools like USC, Miami, and Ohio State also.
How does this relate to the market? To the retail investor it may seem like insider trading is the norm and that it is getting worse. Just yesterday, SEC officials met with NASDAQ and NYSE officials to discuss the ‘integrity of the markets’ after last weeks’ technical ‘glitch’ that halted trading for several hours that many are blaming on ‘inside’ high frequency traders. There have been several recent cases that also make it seem like this phenomenon is on the rise from Raj Rajaratnam to charges brought against Steve Cohen of SAC earlier this year.
The truth is more likely that this stuff has always been going on, except now it is harder to hide and 24-hour news channels need stories.
For many the solution to these problems is to just eliminate the rules. Just paying the players because the NCAA and the universities make millions from them in the college football case, or just eliminating laws against insider trading because the advent of the internet and the numerous sites that track trading this makes it ‘impossible’ in the case of the market. This logic is flawed. While there is a fine line between what is morally questionable and outright wrong this so called ‘free for all’ will only make matters worse. The idea behind these rules is to create an environment so that more people can compete. Tearing down the rules would only make the rich richer. Will the laws and rules prevent all future cheating, no way? But the deterrent is necessary.
What is the point here? Wall Street and big time college football both have ultra competitive people that will bend the rules to the maximum, and sometimes break them to try and gain an edge. This may sound naïve, but the good apples far outnumber the bad ones in both industries and the greater good these institutions serve is worth the cost of keeping them in tact with very little modifications if any. There has to be absolute rules even though there is a lot of gray in both areas. Protecting the integrity of the market or a game is paramount for the public good. Whether or not the continuing scandals will damage attendance and TV viewership in college football’s case or inflow of capital in Wall Street’s case remains to be seen.
OK, off the soap box we go.
Have a great weekend and enjoy some college football anyway!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
Goldman Small Cap Research is not affiliated in anyway with Goldman Sachs & Co.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com