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| Joe Moglia took the lessons of 16 years on the sidelines as an assistant football coach and applied them on Wall Street. He’s now the CEO of Ameritrade and has written a new book to help investors coach themselves. |
Before he entered the financial arena, Joe Moglia spent 16 years on high school and college football fields as an assistant coach. In 1984, at age 34, he entered a sales training class at Merrill Lynch and quickly rose through the executive management ranks to senior vice president, overseeing all investment products as well as the firm’s insurance and 401(k) businesses. Moglia joined online stock trader Ameritrade as CEO in 2001, and he has seen the company more than double its revenue and raise net income by 1,000 percent. In April, he published “Coach Yourself to Success: Winning the Investment Game” (John Wiley & Sons).
Moglia spoke recently with SportsBusiness Journal New York bureau chief Jerry Kavanagh.
Education: Bachelor of arts, economics, Fordham University; master of arts, education, University of Delaware
Teams you root for: New York Yankees, New York Giants and Nebraska Cornhuskers
Favorite vacation spot: Nevis
Last book read: “The Carolina Way” by Dean Smith
Favorite music: “Chicago”
Favorite actor and actress: Harrison Ford and Julia Roberts
Favorite movie: “Gone With the Wind”
Basic business philosophy: Your business exists for the benefits of your clients. If you don’t get that, you’re going to go out of business. If you’re a publicly traded company, then you’ve got to be able to balance the experience you give to the clients with the return you’re going to provide for yourselves.
Favorite quote: John Wooden: “Live as if you’re going to die tomorrow and learn as if you’re going to live forever.”
You were an assistant football coach for 16 years prior to becoming CEO of Ameritrade. That’s not the traditional CEO career path.
Moglia: Not exactly. What happened was, I did coach for 16 years — ’83 was my last season in football — and I loved it, but I also had an interest in Wall Street. In 1984, I took a job at Merrill Lynch, where they put me in the institutional MBA training program. There were 26 of us — 25 MBAs and one football coach.
In your book, “Coach Yourself to Success,” you write, “The world of investing is a lot like sports.” In what ways are they alike?
Moglia: In both cases I think it’s important for you to be able to take responsibility for yourself. One of the things that a coach will talk about to his players is, you know, “No pain, no gain.” That deals with taking responsibility for yourself so you can, in effect, make sure that you can achieve your ultimate financial goals at some point down the road. There are a lot of very sad stories of professional athletes who make a lot of money while they’re playing, and several years after they retire they really don’t have anything left. So the real key here is to be able to take responsibility for yourself and learn and understand what the basics are, and then understand what you need to be able to do in order to put together your own portfolio. The book tries to point that out in an easy, simplified manner.
You also write, “Any degree of success that I’ve achieved has been because of understanding what leadership is all about.” How do you define leadership?
Moglia: It’s somebody who is willing to stand up and accept responsibility. It’s somebody who can bring a team together for a common goal, and somebody who can make that team great through the principles of spiritual soundness, dedication, courage and love.
What is spiritual soundness?
Moglia: It’s basically understanding yourself: knowing your strengths and weaknesses, being able to examine your own conscience, knowing what you’re good at and what you’re not good at, and knowing what you really want to do with yourself. Basically, it’s the acquisition of peace of mind.
Are there any leaders in sports business today who epitomize that?
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| Coach Vince Lombardi was the epitome of sports leadership, Moglia says. |
Moglia: I think the Kraft family has done a fantastic job with developing the franchise they have in New England. I think the Mara family and the Rooney family have become traditions and icons as part of the entire NFL franchise all the time. But I think the epitome of who has done this the best all the time would be [Vince] Lombardi.
You told USA Today that as a football coach you try to create a competitive advantage. How do you do that in business?
Moglia: I think you’ve got to understand what your core competencies are, and then you lever those into competitive advantages. For example, at Ameritrade, we think our strengths are our brand and our technology. So, then, the next question is, How do you lever both our brand and our technology into competitive advantages where you can compete in those market niches and be a market leader? We’ve done that. We have about 25 percent of the active trader market in the United States.
Speaking of the Ameritrade brand, since you became CEO in 2001, the company has seen a dramatic rise in fortune. What’s the secret to the success?
Moglia: It’s twofold. One, internally it’s a realization for why the firm exists. We exist for the benefit of our clients and our shareholders. So, for all those leaders within Ameritrade that have resources at their disposal, all those resources need to be used to enhance the client experience. If that’s not the case, then those resources are expected to be redeployed or they’re eliminated. That gets a tremendous focus internally.
The second thing that we’ve done is, because of this idea of growing core competencies into competitive advantages, we have been able to aggressively grow the company through mergers and acquisitions.
In 1999 and 2000, Ameritrade had a sizable advertising presence in sports: $87 million, part of which was a deal with NBC that included the Olympics. How much advertising in sports has Ameritrade done since then? Any plans to get more involved?
Moglia: We don’t do it as much as we did back then, but we still do it. We find that when we deal with the networks it’s not necessarily an efficient use of our advertising dollars. But we do advertise aggressively through cable. … When there are sports shows on cable, we very often tend to be a sponsor of those. For example, we are on ESPN pretty regularly.
You emphasize in your book that there is no one template for personal investors, that it all depends on the individual’s profile and goals. Are there any hard and fast rules that an investor in sports should adhere to?
Moglia: You really, truly need to be a sophisticated investor. You need to have tremendous due diligence and resources to understand the numbers behind the plan. And then recognize that if you get involved with sports, hopefully it’s because you believe it’s a good investment, not because of the sensationalism of just being associated with professional franchises.
For those who know what they’re doing, is investing in sports smart business?
Moglia: It can be for some. I still think it’s secondary to having a balanced, diversified portfolio. If you have [that] and you’ve got your retirement goals that are set and incremental money that you can afford to lose, looking at sports franchises, or other types of investments, is probably a worthwhile thing. But for the typical person, the investment in sports is very much out of their reach. Even for the more sophisticated or wealthy investor, having a balanced portfolio is more important.
What’s the best investment in sports today? Game Plan LLC’s Randy Vataha said that he thinks it is a big-market franchise that, for whatever reason, can be bought for the same price as a middle-market team.
Moglia: I agree with Randy. If you look at, let’s say, what’s going on [with the 49ers] in San Francisco, that would certainly be a wonderful opportunity. They haven’t been doing well of late and they are certainly one of the premier brands in the league.
What in sports today has the most value? Is it owning a franchise?
Moglia: I think owning a franchise certainly does have value, where you can apply good, solid business fundamentals and financial accounting principles to running the business. And you recognize that it’s always entertainment. But entertainment can still lose money. You’ve got to be able to run it like a business to be effective.
What’s the best thing that could happen to improve the economy?
Moglia: More simplification of our tax structure. Make it as easy as possible. One other thing I would add: You’d like to see the price of oil come down.
