Sunday, July 5, 2015

Risky Business

As published in The County Times (

By Ronald N. Guy Jr.

In 2008/09, a flushing toilet would have been the perfect sound to describe the U.S. economy.  “Bailouts” and “toxic assets” were common terms.  The unemployment rate was spiking toward 10%.  The financial sector, after years of reckless lending, was about to collapse.  The Dow Jones Industrial Average, hovering around 7,000, had lost nearly half its value in less than two years.  The Great Recession, a dark, menacing entity, had arrived baring fangs and wielding a razor-sharp scythe.  The Grim Reaper likely feared for his financial future.  Can you imagine planning for a retirement that lasts an eternity?

As my buddies and I watched our 401(k)’s get halved and our children’s 529 plans dwindle, we debated our “now what?” strategies.  Everything we had learned in business school indicated that opportunities existed.  As an Economics professor once told me, when a market correction occurs, “stocks go on sale.”  Right.  So weren’t equities discounted when the Dow was at 11,000?  And 10,000?  And 8,000?  Where was the bottom, Doc?  Wall Street was a dumpster fire.

Ultimately we lacked the courage necessary for an aggressive stock purchase, instead opting for modest individual investments.  It worked, but with the Dow now near a record high, history has proven that stocks weren’t just on sale in 2009, they were trading at clearance prices.  In hindsight, it was largely a missed opportunity.  Although given the little mouths to feed and futures to secure, we’re all happy to be employed and to have benefited from the economic recovery.   

Credit this revisited experience with The Great Recession to the Dallas Cowboys and owner Jerry Jones.  Despite our area’s widespread disdain for that godforsaken blue star, this much can be said for “Jerry’s ‘Boys”: they are consistently entertaining.  During Jones’s 26-year tenure, Dallas hasn’t always been good, but they don’t do boring.  High profile coaches, extravagant free agents and big trades have been the norm.  Jones even built a massive new stadium, pole dancers and all, to house the circus. 

But Jones may have lost his outlaw spirit. 

Since gambling on troubled WR Dez Bryant in the first round of the 2010 NFL Draft, Dallas’s personnel moves have been, by Cowboys’ standards, benign.  Jones has had only one head coach – Jason Garrett – since 2010 and he resisted the temptation to draft Johnny Manziel last year.  Rational.  Measured.  Patient.  Conservative.  Jerry? 

Apparently Jones’s gambling spirit was tempered only by Dallas’s recent run of mediocrity.  Invigorated by last year’s NFC East championship, Jones is back at the table doubling-down.  During free agency, he signed talented DE Greg Hardy who is currently serving a suspension for domestic violence.  In the second round of the NFL Draft, the Cowboys selected DE/LB Randy Gregory, a top-10 talent with a well-documented affinity for marijuana.  Last week, Jones added to his all-in offseason by inking offensive lineman La’El Collins, a first round talent who went undrafted after being named a “person of interest” regarding the murder of his former girlfriend.      

Since Roger Goodell was named NFL Commissioner in 2008, he has made “protecting the shield” and policing the conduct of players, coaches and executives a priority.  “Bountygate” cost Saints head coach Sean Payton a one-year suspension.  Colts owner Jim Irsay was bounced for six games after a DUI conviction.  The ‘Skins received a $36M cap penalty for creative accounting.  Players are routinely suspended for conduct detrimental to the league, as Tom “Deflategate” Brady will soon discover.   

Goodell’s actions have left most organizations less nervy about taking risks.  Jones smartly and cautiously capitalized on the pervasive forbearance.  Hardy’s on a one-year “prove it” contract.  With Gregory, Jones will leverage the structure and support that turned Bryant into an All-Pro.  And Collins, questioned by authorities after the Draft, is not considered a suspect.

Time will tell if Jones’s moves come up aces.  If nothing else he took a calculated risk in an environment excessively risk-averse - not a bad plan in sports, business or life.  Jones probably bought a ton of stocks in 2009 too, another reason to hate…and respect…the guy.  Of course with stocks, he had more margin for error than the average Joe…or Ronnie. 

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