Speaker 1: M This is Mesters in Business with very Renaults on
Speaker 1: Bluebird Radio. This week on the podcast, I have an
Speaker 1: extra special guest and strap yourself in for this one.
Speaker 1: It's absolutely fascinating. Joe Mowglia could have the most unique
Speaker 1: career I'm familiar with. Not only is he a Wall
Speaker 1: Street veteran seventeen years at mary Lynch, eventually rising to
Speaker 1: the role of CEO and chairman at t D A
Speaker 1: merrit Trade, which is just a giant custodian and trading shop,
Speaker 1: but he also has been the head football coach and
Speaker 1: defensive coordinator at a number of esteemed college teams. UM
Speaker 1: such a fascinating, unusual career, and he went back and
Speaker 1: forth between the two of the career several times. It's
Speaker 1: really an intriguing career path he took when life basically
Speaker 1: threw him a lemon, he really made lemonade and created
Speaker 1: one of the most interesting careers in sports and finance. Uh,
Speaker 1: there's a ton to learn about him. He's been unusually
Speaker 1: successful in both careers and I just found this to
Speaker 1: be absolutely fascinating. So, with no further ado, my conversation
Speaker 1: with Joe Mowglia, this is Mesters in Business with very
Speaker 1: renaults on Bluebird Radio. My extra special guest this week
Speaker 1: is Joe Mowglia. He has one of the most fascinating
Speaker 1: careers in finance. He was the head coach of a
Speaker 1: football team at Coastal Carolina. You from throughen Uh. He
Speaker 1: was also a seventeen year veteran at Merrill Lynch before
Speaker 1: becoming chairman and CEO of t D A Merritrade, which
Speaker 1: was the largest online brokerage firm if you measure it
Speaker 1: by daily retail online trades. He is also the author
Speaker 1: of two books, The Perimeter Attack Offense and Coach Yourself
Speaker 1: to Success Winning the Investment Game. Joe Mowglia, Welcome to
Speaker 1: Bloomberg Barry, Thank you very much. I'm excited to be on.
Speaker 1: I'm excited to have you, and I have to start
Speaker 1: out with your career, which is which is so fascinating.
Speaker 1: You began in athletics. You were a college football coach
Speaker 1: for sixteen seasons. What made you say let me pick
Speaker 1: up a side hustle and finance. Well, there's a little
Speaker 1: bit of a story you know, behind this, of course,
Speaker 1: but I will jump to the transition time. So I
Speaker 1: coached for sixteen years and uh my one who was
Speaker 1: my first year as defensive coordinator at Dartmouth and we
Speaker 1: had four children, and we were in the middle of
Speaker 1: a staff meeting in the sheriff from Hannover, New Hampshire
Speaker 1: comes in and he needs to see me, and I
Speaker 1: was talked it was a death in the amiss coach,
Speaker 1: I'm sorry. He has me divorce papers. So I couldn't
Speaker 1: afford to live independently and support my wife before children.
Speaker 1: So I got permission to move into a store group
Speaker 1: above the football offices. I didn't mind that it was small,
Speaker 1: but it had no heat, and this is New Hampshire,
Speaker 1: so I could see my breath in the winter. I've
Speaker 1: lived there for two years now. My goal as a
Speaker 1: coach Artery was one day I wanted to be a
Speaker 1: coach of a major major school, you know, in Michigan
Speaker 1: and Notre Dame in Nebraska, whatever, but that was my goal.
Speaker 1: Well that year January and the Orange Bowl, Miami upset
Speaker 1: in Nebraska for the National Championship and their secondary coach,
Speaker 1: my card that took the head job at l s
Speaker 1: U and the following year that defensive coordinator was going
Speaker 1: to Cleveland Browns and they offered me the opportunity to
Speaker 1: go down as a secondary coach and then later on
Speaker 1: succeed Oliver Dotti, the current defensive coordinator as defensive coordinators.
Speaker 1: So I've gone from defensive cordinate in the IVY League
Speaker 1: the defensive coordinator in the national championship team. I could
Speaker 1: not have a more perfect next step of my career,
Speaker 1: could not a bit more perfect. But you know, a
Speaker 1: football coach works seven days a week, about eighty hours
Speaker 1: a week five months. You don't get a day that's literal,
Speaker 1: there's no days off and um and especially back then,
Speaker 1: coaches didn't make that much. And I'm going to be
Speaker 1: living in Carl Gables, Sparta, where my children to live
Speaker 1: with a mom in New Hampshire, and I couldn't afford
Speaker 1: to flying back the forth. So the most difficult decision
Speaker 1: I ever made was I turned down that job. But
Speaker 1: I didn't think I could do that job as a
Speaker 1: coach if I couldn't live up to my responsibilities of father.
Speaker 1: But that also told me very clearly that means I
Speaker 1: can't stay in football. So I made your in economics
Speaker 1: and I always had an interest in Wall Street. Uh,
Speaker 1: so I thought that I really wanted to pursue a
Speaker 1: career on the institutional side of Wall Street. Not easy
Speaker 1: to figure out, but ultimately Mary Lynch gave me an opportunity.
Speaker 1: In their institutional NBA training program. There were twenty six
Speaker 1: of us nbas, I want football coach, and pretty much
Speaker 1: everybody said, this football guy is not going to make
Speaker 1: you here. But ultimately the majority of those NBA's working
Speaker 1: for me and I wanted turning out okay, but that
Speaker 1: the transition from football to Wall Street the first time.
Speaker 1: So so you were at Merrill Lynch in the early
Speaker 1: nineteen eighties at the start of of an eighteen year
Speaker 1: bull market. What was it like in those days? That
Speaker 1: was a very different world than the world of today
Speaker 1: or even the world of the late nineties. I would
Speaker 1: agree now, i'd be After I went through my training program,
Speaker 1: I became an institutional bond salesman. So it was also
Speaker 1: an interesting time in the buying world because I didn't
Speaker 1: realize that up until then. But you take a lot
Speaker 1: more risks on your trading desk and fixed income than
Speaker 1: what you would have in the equity world, and rache
Speaker 1: were high, but they did. The bull market wasn't just
Speaker 1: in equities, the bull market was also in fixed income
Speaker 1: because race were coming down, and uh, there was a
Speaker 1: tremendous amount of things that you know, I needed to
Speaker 1: be able to learn. But frankly, I already knew how
Speaker 1: to handle myself on distress. I knew how to listen,
Speaker 1: I knew how to have an impact on people. And
Speaker 1: I think I was without question a much better bond
Speaker 1: salesman because of my experience as a coach. So so
Speaker 1: so for me and I frankly and I became a
Speaker 1: pretty prolific bond salesman. And then from there I wanted
Speaker 1: moving into executive management. In the late eighties, Mary Lynch
Speaker 1: had horrible three in the seventy million dollar mortgage backed
Speaker 1: security loss and that was very significant for us the
Speaker 1: time back then three seventy seventies, very young money. But
Speaker 1: I think Wall Street was learning also that you needed
Speaker 1: your leaders, your real leaders, to be an executive management positions,
Speaker 1: and they just weren't producers that that wanted getting promoted. Uh.
Speaker 1: But my ability to learn was going on the markets.
Speaker 1: How critical fixed income, as the role of the FED,
Speaker 1: all of those things which have a significant impact on
Speaker 1: the equity markets were all those things that I learned
Speaker 1: during that period. And we'll talk more about the bond
Speaker 1: market later, where where arguably still in the forty year
Speaker 1: bond bull market that began back in the yearly eighties
Speaker 1: when Vulcar broke the back of inflation. But let's stay
Speaker 1: with Merrill Lynch for now. You you were at Mother
Speaker 1: Meryll for seventeen years. What was your last role before
Speaker 1: you departed? I had I was the first person in
Speaker 1: the firm to go from the executive management executive management
Speaker 1: team on the institutional side to the private client side
Speaker 1: and um. Before I left, I was responsible for all
Speaker 1: investment products, the four O one K business, the insurance business,
Speaker 1: and the middle market business. So that's a pretty serious
Speaker 1: role and it obviously prepped you to become CEO of
Speaker 1: t D Merrit Trade. I think that was two thousand
Speaker 1: and one. Tell us about the transition from Meryll to
Speaker 1: t D What what was that like? Well, I think
Speaker 1: that I was leaving, you know, one of the greatest
Speaker 1: brands in the history of finance. We were, I think
Speaker 1: it's the time. I think we were an eighty billion
Speaker 1: dollar company. You know, we had I think sixty seventy
Speaker 1: thousand employed days and forty seven different countries. We were
Speaker 1: double a rated bond, and I was going from a
Speaker 1: company that had incredible stability to a company that was
Speaker 1: blowing up as the dot com bubble burst, and um
Speaker 1: Merritory was losing a lot of money. The market cap
Speaker 1: had gone down about seven million. And I hit that
Speaker 1: my homework before taking this job, and I thought it
Speaker 1: was probably a ten percent chance we might go out
Speaker 1: of business, a ten percent chance we might hit a
Speaker 1: real home run, but eight percent chance. No matter what,
Speaker 1: I was going to make you better. And then after
Speaker 1: I got there, I realized that I though there was
Speaker 1: a chance we go out of business. And one of
Speaker 1: the things that I learned pretty much early on, I'm
Speaker 1: not an expert, that we were really a technology firm
Speaker 1: and a financial service wrapper, and we needed to focus
Speaker 1: on what core competencies were so we could leverage those
Speaker 1: into competitive advantages, so we could be leaders in the
Speaker 1: market niches that we chose to participate in. By doing that,
Speaker 1: I would take half I got We were seven or
Speaker 1: eight different countries, I got out of virtually all of them.
Speaker 1: We were doing different businesses and different products. I got
Speaker 1: out of all of them, and I took that money
Speaker 1: half of it to offset or set the losses that
Speaker 1: we were having, and the other half I poured back
Speaker 1: into our core competencies. And core compacy was transaction processing
Speaker 1: well in the financial world as buying and selling stocks.
Speaker 1: And that was when we became very, very very significant
Speaker 1: in that arena. And once we kind of got ourselves straight. Now,
Speaker 1: the the recession after the dot com bubble buss March
Speaker 1: two thousands of market thousand and three, and this is
Speaker 1: around the middle of that, and consolidation had not begun
Speaker 1: in the industry, and that's when I felt that was
Speaker 1: a significant opportunity for us. So so let's talk about
Speaker 1: that period that bear market. Um Market peaked March two
Speaker 1: thousand around, did not bottom until October two, and then
Speaker 1: again a second bottom in March o three at about
Speaker 1: a thousand down. I have to imagine that you're running
Speaker 1: the hottest online training company at the time. Trading volume
Speaker 1: how to have really dropped off a cliff during that period.
Speaker 1: What was that like? Well, you know, Barry kind of
Speaker 1: you can almost make the parallel to what's going on today.
Speaker 1: Back in the nineties when everything was going incredibly well
Speaker 1: for everybody, uh the day trader because of the internet,
Speaker 1: uh became alive and UM and one of the things
Speaker 1: that in Merry Trade did they really did everything they could.
Speaker 1: They try to do a lot of other things. So
Speaker 1: they tried to focus on the day trader. Strategically, that
Speaker 1: was not a great decision because the day traders wants
Speaker 1: to market blew up per your reference, the day traders
Speaker 1: want up going out of business. So we needed to
Speaker 1: kind of restructure our entire business. But it was not
Speaker 1: to do something that we couldn't do. It was to
Speaker 1: focus on the ability to be able to trade, not
Speaker 1: the day trader, just an active trader platform and UM. Uh.
Speaker 1: So so at the time the industry that was tremendously
Speaker 1: because how that the industry is far greater supply than
Speaker 1: there is in terms of demand. But but trades had
Speaker 1: certainly significantly dropped off. But by two thousand and three,
Speaker 1: doing leading the industry and salivation and focusing on the
Speaker 1: emphasis that we focused on, UH, we start we started
Speaker 1: to do more trade than anybody else. Let's talk a
Speaker 1: little bit about how did coaching prepare you for running
Speaker 1: a giant financial organization. I think in terms of UM
Speaker 1: I've often said that I was a much better bond salesman,
Speaker 1: I think in a Wall Street executive because of my
Speaker 1: experience as a coach, and then when I went back
Speaker 1: to coaching, UH as a head coach, I think I
Speaker 1: was a much better head football coach because of my
Speaker 1: experience as a business leader. And UM, when you think
Speaker 1: about football, you need to be able to make decisions
Speaker 1: very quickly. Your entire career is dependent upon what you
Speaker 1: do on Saturday. You have an incredible stressful eighty hour
Speaker 1: work week. UH. There are no days off in the
Speaker 1: span of a five month season or so you need
Speaker 1: to You need to be able to understand people. You
Speaker 1: need to be able to motivate, inspire, You need to
Speaker 1: be able to discipline, you need to be able to insent. UH.
Speaker 1: You also need to have a very very well thought
Speaker 1: out strategy that would handle contingencies in terms of your
Speaker 1: opponents and what happened. But you have to be able
Speaker 1: to simplify that strategy in order to execute. So when football,
Speaker 1: you's only about eleven people functioning at once with zero error. H. Well,
Speaker 1: in the business world, there are a lot of firms
Speaker 1: I think that don't maximize their potential because it sounds
Speaker 1: like a grand deal of strategy but it's not simplified
Speaker 1: enough to really truly be able to execute. So if
Speaker 1: you take all those things together, um, and whether I
Speaker 1: was talking about football or whether I was talking about
Speaker 1: the business world, Uh, they would really be the same
Speaker 1: principles to these Actually, crycipals is the only thing that
Speaker 1: different Verry is the product. The product of football is
Speaker 1: very different from the product of finance, But the principles
Speaker 1: behind running a good business and successful business, being a
Speaker 1: good leader and each are really the same. Huh. It
Speaker 1: makes a lot of sense to me. I recall that
Speaker 1: merger between day Tech Online and t D Waterhouse. I
Speaker 1: was on a trading desk um early in my career,
Speaker 1: and I have a vivid recollection of my former trading
Speaker 1: buddies when I had been By that time, I was
Speaker 1: already off the desk kind of freaking out about the merger.
Speaker 1: Tell us a little bit about who day Tech was
Speaker 1: while you were running t D Waterhouse and what that
Speaker 1: experience was like going through a major merger. Okay, it
Speaker 1: was about two thousand and two, so I'd been there
Speaker 1: almost a year and we had gotten our at straight
Speaker 1: and Um, the first deal we did actually was a
Speaker 1: national discount broker and they were owned by Deutsche Bank,
Speaker 1: and we paid a hundred and fifty four millions to them,
Speaker 1: but we had no cash, so we had to do
Speaker 1: it in stock when we were worth about seven hundred millions,
Speaker 1: and if we had not gotten that deal done right,
Speaker 1: we would have gone out of business. And um with
Speaker 1: the day Tech deal, we were we were losing money.
Speaker 1: They were making money. They were by far our biggest competitor.
Speaker 1: They were taking market share from us, and uh, frankly,
Speaker 1: they would when they wanted to do something strategic, and
Speaker 1: they put together the memo of details associated with trying
Speaker 1: to do something like that. We didn't even get that,
Speaker 1: and they weren't interested in doing something with us. So
Speaker 1: I figured out who the who the leaders were. They
Speaker 1: were owned by private equity, the three dominant ones with
Speaker 1: t A and Bain and Civil Age, and I actually
Speaker 1: flew to Boston and that you know, a private room
Speaker 1: with Steve Pauka the Bain, and we kind of worked
Speaker 1: things out a little bit on the back of a napkin.
Speaker 1: The next day I met with their board and then
Speaker 1: shortly there I met with our guys and then eventually
Speaker 1: we figured it out. But again once again we didn't
Speaker 1: have any cash, so we had to do it for stock.
Speaker 1: So this was a fifty fifty deal. So we paid
Speaker 1: one billion one fifty for them when we were worth
Speaker 1: a billion one fifty and again we screwed that deal up.
Speaker 1: We are gone. We were out of business. But we
Speaker 1: did had a home run with n Debate and we
Speaker 1: had a homelown with day Tech and we were delivered
Speaker 1: above and beyond with anybody, so it we would right.
Speaker 1: So after the merger, you're now the biggest online trading
Speaker 1: firm at least if we're going by daily volume. What
Speaker 1: are the challenges of running a big technology company essentially
Speaker 1: in that space? Well, while when I got to a
Speaker 1: Merriort Trade, while you know, we were really struggling and
Speaker 1: from a financial perspective, one thing that that I thought, uh,
Speaker 1: merrit Trade did very well in the nineties was when
Speaker 1: they went public, they took a lot of that money
Speaker 1: they poured into marketing and they poured it into technology.
Speaker 1: So I was aware of that before I took the job,
Speaker 1: so it said me, eat, I don't frankly, I didn't
Speaker 1: know much about online brokerage. I didn't know much about technology.
Speaker 1: But there's nothing new in that, but I knew how
Speaker 1: to run the business and I had people around me
Speaker 1: that all new all those things. So I think with
Speaker 1: regard a technology, I think you've got to be aware
Speaker 1: of that. You've got to be religious with your fervor
Speaker 1: in terms of making sure that you're staying on top
Speaker 1: of how can we break down what the contingent plan,
Speaker 1: what's going to happen. There's a lot going on. How
Speaker 1: are we going to be able to do that? And
Speaker 1: you know, we needed to write people in leadership roles
Speaker 1: and we needed to make sure that we knew it
Speaker 1: was a real commitment our manager's part and as they said,
Speaker 1: we really wanted to financial serf. We were really a
Speaker 1: technology firm and financial service wrapper. And as long as
Speaker 1: you've got your priority straight, that certainly helped us out
Speaker 1: significantly over time. So given that you aren't an asset
Speaker 1: management shop, you aren't charging fees based on a U
Speaker 1: M S. What what did the revenue break down look like?
Speaker 1: You know, in between the dot com collapse and the
Speaker 1: financial crisis that it's about is modern and era of
Speaker 1: online trading that's separate from from today's ear as I
Speaker 1: can imagine what were the revenue sources. Was it strictly
Speaker 1: execution and trading were and some margin loan lending or
Speaker 1: was were there other lines of revenue? Well, there are
Speaker 1: basically three ways that I think a broke it firm
Speaker 1: to make money with regards to at least with regards
Speaker 1: to its trading. The first of the commissions you're charging
Speaker 1: in and the second one would be the way you
Speaker 1: manage your assets, which are the client assets on the ballancing.
Speaker 1: You know, what do you do with those assets? Do
Speaker 1: you invest? How do you handle that? That became a
Speaker 1: big issue in two thousand and eight, of course that's secondly,
Speaker 1: and then the third way to payment fraud the flow.
Speaker 1: So there'd be the three ways in effect that you
Speaker 1: can make money back then. Back then, though, the dominant,
Speaker 1: the dominant um our, dominant revenue stream was for trading
Speaker 1: and our commissions. Now in your mind when you're running
Speaker 1: this company and trading is sixty. I remember before the
Speaker 1: SWAB t D merge, and we'll talk about that later,
Speaker 1: I remember reading that it was something like fifty revenue
Speaker 1: a t D was trading was a much smaller percentage
Speaker 1: of SCHWAB, so it became easier for them to drop
Speaker 1: the cost structure. But in your wildest imagination, did you
Speaker 1: ever suppose there would be a time when trading would
Speaker 1: become free? Well, you know, I think the I think
Speaker 1: in Chuck Schwab's book, he actually I think predicted, you know,
Speaker 1: back in the early nineties or at some point in
Speaker 1: time that you know it might be it might be free.
Speaker 1: But I think from a business perspective I talked earlier
Speaker 1: about you have to have a thoughtful strategy that handles
Speaker 1: contituencies down the road, problems, issues that pop up. Well,
Speaker 1: there was no question. You just look at the history
Speaker 1: that you know, the uh fees commissions were being squeezed
Speaker 1: and squeezed and squeezed, and they were just going to
Speaker 1: continue to go down. So we always believe that there
Speaker 1: was a shot that one day that made the zero commissions,
Speaker 1: and we better be prepared for that. But we didn't
Speaker 1: want to waste all of our time on that because
Speaker 1: we really had businesses we gotta run. But probably i'd
Speaker 1: say pretty much every board meeting there was some discussion.
Speaker 1: Almost every board meet there's some discussion about like what's
Speaker 1: going to happen if we want to commission want to
Speaker 1: go into zero and um, and then eventually, of course,
Speaker 1: kind of we got to zero. I think we got
Speaker 1: there faster than anybody anticipated when Schwab decided that to
Speaker 1: cut commissions to zero. But but but well, there was
Speaker 1: always that. We always thought that that was that possibility.
Speaker 1: In my head, if I had to guess, I would
Speaker 1: have guessed probably that would have happened about two thousand.
Speaker 1: So I'm trying to think back to what it was
Speaker 1: like then, and I'm only imagining these board meetings. At
Speaker 1: what point do you look at margin pressures and say,
Speaker 1: we have to continue to get bigger, we have to
Speaker 1: continue to get more efficient, and we have to be
Speaker 1: the best user of technology of anyone. Otherwise are businesses
Speaker 1: at risk? I think from the very beginning that was
Speaker 1: the principle. And I think that also the reason. Part
Speaker 1: of the reason why I thought it was so important
Speaker 1: to leave the consolidation in the industry was because you
Speaker 1: wanted scale. But I think the best answer to zero
Speaker 1: commissions is a real quality asset base. So the focus
Speaker 1: on being able to gather assets also became very, very
Speaker 1: important to us. So the consolidation helped us, help help
Speaker 1: us with synergies, helped us with scale, help only helped
Speaker 1: our profit margins allowed us to grow market share. When
Speaker 1: we purchased data. We Meritrade bought TD Waterhouse from TV
Speaker 1: Group and that's one became TD and meritratee. But they
Speaker 1: also were big in the r I a business, and
Speaker 1: that was a business I really want to be in
Speaker 1: as well, because I thought that that allowed us to
Speaker 1: go after the more serious, longer term investor. And uh
Speaker 1: so you're you're spreading your risk out over the different
Speaker 1: types of investors that actually out there, not just the
Speaker 1: trader or the active trader, but also the long term investor.
Speaker 1: And you're gathering assets while while we go. So when
Speaker 1: we did, you know, when when we announced the Schwab deal,
Speaker 1: I think we're at about one point five trillion in assets.
Speaker 1: You know when I began that, we had twenty four
Speaker 1: billion in assets. So making sure your technology was top notch,
Speaker 1: always testing it, making sure you continue to prioritize where
Speaker 1: you're where you're going to invest capital, and the consolidation
Speaker 1: growing assets. Uh it was all part of the plan,
Speaker 1: and you know it was it was very very effective,
Speaker 1: quite quite fascinating. So let's talk a little bit about
Speaker 1: this business of free trading. And I have to start
Speaker 1: um with the obvious question, Hey, I learned in economics
Speaker 1: there's no such thing as a free lunch. Is free
Speaker 1: trading really free? Or are there costs that we're just
Speaker 1: not aware of as as traders. I think you've got
Speaker 1: to look at that from two perspectives. First, do it
Speaker 1: from the perspective of the trader. Uh. So, everything is
Speaker 1: pretty simple. You go to your website, boom boom boom,
Speaker 1: You put in the trade and gets executed almost always instaneously,
Speaker 1: and you get you get you have to get the
Speaker 1: best execution at that moment in time of the marketplace,
Speaker 1: and all the time you actually get, uh, you get
Speaker 1: price improvement. Right, that's what you see a front and
Speaker 1: that course you zero. Now look at the back end
Speaker 1: behind that, you've got the zillion dollars worth of infrastructure, technology, regulatory,
Speaker 1: many many, many different things that need to take place.
Speaker 1: So when you do the trade, it goes through the
Speaker 1: broker right to the market maker. The market maker in
Speaker 1: effect has a spread. They have to give the client
Speaker 1: the best, the best execution. At that time. You decide
Speaker 1: as the broker how much price improvement you want to
Speaker 1: give them, and then you keep the rest in robes
Speaker 1: of prayment porta flows. So the way you pay for
Speaker 1: this is through the payment porta flow. So on the
Speaker 1: front end, the client really does get excellent execution and
Speaker 1: here or she is pay getting it for. But at
Speaker 1: the back end, this tremendous expense involved as well as
Speaker 1: UH complexity, and that gets taken care of by payment
Speaker 1: wort flow. So to simplify that, back in the days
Speaker 1: when it was eight dollar trades or ten dollars or fifteen,
Speaker 1: I think the last we saw it was about seven
Speaker 1: bucks the trade. There wasn't that necessarily that payment for
Speaker 1: order flow. Were traders getting better execution less spread going
Speaker 1: to the market maker back when trades had a fee
Speaker 1: attached to them. From the time I showed up at
Speaker 1: a merry trade, you know, the number one priorities make
Speaker 1: sure we take care of our clients. So it was
Speaker 1: always a commitment to make sure that they got uh
Speaker 1: the best execution. Now, when you were making money back then,
Speaker 1: I'm sorry, when you were when you were charging fees
Speaker 1: back then, you did. You got both. You've got the
Speaker 1: commission as well as the spread payment porter flow. But
Speaker 1: the client was still getting best execution, but they were
Speaker 1: paying eight dollars or five dollars or seven dollars or
Speaker 1: whatever that was. Now keep the mind to bury back then,
Speaker 1: you know, technology was not as good as it is
Speaker 1: twenty years later when mission went to zero. But it
Speaker 1: was good, but not the way it is today. And
Speaker 1: obviously technology improves a mystically from one year to the next,
Speaker 1: certainly from every two or three years to the next
Speaker 1: two or three years. So so you had that going on.
Speaker 1: But with regard to that, the individual investor still would
Speaker 1: get price improvement. So when I stepped down, when we
Speaker 1: by the time we closed our deal on the we
Speaker 1: on the payment porter flow piece that we were able
Speaker 1: to control the we gave price improvement on a ratio
Speaker 1: three and a half to one, So the client benefited
Speaker 1: three and a half to one times what we would
Speaker 1: have benefited from it. So this raises the question our
Speaker 1: custodians able to make up the lost revenue? Are they
Speaker 1: getting it from somewhere or is this just becoming an
Speaker 1: increasingly low margin business When when we look at a
Speaker 1: shop like Schwab, I think the number I saw when
Speaker 1: they announced the t D deal was that of the
Speaker 1: revenue came from the float, from the money they made
Speaker 1: on cast sending around overnight. Right. So so the way
Speaker 1: the way you make money, you can make money by
Speaker 1: your commissions and they go away, then you have to
Speaker 1: pay moreford fold. But then you have your asset base
Speaker 1: and the ability of any broker, firm or bank to
Speaker 1: re to take those assets and reinvest those is another
Speaker 1: way for to to generate incremental revenue for that particular
Speaker 1: firm or bank. Uh. Now, I think I think when
Speaker 1: you when you look at that situation specifically, uh, you
Speaker 1: also start to recognize them as as interest rates. With
Speaker 1: higher interest rates, you know you can you can you
Speaker 1: can take advantage of the yield curve there where you
Speaker 1: might be paying one to the client going three years
Speaker 1: back now, but you might be able to make three
Speaker 1: or four or five pc in the case of a bank,
Speaker 1: maybe doing a mortgage in the case of US investing
Speaker 1: in fixed income type securities. But you would You've got
Speaker 1: to manage that because is your ballacy and you still
Speaker 1: of course of the liability to to to your client base.
Speaker 1: But they're the different ways you make money. I would
Speaker 1: like that one more point that's off trading. So keep
Speaker 1: in mind that that you want to be able to
Speaker 1: diversify from treating as much as you reasonably can. So
Speaker 1: therefore the growing of the assets, the use of the
Speaker 1: ira A, the R, the use of of robot type
Speaker 1: portfolios and different asset allocation tools and risk measment tools
Speaker 1: help you do that help you be able to diversify.
Speaker 1: Maybe getting involved more with Criticum is another way to
Speaker 1: be able to diversify. So you want to be able
Speaker 1: to to diversify your revenue stream away from trading. But
Speaker 1: with regard to the trading, you still make money to
Speaker 1: pay more for the flow as well as what you
Speaker 1: do with the assets. When you have very low interest
Speaker 1: rates as we do today and have for a while,
Speaker 1: that's more difficult to do. Huh. So what do you
Speaker 1: think of apps like robin Hood that have gamified the
Speaker 1: concept of trade aiding, especially for young inexperienced UM people
Speaker 1: who are you know, board stuck at home and and
Speaker 1: robin Hood makes this kind of fun. Well, I think
Speaker 1: number one, I think it is great that we've got
Speaker 1: you know, younger people coming into the marketplace, even if
Speaker 1: they're coming in initiative day traders. I think because those
Speaker 1: people are so acquired and so connected and have played
Speaker 1: games themselves, but are certainly incredibly efficient with regard to
Speaker 1: what they have got to technology. I think the idea
Speaker 1: of gamifying that was I think probably a pretty good
Speaker 1: marketing tool. And uh, with the leadership that that the
Speaker 1: retail investor has, the day trader rather has seen from
Speaker 1: the Reddit and the asked Kevin's of the world, etcetera. Uh,
Speaker 1: you know, they've been able to put on some pretty significant,
Speaker 1: pretty significant trades. The concern that I have is that,
Speaker 1: so I give the retail investment lab credit for that,
Speaker 1: but the concern I have is that think back to
Speaker 1: the nineties when the dot com bubble worst. It was
Speaker 1: significant day traders in the nineties, they went out of
Speaker 1: business at some point in time. We've had a pretty
Speaker 1: significant bull running here on eqtually is the last five years,
Speaker 1: the last two three years. You know, we've had some
Speaker 1: really good day trading going on. But at some point
Speaker 1: the market is going to turn and and I think
Speaker 1: it's it's behose the Robert Hoods of the world. A
Speaker 1: merrit trade does this, Schwab does this, now it schwab
Speaker 1: Swab does this. Other firms that have been around a
Speaker 1: while do this. But you've got to do You've got
Speaker 1: to educate your client. So, for example, let's say you
Speaker 1: have a game stop trade on you know, you bought
Speaker 1: it a ten, and it goes to, well, should you
Speaker 1: have taken something over the table? No, We're gonna wait
Speaker 1: to two. It gets to it takes something on the table.
Speaker 1: I think you need to to help people understand how
Speaker 1: to manage their risk win in those situations. Because of
Speaker 1: the markets really turned around and go the other way
Speaker 1: for a prolonged period of time, I would think that
Speaker 1: the fate of the day trader would be similar to
Speaker 1: what it was in the nineties. You know, that makes
Speaker 1: a lot of sense. The other question I wanted to
Speaker 1: ask you about online trading. I don't remember which CEO
Speaker 1: said this it It could have been Tim Buckley at Vanguard,
Speaker 1: But one of the questions um that have come up
Speaker 1: has been about cybersecurity. How much should this be keeping
Speaker 1: the people running current trading shops up at night these days?
Speaker 1: How dangerous is the risk from hackers and others accessing accounts,
Speaker 1: and how much more work needs to be done to
Speaker 1: make sure that there's an increased level of cybersecurity for
Speaker 1: financial firms. Whatever the most is a firm can do,
Speaker 1: they probably have to increase that, So it's got to
Speaker 1: be the number one priority. I know, when I was
Speaker 1: asked a lot of time than using the term that
Speaker 1: you just used to know what would really keep me
Speaker 1: up at night? And I knew we were doing a
Speaker 1: really good job with with executing our business plan, and
Speaker 1: I knew we're doing a great job with our operation
Speaker 1: with our people, etcetera, etcetera. But at the end of
Speaker 1: the day, we're doing everything we and to make sure
Speaker 1: our technologies fail through. But you know, you know that
Speaker 1: nothing is perfect. And what happens if we get blindsided?
Speaker 1: What happens if we get a hacker. Now we we've
Speaker 1: got people who do nothing to try to hack into
Speaker 1: our system, so we can prevent hactors from hacking into
Speaker 1: our system. So this is not going away. And and
Speaker 1: and to me, Barry the single greatest risk in the
Speaker 1: world today's terrorism. And terrorism can come at you a
Speaker 1: number of different ways, not just by flying into a building.
Speaker 1: But you know, they can have a bio you can
Speaker 1: have a biological attack, and you can have a chemical attack.
Speaker 1: You can have obviously a nuclear attacking, but you can
Speaker 1: also have a cyber attack. And the cyber attack is
Speaker 1: the one that probably scares me the most. Uh So
Speaker 1: from the United States perspective in terms of just national defense,
Speaker 1: we have to we have to make this a number
Speaker 1: one priority in every business uh in our country and
Speaker 1: probably around the world that has a serious technology uh
Speaker 1: part of what they do, and I think that should
Speaker 1: probably everybody. You've got to be able to protect that
Speaker 1: and do everything. You can't stay ahead of the game.
Speaker 1: And if you don't do that, you're gonna fall behind,
Speaker 1: and you can't afford to fall behind. Let's talk a
Speaker 1: little bit about your return to coaching. What made you
Speaker 1: decide to go back into football. When I stepped down
Speaker 1: to two thousand and eight as CEO, and that's one
Speaker 1: of the firm asked me to be chairman. Um we
Speaker 1: had had a return for our shareholders, and we outperformed
Speaker 1: every financial phone and the globe ben and in two
Speaker 1: thousand and eight when the world was bowling up, and
Speaker 1: that includes the financial crushis but when the world was
Speaker 1: bowling up, we got it right. We didn't do any
Speaker 1: of the things everybody else then. And I said part
Speaker 1: of that because, as I mentioned, I grew up in
Speaker 1: the fixed income world and I pushed the envelope I'm
Speaker 1: always pushing it. I'm very very aggressive, but never to
Speaker 1: the point where you cross the line, and never to
Speaker 1: the point where you cross the lines to aggressively i e.
Speaker 1: With leverage, where you potentially put your institution at risk.
Speaker 1: So we got it right. Uh So I sat down
Speaker 1: two thousand and eight, and I had been working pretty
Speaker 1: in my father's foot store since I was ten years old,
Speaker 1: and I was ready. It was ready to try to
Speaker 1: take a break. And um, but because we had done
Speaker 1: so well. Um, Frankly, I had never been in more
Speaker 1: demand in my career and there could have been some
Speaker 1: very very significant opportunities, but I didn't step down to
Speaker 1: take other opportunities. Um. And then I got a call
Speaker 1: from a group of alumni at Yale telling me that
Speaker 1: the football job may be opening. It wouldn't be interested,
Speaker 1: And I remember literally I was in a hotel in Vermont,
Speaker 1: and I remember looking at my telephone and a pretty
Speaker 1: get back to my year and said, guys, I said,
Speaker 1: you know, I have a coach for over twenty years,
Speaker 1: and said, we know that, but we spent a lot
Speaker 1: of time looking at the skill sets that required of
Speaker 1: a head coach. We think you're not only had those
Speaker 1: skill sets, but you have better advantage of the people
Speaker 1: don't have. And I said, there's only one problem. What's that? Well,
Speaker 1: I hard at thirt or five years of college football,
Speaker 1: nothing like this has ever happened. And uh, somebody like
Speaker 1: you is not going to be hired unless the assigned
Speaker 1: off from the president. And the typical president in academia
Speaker 1: may be very, very smart, but they're not risk takers.
Speaker 1: They're not risk reward people. But think about think about it.
Speaker 1: And I really did, and I really did, and I
Speaker 1: spent the next six seven months to truly, truly, you know,
Speaker 1: examining my conscious there's something that I wanted to do,
Speaker 1: and uh, looking at the pros and the cons, and
Speaker 1: it hit me that number one, at this point in
Speaker 1: my life, while there are a lot of other things
Speaker 1: I could do, what would I not get greatest? Would
Speaker 1: I not get greater satisfaction by going back to football,
Speaker 1: I'm really having an impact on helping Uh, six eighteen
Speaker 1: and twenty two year old boy really kind of growing
Speaker 1: up and becoming a man. And I didn't think I
Speaker 1: could do anything else that would give me greatest satisfaction.
Speaker 1: That number two, when I think this was subconscious, I
Speaker 1: didn't acknowledge it out loud, but I do think it
Speaker 1: was subconscious in hindsight that when I left football, uh,
Speaker 1: to go to Wall Street when my career path was
Speaker 1: was on a great path, when my career was on it,
Speaker 1: when it was a great path, and um uh, I
Speaker 1: think without question that I got on my ami. I think,
Speaker 1: and I'm not done to Wall Street. I think I
Speaker 1: would have been a major college coach at you know,
Speaker 1: the biggest schools in the country. And I think I
Speaker 1: would have been very successful doing that. And and and
Speaker 1: and maybe there was a piece of me that, you know,
Speaker 1: wanted to take a shot at that really interesting. So
Speaker 1: before I asked you how being a football coach prepared
Speaker 1: you for a career in finance, let me flip that question.
Speaker 1: How did running a big technology and finance company prepare
Speaker 1: you for your re entry into coaching? I think with
Speaker 1: regard to I think, I think in the business world, uh,
Speaker 1: we were always so aggressive and we're trying to This
Speaker 1: is true. Also, the divisions are responsible for a Marl
Speaker 1: Lynch so aggressive and trying trying to do as much
Speaker 1: much as you can. To me, it wasn't so much
Speaker 1: the bottom line. It was maximizing your potential. So if
Speaker 1: you can earn a dollar and the street expect you
Speaker 1: to earn a dollar, and you come into dollar Pen,
Speaker 1: everybody's patting you on the back. But I would want
Speaker 1: my executive team to know was the dollar pen the
Speaker 1: most we could do or should we have done a
Speaker 1: dollar twenty uh and and so maximize you pretend so
Speaker 1: is football or business? What was always a priority of mine.
Speaker 1: I certainly felt that showing in the business world. The
Speaker 1: second piece of it that that in order to do that,
Speaker 1: in order to have you know, thousands of people and
Speaker 1: you know multiple things going on, you had to absolutely
Speaker 1: make sure you had the right people around your period.
Speaker 1: You had to make sure you the right people around
Speaker 1: you that brought into what you believe in the people
Speaker 1: that you count on a trust uh And you had
Speaker 1: to be willing to make tough decisions if that wasn't
Speaker 1: the case. I think you also then needed to be
Speaker 1: able to definitely obviously delegate to those people. And again
Speaker 1: I said before, you need to have a sophisticated enough
Speaker 1: strategy to handle detension down the road, but simplify it
Speaker 1: so you can execute every one of those things varied
Speaker 1: were things that helped me become a better football coach.
Speaker 1: So my number one priority was higher the best possible
Speaker 1: people I can. They got to buy into my leadership philosophy,
Speaker 1: got a buy into what I'm doing that they don't.
Speaker 1: They're not going to be part of the program going forward.
Speaker 1: And I am a world class delegator. And if you
Speaker 1: are running my offense or you're running a defense or
Speaker 1: whatever your particularly, I maybe I'm expecting you to do
Speaker 1: that and I'll do what I can to help you.
Speaker 1: Of course, during the game, certain decisions head coach gotta make,
Speaker 1: but I am counting on you to be able to
Speaker 1: do that very very similarly to what I did did
Speaker 1: when I was on Wall Street. So so you have
Speaker 1: you can't micromanage, and you've got to have the right
Speaker 1: people in the place right that you delegate to. And
Speaker 1: then the frankly, you monitor progress. So here's a question
Speaker 1: that I guess is obvious, but I'm just thinking of
Speaker 1: it now. There's a twenty year gap between your two
Speaker 1: coaching stints. How has the game changed, How have the
Speaker 1: student athletes changed, How has the technology and the officiating changed.
Speaker 1: How different it's college football today from back when you
Speaker 1: were a coach in the late seventies and eighties. So
Speaker 1: first of all, you know, they simple thing that they
Speaker 1: took the hashmah. They important to the middle a little bit,
Speaker 1: so you have in effect on wider field number one.
Speaker 1: Number of the game has certainly spent up. You know,
Speaker 1: very few people even huddle up today. Now we did
Speaker 1: that too, but that was that was a two minutes drill,
Speaker 1: and we need to handle that bow offensively defensively. But
Speaker 1: the only time people really did that was whether in
Speaker 1: a two minutes drill. Now pretty much everybody does that. UM.
Speaker 1: I think that when you look at sets that existed
Speaker 1: there by by that I mean formations. UH typical offensive
Speaker 1: is very much spread out across the field. That wasn't
Speaker 1: always the case back then. So the games faster, there's more,
Speaker 1: there was more uh combination, I think of passing and running,
Speaker 1: probably more passing, UM and the and the speed of
Speaker 1: the game. Now. I think today there's also more of
Speaker 1: an emphasis placed on schemes, whereas when I coached first time,
Speaker 1: he's probably more of an emphasis placed on fundamentals. So
Speaker 1: I think were we both and fundamentals is one of
Speaker 1: the things that I think we give us a competter advantage.
Speaker 1: Now let's look at the player. So you've got you know,
Speaker 1: you're eighteen year old kid, who's who's Who's constantly connected
Speaker 1: because of technology, So there's more information coming at him
Speaker 1: or her than has ever been the case in the past.
Speaker 1: And I think because that tends to be a little
Speaker 1: bit more pressure perhaps to produce or how you interact
Speaker 1: with your peers or whatever it might be. But so
Speaker 1: while the world has changed and everything is faster, and
Speaker 1: everybody's connected, and everybody's got you know, look playing a
Speaker 1: look at living at the phones all the time. The
Speaker 1: basic thing that makes up the human being a young boy,
Speaker 1: a young girl. Uh as you as you go through
Speaker 1: the beginning of adulthood, that hasn't changed at all. It
Speaker 1: hasn't changed at all. So I think about what it
Speaker 1: was like when I was growing up, it was like
Speaker 1: when my children growing up. I think what my players
Speaker 1: were like the first time, and what players are like
Speaker 1: this time. And the concerned about preer pressure, the concerned about,
Speaker 1: you know, the issues associated with drugs or or sex
Speaker 1: or alcohol, the pressure potentially that might come from a
Speaker 1: parent or with the respective coaching, with respect of your teacher,
Speaker 1: or with your girlfriend or boyfriend or whomever it might be,
Speaker 1: that hasn't changed. So I think number one, you've got
Speaker 1: to recognize that. And while the world's change around the
Speaker 1: basic human being, what makes us pick, what makes us
Speaker 1: stick inside? I think that was true fifty years ago
Speaker 1: the rats today. I think it's gonna be true fifty
Speaker 1: years from now. So there are two aspects to student
Speaker 1: athletics that I think have changed, and I want to
Speaker 1: get your opinion on the First is the athleticism of
Speaker 1: the players. It certainly feels like players today are faster, bigger, stronger.
Speaker 1: Is that my imagination or our student athletes really in
Speaker 1: a level of competitive shape that's noticeably different than twenty
Speaker 1: five years ago? Right, you see that exactly right? And
Speaker 1: I think part of that is tremendous episodes, and of
Speaker 1: course in terms of strength training and and and and
Speaker 1: workouts and things like that at that frankly take place
Speaker 1: over the span of the entire year. So if you
Speaker 1: look at football, but this is true in other sports.
Speaker 1: You know, our guys list at least twice a week,
Speaker 1: and the off season that becomes three or four times
Speaker 1: a week, perhaps five times a week, depending on what
Speaker 1: we have going on. So in the fact you're working
Speaker 1: out year round, that's number one. And the number two
Speaker 1: pieces you know, after twenty five years to look at
Speaker 1: mortality rates. You know, seventy five years ago, the TALI
Speaker 1: rate may have been fifty. Today is eighty five. So
Speaker 1: there's also the also the element of evolution that has
Speaker 1: taken place, you know, the typical a little bit fast,
Speaker 1: a little bit stronger, a little bit larger, a little
Speaker 1: bit maybe a little bit smarter, all of those things
Speaker 1: I think have taken place over time. And then the
Speaker 1: second issue that came up over the past couple of
Speaker 1: years is the concept of uh the n ci A
Speaker 1: and student athletes demanding control over their image, control over um,
Speaker 1: how how licensing is done with their names, and even
Speaker 1: student athletes getting paid. What are your thoughts on this area? Well,
Speaker 1: being a business guy, you know, Barry, I certainly I
Speaker 1: think you've got to follow at the money and you've
Speaker 1: got to pay close attention to that and um uh
Speaker 1: so I think if you really understand money flow on
Speaker 1: how it works a lot of times it's not that
Speaker 1: you can not that your soothsayer or fortunate all, but
Speaker 1: you kind of tell what's going to openly happen. And
Speaker 1: with regards to this, to preface it for a moment,
Speaker 1: when I went to college, I was married, I had
Speaker 1: a daughter. At every gamemond education, and we have guys
Speaker 1: so on the team only eighty five scholarships some means
Speaker 1: a forty guy a team that that do not get aid,
Speaker 1: and they treat exactly like the other guys, and they've
Speaker 1: got to work just as hard as the other guys,
Speaker 1: and they're not getting money. So you would think them
Speaker 1: to be able to provide a student athlete with room board, books, tuition.
Speaker 1: You know, it's a pretty significant thing. But the TV
Speaker 1: contracts are so significant, are so significant today that the
Speaker 1: amount of money of Power five school makes from or
Speaker 1: a league from their conference, just in football alone is astronomical,
Speaker 1: far greater than let's say what the entire athletic butget
Speaker 1: would be at Coastal Carolina. So so, with that amount
Speaker 1: of money, and look at coaches at the Par five
Speaker 1: level getting paid four or five, six, seven, eight, nine
Speaker 1: million dollars and the schools being able to get rid
Speaker 1: of a coach and not have a problem with a
Speaker 1: ten million dollar payout and hire another guy for six
Speaker 1: seven million dollars. A year. There's a lot of money there,
Speaker 1: and I would suggest that a lot of money is
Speaker 1: actually being wasted. So for the student after you raised
Speaker 1: the hand and say, hey, I'm a tied up with
Speaker 1: some here. And I think the N double A could
Speaker 1: have been could have taken a far greater leadership role
Speaker 1: in this, but they didn't. And um uh so, so
Speaker 1: it's at the end of the day, I think, I
Speaker 1: think this is part of evolution, that we're moving in
Speaker 1: this direction as student athletes. Uh. Now, I think the
Speaker 1: majority of the states, I think have already voted that, uh,
Speaker 1: you know, student athletes can get paid for the use
Speaker 1: of their image. Uh. And I don't necessarily disagree with
Speaker 1: any of that. So I think that's the way of
Speaker 1: the world. Think that's the way the dolls are going.
Speaker 1: Are there enough dollars go around so I can appreciate
Speaker 1: that happen. So it's gonna happen. Take a leadership role
Speaker 1: in it. Uh. The issue the concern that I have
Speaker 1: is that this becomes easier to cheat. So we go
Speaker 1: back in the seventies, the sixties and the seventies, wasn't
Speaker 1: a comment to give give a player money. It wasn't common,
Speaker 1: but you know you're doing that an effort to be
Speaker 1: able to recruiter as certainly it happens in all sports,
Speaker 1: but probably especially basketball where you really only need one
Speaker 1: guy to really make a difference in the ultimate team.
Speaker 1: So but then then you show what happened SMU, you
Speaker 1: show it having a couple of other programs when when
Speaker 1: when they got the death penalty. So the NT double
Speaker 1: A and COUG football has really been very very strict
Speaker 1: with that over time. Well, now, if individual players you
Speaker 1: can get paid on their own because they're using their image,
Speaker 1: or there's enough money to go around, and the student
Speaker 1: athlete is getting some of that. Um, I worry about
Speaker 1: how that gets controlled. I worry about I worry about
Speaker 1: whether or not teams And there's so much money involved.
Speaker 1: As I pointed out a minute ago, so much money involved,
Speaker 1: there is even more of a propensity potentially to take
Speaker 1: advantage that. By that, I mean crossing your line and cheating.
Speaker 1: So I see, I see an uppick in that, which
Speaker 1: is a negative. But moving this direction I think is
Speaker 1: the way of the world. And I'd rather do with
Speaker 1: it and have a control on it than than you know,
Speaker 1: follow it along. Um. Since we're talking about getting paid
Speaker 1: for UM playing, let's talk about getting paid for coaching.
Speaker 1: I read something fascinating in USA today. UM as part
Speaker 1: of the Coastal Carolina cutbacks, you agreed to forego your
Speaker 1: salary and accept a dollar just as a formality, making
Speaker 1: you arguably the best bargain in college athletics. How do
Speaker 1: you respond to that? I think even with my salary,
Speaker 1: I was a pretty good bargain for college athletics. But
Speaker 1: I think at a dollar, at a dollar, that's a
Speaker 1: deal with with my with a dollar, I think, especially
Speaker 1: with my background and and why I take incredible, incredible
Speaker 1: pride pride in being a football coause I'm not just
Speaker 1: a football coach and UM with the university that I'm
Speaker 1: associated with, you know, whatever I can do to kind
Speaker 1: of participate in that or help, you know, I want
Speaker 1: to be able to do so. So we were in
Speaker 1: the middle of a global pandemical course and a lot
Speaker 1: of people have sacrifice, and uh, you know, I thought
Speaker 1: it was only fair that he gave up my salary,
Speaker 1: and that also given your background in finance and management,
Speaker 1: it really raises the question what do you do for
Speaker 1: the college over and above? Just and I know it's
Speaker 1: a full time job, but just being a coach. I
Speaker 1: kind of picture you as being able to pick up
Speaker 1: just about any sort of role and run again, not
Speaker 1: to mix metaphors, but run with the ball on just
Speaker 1: about anything you could possibly do for this cool well.
Speaker 1: I think one of the things that you know, I
Speaker 1: certainly had had a close it was Dave Descenzo, our
Speaker 1: previous president who just stepped down recently. Um that you know,
Speaker 1: he was the guy that, frankly, uh put his credibility
Speaker 1: on the line by hiring me. So we always had
Speaker 1: a good relationship, and he and I would be relatively
Speaker 1: frequently and talk about different things he had going on.
Speaker 1: I would always have to give him my opinion. Um
Speaker 1: I was I was somewhat instrumental. And and uh the
Speaker 1: current president that we had that they just officially began
Speaker 1: in January, Uh, Michael Benson. And Uh. The guy has
Speaker 1: an incredible academic resume. Frankly that the best of anybody
Speaker 1: we have on campus. He's your true scholar. He speaks
Speaker 1: multiple language, he plays multiple multiple instruments, but he's also
Speaker 1: an athlete himself. Is children roughly, and he very much
Speaker 1: understands and believes and appreciates the significant that athletics can
Speaker 1: take uh in uh in a university life. So my
Speaker 1: titles today have he stepped down in two thousand and eighteen.
Speaker 1: My titles today are, I am executive advisor to the president,
Speaker 1: and he and I probably try to have dinner every
Speaker 1: couple of weeks to talk about what he's got going on.
Speaker 1: And again, he's new, so he's making a lot of
Speaker 1: changes and he all his decisions, but we'll talk about
Speaker 1: a lot of that. And then, yes, I'm sure of athletics,
Speaker 1: but the only thing, only responsibility I have in athletics
Speaker 1: is football. So football does does report directly to me,
Speaker 1: and so there there M there might two roles, but
Speaker 1: I think uh President Benson especially will not hesitate to
Speaker 1: use me in different roles for example, maybe visit the board,
Speaker 1: talk about different things, etcetera. Uh So I'm happy for
Speaker 1: them to to to leverage whatever my experiences may be.
Speaker 1: Before we get to our favorite questions that we ask
Speaker 1: all of our guests, I have a curveball I want
Speaker 1: to throw at you, and it's this quote from Roger's
Speaker 1: stare back, which is, it's unlikely that any other candidate
Speaker 1: has ever been as remarkably successful in two unrelated fields
Speaker 1: of endeavor, football and finance. As Joe is in so so,
Speaker 1: tell us about your relationship with Roger Storeback, who, by
Speaker 1: the way, for listeners who may not be familiar with
Speaker 1: his history, not only was he a spectacular football player,
Speaker 1: but he also built an amazing commercial real estate business
Speaker 1: that was sold for I think half a billion dollars
Speaker 1: like a giant winning transaction. Tell us a little bit
Speaker 1: about your relationship with Roger Stoback, you know, to add
Speaker 1: one point there that I think it's worth adding as well,
Speaker 1: Barry that you know he also played at the Naval
Speaker 1: Academy where he was hiding a trophy one. Then he
Speaker 1: went on to serve our country as he graduate Naval Academy,
Speaker 1: so he missed about four seasons or so as as
Speaker 1: a pro football players still had and still had the
Speaker 1: career he had. So when I decided that I want
Speaker 1: to go back to football, I recognized that I wanted
Speaker 1: to be able to reach out to as many people
Speaker 1: as were practical that I thought maybe could give me
Speaker 1: some insight. And one of those people was Roger now
Speaker 1: one of my friends from all hot Uh former Admiral
Speaker 1: of Bob Bell. He went to the Naval Academy around
Speaker 1: around the same time that Roger did, and you know,
Speaker 1: they were friends. So he made that introduction and I
Speaker 1: went down to Dallas to meet with him, and he
Speaker 1: became friends. Wasn't uncommon for us to have dinner, a
Speaker 1: breakfast if I were in town, and he never hesitated,
Speaker 1: you know, to to to talk to me if I
Speaker 1: reached out for something. So so so that so that
Speaker 1: ability for me to just have access to him by
Speaker 1: itself was I think, really really terrific. And as you
Speaker 1: pointed out, he's the one guy too that had not
Speaker 1: as a coach. He was a player that there's a
Speaker 1: difference there, but certainly understand the world of football, whether
Speaker 1: it's collegiate or pro. And that certainly understand the world
Speaker 1: of business because he was in credibly successful there as well.
Speaker 1: So he was a very very bright guy, as you
Speaker 1: would expect. So he was a wonderful resource for me,
Speaker 1: for me to be able to reach out to really
Speaker 1: really quite interesting. All right, So let's jump to our
Speaker 1: favorite questions that we ask all our guests, starting with um,
Speaker 1: given the fact that you're no longer coaching and have
Speaker 1: a little more free time these days, tell us what
Speaker 1: you're streaming? What are you what were you watching to
Speaker 1: keep yourself busy? Uh? During the pandemic and and the
Speaker 1: work from home year. Well, I think a lot of
Speaker 1: people think, just because a football coach, I'm a crazy
Speaker 1: football fan, but I'm not. And I look, you know,
Speaker 1: I used to look at thirty five hours of tape
Speaker 1: when I go home. I don't want to watch football.
Speaker 1: So I would enjoy I would enjoy a movie. I
Speaker 1: would enjoy some of the episodes that they had on Netflix.
Speaker 1: I mean, whether it's uh Billions, Ray Donovan, uh, House
Speaker 1: of Cards, uh, the uh Uh, they're a handful of
Speaker 1: those that I think they're really really, really well done
Speaker 1: that I enjoy because their episodes, you know, I'm not
Speaker 1: stuck to two and a half hours having to watch
Speaker 1: That's number one. The other thing that in terms of podcast,
Speaker 1: the one that actually I do really enjoy is Compound
Speaker 1: and that's the one you know with that Josh Brown runs,
Speaker 1: and I think I follow that. I think they've done
Speaker 1: a good job. And I think if I'm not if
Speaker 1: I'm not mistaken, they're going to add a Compound and
Speaker 1: friends things, which I don't think it's started yet, but
Speaker 1: I've gotten a lot of value out of enjoyment out
Speaker 1: of all those. So by the time this broadcast that
Speaker 1: will have started. And uh, if you'd like to be
Speaker 1: a guest on Compound and Friends, I would be happy
Speaker 1: to twist Josh's arm and have you show up on
Speaker 1: that podcast. I would enjoy that. Verry, I would enjoy that.
Speaker 1: I have a lot of respect for him as well.
Speaker 1: So now let's talk a little bit about some mentors.
Speaker 1: Who were the people who helped shape your career. You know,
Speaker 1: I think you could talk about you know, there are
Speaker 1: as a coach, for example, I read everything that was
Speaker 1: to read about Vince Lambardi and John Wooden because they
Speaker 1: were both very successful but both are very very opposite.
Speaker 1: In the business world, War and Buffy Got Lee, I Coco,
Speaker 1: You've got you. There are so many people there, but
Speaker 1: the people that really change shaped my career, uh, especially
Speaker 1: as a leader and as as a person, but in
Speaker 1: the in the in football and business. For my parents,
Speaker 1: and my dad was an Italian immigrant. He came here
Speaker 1: when he was eleven and never finished eighth grade. Uh
Speaker 1: So bananas and apples and the bronchs entire life. But
Speaker 1: dad that my mom he met my mom after World
Speaker 1: War Two. She kicked in Ireland, she came over here
Speaker 1: to marry it. Uh. She never finished tenth grade. I
Speaker 1: was the oldest of five. The seven of us grew
Speaker 1: up in At the time of that Instry section of
Speaker 1: New York City was very much a gang area. I
Speaker 1: was part of that and we lived seven of us
Speaker 1: lived in the two bedroom in broom department. And from
Speaker 1: my mom, she was had such an incredible attitude, always
Speaker 1: with a smile on her face, unconditionally loved us, you know,
Speaker 1: always had uh the glass was always half full, you know,
Speaker 1: enjoyed lasting but truly truly loved us. And I think
Speaker 1: very much I get my sense of humor and a
Speaker 1: lot of my personality think from my mom. On my
Speaker 1: dad's side, Dad was committed to make sure it's a
Speaker 1: care of his family, who were very hard in that
Speaker 1: food store with you know, was a verst to stays
Speaker 1: a week and I learned, I learned the how how
Speaker 1: important to real work ethic was. And again make sure
Speaker 1: you think terry family. The difference with leard of my
Speaker 1: dad and maybe three people working for him. And Dad
Speaker 1: never had a hobby and most time he's burnt out
Speaker 1: and later on in life he wanted to become an
Speaker 1: alcoholic and uh, but I could tell just the way
Speaker 1: he treated his guys and treated me. There was always
Speaker 1: I felt kind of a better way to do something
Speaker 1: like he was always in a bad mood. It was
Speaker 1: never his fault. The glasses always half empty and um,
Speaker 1: and I think he could have been a beat jobly
Speaker 1: delegate and have the other guys who work. And in
Speaker 1: terms of being a leader, and I mentioned before my
Speaker 1: ability to delegate and how I run things and how
Speaker 1: I lead, A lot of that that I learned was
Speaker 1: from my father in terms of what not to do.
Speaker 1: So I think the two greatest influencers on my life
Speaker 1: were literally my MoMA, my mama my dad. Huh really
Speaker 1: really quite interesting. Let's let's talk a little bit about books.
Speaker 1: What are some of your favorites and what are you
Speaker 1: reading currently? The the uh, probably my best most favorite
Speaker 1: book is The Gold Coast, uh, probably written about thirty
Speaker 1: years ago by Nelson the Mill, Uh about as the
Speaker 1: Gold Coast meaning Long Island, and it's about the guy
Speaker 1: I think he was, Stevie Bella Rosa, who was the
Speaker 1: mafia guy that I think came in and buy one
Speaker 1: of these estates on Long Island for making up the
Speaker 1: numbers of like sixteen billion dollars and he brings it
Speaker 1: back in cash to that and I thought it was
Speaker 1: a fun book exactly, and I actually read it twice
Speaker 1: because I enjoyed it that much. Then the other the
Speaker 1: book book that I just finished, and I just thought
Speaker 1: another one who was Walking with Ghosts by Gabriel Byrne,
Speaker 1: and it's his memoirs and he's really a very very
Speaker 1: very I've always respected him as an actor, but he's
Speaker 1: really a very very clever writer, and I've gotten a
Speaker 1: lot of joy out of that. And then when i'm
Speaker 1: reading right now is Brock, you know, the one by Obama.
Speaker 1: And this is a long one and I'm only about
Speaker 1: a hundred thirty pages into it, but some of it
Speaker 1: is really enjoyable. So I gets a little bit too
Speaker 1: much detail. I skipped over a little bit, but that's
Speaker 1: what I'm reading now, That's what I just finished. And
Speaker 1: the other one my favorite book. So well, there are
Speaker 1: a variety of different Barack Obama books. This is I'm
Speaker 1: assuming is whatever the most recent one is. You know,
Speaker 1: it's either Barack or it's Obama. It's just one word
Speaker 1: title and it's his name. So our final two questions,
Speaker 1: what sort of advice would you give to a recent
Speaker 1: college grad who was interested in a career in either
Speaker 1: college athletics or finance. Now, I think one of my
Speaker 1: principles of leadership is uh I call spiritual soundence. It
Speaker 1: doesn't have to be religious, but it can be. But
Speaker 1: it's I think most people don't really know who they are,
Speaker 1: and um, I think you become a compositive like who
Speaker 1: I am relative to my mother, my father, my girlfriend,
Speaker 1: my wife, my my job, what kind of executive am I?
Speaker 1: What kind of coach and my what kind of friend
Speaker 1: of my etcetera, etcetera. And if you sit down you
Speaker 1: write that down. I just keep writing, writing, writing about yourself,
Speaker 1: and you step away from and come back to it later.
Speaker 1: You're probably gonna change things things you wrote down. But
Speaker 1: the one guidelines you can never show it to anybody,
Speaker 1: because the second you show to somebody, you sub constantly
Speaker 1: actually looking at their approval. So in order to be happy,
Speaker 1: I think you need to know who you are because
Speaker 1: you're gonna have to make decisions under stress. And the
Speaker 1: better you know who you are, the great the probability
Speaker 1: you will make the right decisions. Now, one of those
Speaker 1: and the most one of the most important by far,
Speaker 1: is your career path. So, if you know who you are,
Speaker 1: what kind of skill sets do you really have? What
Speaker 1: are the skill sets required whether it's coaching or athletics
Speaker 1: or business or whatever the field might be, what the
Speaker 1: what the skill sets required for success in that field?
Speaker 1: Do you have those skill sets? If you don't, do
Speaker 1: not go down that path. If you do, you still
Speaker 1: have to ask yourself one other thing, and that is
Speaker 1: is this something you really love? The answers there is yes,
Speaker 1: and chances are you've done a good job of picking
Speaker 1: the right career path. So it's kind of irrelevant whether
Speaker 1: it's finance or trading or investing or football. It's kind
Speaker 1: of like what we're for you, not because this is
Speaker 1: something you thought about, not because this is what your
Speaker 1: dad did or somebody who admire does. Uh, it's kind
Speaker 1: of what really works for you. And I think we
Speaker 1: would have a happier society if more people spent more
Speaker 1: time taking that through. To say the very least, and
Speaker 1: our final question, what do you know about the world
Speaker 1: of investing and trading and football today? That you wish
Speaker 1: you knew years ago. I think I think thirty years ago.
Speaker 1: From a football perspective, I think it would have been
Speaker 1: great to have the scheme knowledge that exists today, the
Speaker 1: ability really kind of go after, spread out the field,
Speaker 1: take advantage not just the triple option that Oklahoma and
Speaker 1: Nebraski used to run, but true option, attack, run, passed,
Speaker 1: and do different things in effect. From an offensive perspective,
Speaker 1: I think that would have been great. I think for
Speaker 1: me to have back then and from from with regard
Speaker 1: with regard to the business world, I think I think,
Speaker 1: really the principles that I build on today, what are
Speaker 1: your core competencies. You gotta make sure you take care
Speaker 1: of your people. Uh, what really matters your clients, you shareholders,
Speaker 1: and your associates. Because it's your employees. They give value
Speaker 1: each of those constituents, you know. The For me, while
Speaker 1: the world's changed, I just growing with the world. I've
Speaker 1: just adapted. I do a good job of adapting, adjusting
Speaker 1: and adapted just with the world. But the principles I
Speaker 1: believe in so much today that I'm really good at
Speaker 1: because of the experience that I've been able to late
Speaker 1: That's kind of how I started out, and they were
Speaker 1: the saying principles I believed in. You know, thirty years ago,
Speaker 1: I wish I were more experienced, because with that experience
Speaker 1: comes knowledge, and with that knowledge comes wisdom, so you
Speaker 1: can make better decisions for yourself and for your people,
Speaker 1: for your family. So UH be the same, so that
Speaker 1: that would be what I wish I had thirty years ago.
Speaker 1: Really quite quite fascinating. Joe, Thank you for being so
Speaker 1: generous with your time. We have been speaking with Joe Mowglia,
Speaker 1: who is not only formally a head coach at several
Speaker 1: esteemed college football teams, but is also the former chairman
Speaker 1: and CEO at trading giant T Dumeritrade. If you enjoy
Speaker 1: this conversation, well check out any of the other nearly
Speaker 1: four hundred such interviews we've had on Masters in Business.
Speaker 1: You can find that at all the usual places, iTunes, Spotify,
Speaker 1: wherever you get your podcasts. We love your comments, feedback
Speaker 1: in suggestions right to us at m IB podcast at
Speaker 1: Bloomberg dot net. Sign up for my daily reads at
Speaker 1: rid Haltz dot com. Check out my weekly column on
Speaker 1: Bloomberg at Bloomberg dot com. Slash Opinion follow me on
Speaker 1: Twitter at rit Halts. I would be remiss if I
Speaker 1: did not thank the crack staff that helps put these
Speaker 1: conversations together each week. Tim Harrow is my audio engineer,
Speaker 1: Michael Batnick is my head of research. Atika val Brunn
Speaker 1: is our project manager, and my producers are Michael Boyle
Speaker 1: and Parris Wald. I'm Barrier Halts. You've been listening to
Speaker 1: Matthew's In Business on Bloomberg Radio