The 14th annual NFL Honors dinner takes place on February 6, 2025. Among the presentations is the NFL Coach of the Year Award, given to the head coach who has “done the most outstanding job of working with the talent at his disposal.” Note that isn’t necessarily the coach with the winningest record, but effectively, the coach that most exceeds expectations. So using an investing analogy, it’s more like how stocks respond to earnings reports: flat earnings can be good news if expectations were for a decline, and 20% growth can be bad news if investors were expecting more.

We can get an approximation of expectations by looking at preseason expected win totals and comparing to the results so far this season. The table below shows FanDuel’s preseason expected wins for each team, actual wins through week 15, and the difference between the two, excess wins.

At the top of the list are this season’s positive surprises. In first place, the Minnesota Vikings who already have 4.5 more wins this season than expected. And not surprisingly, Minnesota Vikings coach, Kevin O’Connell is the favorite to win Coach of the Year, +110 on FanDuel (meaning a $100 bet wins $110, for a total return of $210.). The top six candidates according to FanDuel are all in the seven highest excess wins. At the other end of the spectrum, those teams that are furthest beneath their expected wins, are the coaches that either are rumored to or already have been fired.

So, what sets Kevin O’Connell apart, and are there similarities between a good coaching culture and a good investing culture? Minnesota’s premier offensive lineman, Brian O’Neill, says one of O’Connell’s strengths is “keying players into why we’re installing things the way we are, rather than some coaches who call plays and install plays, and the players don’t know why.” At Oakmark we believe everyone on our research team has to understand not only what characteristics make a stock of interest to us, but why each of those characteristics matter. There’s a big difference between trying to find stocks someone else might believe are attractive, compared to internalizing the reasons, and finding stocks you believe are attractive.

O’Connell talked about the difficulties that are part of any NFL season including severe injuries and off-field tragedies. He said, “My number one role is to be a rock of steadiness. Anybody can do that when things are good. I believe leadership is showing those things that you say you’re authentically about when difficult situations arise.” That could have been straight out of a business school management textbook. At Oakmark we remind our veterans that when times are tough, it is important to share the stories of how we’ve overcome similar situations in our past. The rookies need us to be their rocks. And that is especially true when our style of investing – long-term value – is out-of-favor. The market makes it very tempting to stray from your conviction just when the cost of doing so is most expensive. We need to share with our employees (and clients) the confidence that comes from our personal experience, because they don’t necessarily have the benefit of that experience to fall back on. You can’t wait for adversity to tell a rookie, “Remember, we’ve been through this before.” Corporate culture is all about sharing the stories of the events and decisions that shaped us into the business we are so proud of today. And the stories need to be repeated so often that the newer employees feel like they experienced it. As our longest tenured employee, telling those stories is a very important part of my job.

I’m a Minnesota native and life-long Vikings fan, so I’m rooting for Kevin O’Connell to continue getting the highest performance possible from his team, and for him to be recognized as Coach of the Year. The last Viking to be named Coach of the Year was the late, great Bud Grant in 1969, who led his teams to four Super Bowl appearances. I feel fortunate to have two Minnesotans on our investment team to side with me amidst a sea of Bears and Packers fans! As a fan of a franchise that has never won a championship, it is a pleasant surprise as we approach year-end to have the Vikings in the Super Bowl discussion!

OPINION PIECE. PLEASE SEE ENDNOTES FOR IMPORTANT DISCLOSURES.

This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or an investment strategy, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her financial professionals.

The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the portfolio managers and Harris Associates L.P. as of the date written and are subject to change and may change based on market and other conditions and without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.

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