You win some, you lose some. But if you turn those wins and losses into something bigger, something inspirational… well then you might just make the world smarter, happier, and richer. As an NFL quarterback and head coach, Frank Reich has won and lost under the brightest of lights, but his story rises well beyond the game of football. In fact, in this episode of Rule Breaker Investing, you might be surprised to hear just how much of a Fool he really is!
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This video was recorded on July 13, 2021.
David Gardner: I told the story of my transitioning for my stock-picking responsibilities at The Fool in a May podcast. A couple of months ago, it was A Road Less Traveled In 10-and-half Chapters. Well, Chapter 3 of that podcast was entitled to Fools. Ultimately, the two Fools I’m talking about are well, you, you’re one, and me on the other. Here we are together every week, two Fools. That was the reason for the chapter in the chapter’s title, but I also told the story in that podcast of how much I’ve enjoyed the first time meeting an NFL head coach. Not just somebody so accomplished in the game of NFL American football, but also, yeah, a Fool with a capital F. Somebody who just like you and me, makes his own investing decisions, uses the Motley Fool services and side note has done wonderfully because you had such a great mindset as you’ll see. But no, the main note is that he made a key move in his life to take over his finances to quarterback his financial destiny and is so eloquent talking about it. While I withheld the name of the coach from that podcast and respective anonymity, I’m very happy to tell you that he is Frank Reich, the Head Football Coach of the Indianapolis Colts. Frank is not only fine with sharing that, he is on this week to share, to tell his story. What a remarkable story it is? Frank Reich to Fools only on this week’s Rule Breaker Investing.
Welcome back to this week’s Rule Breaker Investing. Earlier this year, we started a new series Telling Their Stories, volumes 1, 2, and 3. You get to meet people like Matt Argersinger, Jason Moser, Aaron Bush, Emily Flippen, and many others. In fact, the third one was just a month ago today, Telling Their Stories, and I realized that the framework we’ve been using for that series would be awfully fun to use outside of me just interviewing Motley Fool analysts, which has been so much fun to do, and we will keep doing that. But I thought about telling the story of your life, let’s say 10 sentences or less, talking through the stock graph of your life, and what are the three key moments that have made you the investor that you are today? I could use that for other people, people external to our company, maybe even people very well-known like this week’s podcast guest. Thus was born well, this week’s podcast two Fools and joined as I mentioned at the top, by NFL Head Coach Frank Reich of the Indianapolis Colts. We’re going to be talking through Frank’s life and his investing life and I’m so delighted to share this conversation with you because, Frank, while some of you will know him and you know what a remarkable life story he has thus far.
But for many of you who may not know that much about Frank or American football, I can tell you that you’re going to hear stories that are very inspirational. Somebody who’s been at the highest highs, some of the lowest lows, at least professionally, and yet somebody who has done such a fine job, not just with his professional life, but with his life. That’s what we’re really going to learn today and his investing life as well. Thus was born this week’s podcast, and I’m excited to share this interview with you. I will mention upfront just before we start with Frank, that next week’s Rule Breaker Investing podcasts, we’re going to be talking about venture capital investing. Something I haven’t touched on that often in the past. Although, if you talk about the most Rule Breaker-y ways to approach the markets, venture capital is right up there. I’m going to be joined by one of my favorite people on planet Earth. That’s right. Ollen Douglass, the long time Chief Financial Officer of The Motley Fool, but for the last few years, the Head of Motley Fool Ventures. Ollen and I will be answering some of your questions which will solicit over Twitter in advance. Just tweet us out @RBIPodcast. Any questions you have about venture capital investing, we look forward to. It will be a bit of a primer for many, but also the wisdom and yes, Fight the conventional wisdom, Foolishness of Ollen Douglass and his take to help us all think smarter, happier, and richer about venture capital investing, that’s next week. That’s next week, we’re living in this week. Let me now welcome my new best friend, Frank Reich, Head Football Coach of the Indianapolis Colts. Frank, a delight to have you join me, two Fools.
Frank Reich: No doubt, two Fools. I appreciate the opportunity to join you David, thanks for having me on.
Gardner: I know it’s been a really busy month. It’s about to get a lot busier for you as the season is oncoming. But this is a time to just relax, step back, and reflect a little bit. We need those times in our lives, and I love doing that with this podcast and I love having well-known people who have lived amazing lives to share. That makes me smarter, happier, and richer, and that’s what you’re going to help us do in the arrowhead, Frank. Thank you so much again, and you already know the format. The very first of our three pieces is the story of your life in 10 sentences or less. Now Frank, I think this is modesty that becomes you. This is the humility that typifies Frank Reich, I think, but you only are bringing eight sentences. Let’s get started. Without further ado, Frank Reich, tell us your story.
Reich: It’s a simple story, David. Raised in Lebanon, Pennsylvania, home of Lebanon Baloney, that’s right, Lebanon Baloney, son of school teachers and coaches, tremendous parents who taught me both by word and by example in parenting the powerful combination of unconditional love as a parent, but yet the responsibility of hard work. That was just invaluable. Then I moved on to college life where I went to the University of Maryland. The University of Maryland introduced me to the big city, to big time football, and to big business. I went there as a finance major, I am a real numbers guy. I always had the dream to play football, but if that didn’t work out, I would’ve been a banker or stockbroker, along those lines. But my college football experience included being on a team that had the largest comeback in college football history at that time, a great stage of my journey. Then in 1986, I married the most amazing person I know, my best friend Linda, a hometown girl, but not my high school sweetheart, just a very close friend in high school. We’ve been married for 35 years and with three daughters who are all incredibly strong women and are on the right path, all married and two grandchildren today.
Then as I moved into my professional life, that began in 1985 when I was drafted by the Buffalo Bills. During those years, I became part of a team that was the only team in NFL history to play in four consecutive Super Bowls, an incredible experience with some incredible teammates. This span with the Buffalo Bills also brought me the experience of playing on a team that had the greatest comeback in NFL history against the Houston Oilers January 3rd, 1993, a tremendous experience. But the most significant day of my life, I have to step back a second, go to when I was a senior in college when I made a commitment, just personally going through some hard times and as sometimes college students do, really recommitted my life at that point spiritually and said that I really needed to put that at the center of my life. Since that decision in college, really as a professional and my marriage as a parent, everything flows from who I am as a Christian and that’s a real big deal to me, and I would hope that anybody that knows my story knows how important that is. There’s been two quotes that have been on my desk since 1985. These are life quotes to me. I have tried to embody these, I aspire to these.
The first one says, “No man becomes suddenly different from his habits and shares his thoughts.” Then the second one says, “The sweat of discipline and the hard work of repetition always proceeds the thrill of spontaneity in any pursuit of life.” Those two quotes stood the test of time for me and I think long before me and I think those stand the test long after me. When I think back, just beginning to summarize the biggest lessons that I have learned in life is this, is that it’s really about the people and it’s about the process. Surrender the results. Don’t focus so much on the results, rather than focus on the people. Surround yourself with great people. Be willing to learn. Be willing to grow. Do the hard work.
Yes, we’re always striving for the best results. But by actually doing it counter-intuitively and focusing on the people, bringing out the best in others, bringing out the best in yourself, and then working hard day in and day out, doing that will bring the best possible results that we want. I have certainly experienced that. Then lastly, I would just say any summary of my story would be it’s an ongoing story, so there is a continued vision for my life. I’d like that to center around two words. I’m at this stage in life of 59 and joined a great organization surrounded by great people, and two words that I’ve talked to get people in our organization are about our magnanimity and humility. A brief word about those two words. Magnanimity is the habit of striving for great things, while humility is the habit of serving others. Magnanimity is thirst to lead a full and intense life, while humility is thirst to love and sacrifice for others. Lastly, magnanimity affirms our own personal dignity and greatness, while of course, humility affirms the dignity and greatness of others.
Gardner: Wonderful. Thank you, Frank. You put a lot out there and I want us to just start right in. We’re going to move to the stock graph of your life in just a little bit, but I have some inevitable follow-ups on the eight senses you just shared with us. The first question I have for you is your parents, obviously, our parents, if they’re doing a good job, mean so much to us. Not just as kids but as adults looking back. Clearly, yours did a wonderful job for you, Frank. Was there a catchphrase from your dad or your mom that really typifies them that has emblazoned itself on your memory?
Reich: No doubt. My dad before I would walk out the door to almost anything: sporting contests, school, going out on a Friday night with friends. It was simply this. Hey Frank, keep the pressure on and what that was shorthand for, David, was don’t let your guard down. Always be pushing yourself. Always be on guard. Always be alert. If it’s a football game and you’re riding the high of three great victories or you are happening to play good football then keep the pressure on, don’t let it down. If you’re coming off of a couple of tough losses, keep the pressure on, don’t give up. If it’s out in a setting somewhere where you need, you can apply that just about anywhere. That was a saying that just still rings in my ear to this day.
Gardner: He was somebody I assume who was embodying that himself. I know that he was an NFL player. Am I right about that?
Reich: That is right. Well, he was drafted. That was in 1955, ’56 he was the captain at Penn State at the time Lenny Moore, Rosey Grier, or some of the names that he played with.
Gardner: I remember this.
Reich: He was drafted by the Philadelphia Eagles and rather than go there and play for a contract of $3,500 a year, he chose to go be a school teacher and raise a family. I think his salary at that time I remember him telling me was $1,700 a year or $1,800 a year. He just wanted to settle down. He married my mom and they just wanted to settle down and have children, in obviously a different era back then.
Gardner: Let’s move forward to young adulthood. You met Linda, you mentioned she was not your high school sweetheart. Did you have a high school sweetheart and what did Linda think of her?
Reich: Well, great question. Linda and I were in the same parade. When I say best of friends, I mean like we were like brother and sister. For sure we both dated, we all just all hung out together. Then it really was after high school and we were both in college and we were between dating people and we were just getting together like we will get together because we were such good friends and one night we just looked at each other and I was like, are you feeling what I’m feeling? Should we actually go out on a date? I mean, I think we like each other pretty much. Maybe we should try this out and so we did, we started dating and we dated for really the rest of my years at college and then got married after my rookie season in the NFL.
Gardner: No man becomes suddenly different than his habits and cherished thoughts. Could you give me an example from your life, either your own life or observing others that really brings that quote home for us?
Reich: First of all, the quote that no man becomes suddenly different from his habits and cherished thoughts, that’s a quote from Joshua Chamberlain, civil war general. His men were getting ready to go into battle. This is of course a very famous story, but he’s getting ready to go into battle. He’s basically telling his man, hey, we can determine the manner of man we will be whenever and wherever the hour strikes that calls men to noble action. Then he completes that quote by saying, no man will suddenly become that. For me, this quote typifies so many things. It can be everything from as little as when you were in school and studying, preparing for tests. But certainly, for me, I mostly think of my football career. Those are the battles that I have found myself and as far as professionally. Hey, we want to know the team we’re going to be or the player I’m going to be. I want to know how I’m going to respond to adversity or how I’m going to respond when things are going well. I know that. All you have to do is look at what I’ve done and what I am building on. I just think it’s a very important quote that we can’t hide who we are. It goes back to the lesson that I said the emphasis on the process. I’m never the person that I want to be, but I’m always striving to become the person I want to be. That’s just the summation of my values or my habits. Try to build those habits in a way that will reflect and have me ready when they are called upon. Whenever and wherever they are called to come out. I’ve just found that I’ve leaned on that all the time. As a coach, I talk about that all the time to the players that I coach. I talk about that to our children constantly. Those are things that are easy to spell out and easy to see.
Gardner: Well said, Frank. The second quote, sweat of discipline and the hard work of repetition always proceeds the thrill of spontaneity in any pursuit of life. I love that. All I want to say and then we we’ll keep moving about that is that you’ve shown that in the preparation that you brought for this podcast because I shared with you the elements we’d be going through and you did a lot of work on them and you’ve submitted them all ahead of time to me and I can see basically how hard you would be to compete against if I or another NFL head coach. Because you are a hard-working guy and you are prepared and you probably never get out prepared by the opponent. You might lose for other reasons, but I doubt it’s because somebody prepared more than you did.
Reich: Yes. When you think about the sweat of discipline and the hard work of repetition, it’s about not getting bored with the mundane, with the tedious things. Going back to the fundamentals and the basics all the time. A lot of times in professional sports, we see our favorite athlete do something phenomenal. It just makes our jaws drop to the floor. How did he do that or how did she do that? That looks like the most spontaneous play, and I just say to myself none of it’s very little spontaneous. It’s all been rehearsed. We know when we were kids and whether it was you were into sports or if you were playing an instrument we all I think envisioned ourselves making that last second shot or throwing that touchdown pass or playing in front of a big crowd, the piano or the violin or something. There are times where there’s the thrill of spontaneity, the thrill of those moments that they’re just not going to come any other way unless you’ve paid your dues. I really believe that you’ve got to pay your dues. That quote just always reminds me of that.
Gardner: Awesome. Well, Frank, let’s move on now to the stock graph of your life. I talked you through it a little bit just by email. All of us, whether we’re 59, 55 or 15, usually we start in the lower left with our graph because we’re born. I hope it goes up from there for most of us. I hope most of these graphs are for our fellow human beings as we try to help as many humans thrive worldwide, which is a big part of my vision and my hope for our future. We hope that you go lower left to upper right with your graph, which is what every consultant is always going to show you. They’re going to show you graphs. Starting lower left go to the upper right. Every stock market graph of any meaningful duration is going to go lower left to upper right and yet there are some highs and some lows. That’s fun to talk about too. I’ve always said to each of my guests share whatever you want to. We don’t put any pressure on you to share all the best times, not the worst times or vice versa. It’s whatever you’d like to share. Frank, let’s start. Talk me through, a little bit, the stock graph of your life. Where do you want to start?
Reich: Well, this was a fun exercise. When you sent it in the email that, hey, I really encourage you to actually don’t just think about it but to draw it out. When I was doing it I was doing it on my phone because I was at a spot where I didn’t have the writing utensil, so I just used my phone on a note thing. It wasn’t as precise as I wanted it to be but that was probably a good thing. [laughs] On this stock graph of my life it goes gradually up and there are some ups and downs in there but they’re smaller, where it’s pretty normal upbringing. But then I get to college and there’s a big dip in college. There’s a big drop. That was, of course, because when I got to Maryland I ended up being Boomer Esiason’s backup who was a very accomplished college quarterback and then a very accomplished NFL quarterback. Boomer was a year older than me. He graduates and he’s playing in the NFL. Now it’s my senior year and long story short four games into my senior year I had an injury that looked like it could end my season, it could end my career, and just thought it was all going to come tumbling down. That’s what that first big dip is. The low point there was I was able to recover four weeks later and I walked into my coaches office and told him, “Hey, I’m fit. I’m ready to play and he told me that sorry, Frank. The guy who stepped in for you is playing pretty well right now and I don’t want to make another change at quarterback. That was a huge low point. But then, of course, that next week now we see the graph has a sharp uptake. Thank you [laughs] for that sharp uptake because what that little line when I was drawing it with my finger I could actually feel the joy of that movement right there when we went down to play the University of Miami, the defending national champions. Bernie Kosar was their quarterback at the time. Our team wasn’t starting as I just told you but our team played pretty poorly in the first half. It was 31 to nothing. We were losing and so the coach put me in the second half and our team came back and we won 42-40. That was a V-shape recovery right there. Then I had a few games after that, that continued to make my stock rise, if you will, in the NFL.
Gardner: Frank, that was Stan Galba I think was the guy who’d stepped in after your injury. Stan had a professional career himself. In fact, I think you shared a team or two maybe with him and he played for the Bills at one time anyway.
Reich: That’s right. That’s why I could argue with the coach because he had told me that it was team policy that a starter never loses his job because of injury. But because of the nature of the quarterback position, he didn’t want to make the change. To your point, David, Stan was playing well and he did continue to play well and go on and have an NFL career, but that’s part of the graph.
Gardner: It reminds us how much in a sense we’re all sometimes victims or sometimes beneficiaries of circumstance. There was really by any right he would completely earn the right to play starting quarterback, at least your senior, probably years before that but Boomer Esiason being as great as he was and you being just one year younger you didn’t have that opportunity. That feels so unfair that that happened to you. I know you mentioned earlier during your eight sentences that this was a time in your life where you decided to make a spiritual commitment. Was it triggered by this moment, by this event? Frank and was that part of your zag up?
Reich: There is no doubt it was David. As you would anticipate. It’s all connected to life and I believe in it. I probably was at a point in my life where I’d put all my eggs in the basket of the NFL. This was my life. I had an obsession with football and with my dream to play in the NFL. It really had me with my priorities out of order. I think this difficult time, this trial that I went through personally helped me reprioritize what was most important in my life and what it would mean for that to truly be at the center of that. This was important to me and how that would not only just give me a piece to get through that, but it would give me a piece and the strength that would still allow me my best years ahead.
Gardner: Was there a moment where the heavens opened, Frank? Do you remember a single moment where you decided? Maybe it was a low moment or maybe you were already on the way back or was it more of a gradual transition from something?
Reich: No, it’s a great question. Everybody has a different story but for me there was a moment and searching for answers. I had a friend at college who had been trying to discipline me, trying to coach me spiritually. I was listening to him, but maybe not as much as I should have. Then in an effort looking for that piece I went to church one Sunday and I ended up leaving and going back to my dorm room and that’s where I just really fell down on my knees and just prayed to God to forgive me that I have messed everything up. Now, I’m a 21 year old man. What that meant was different than messing something else up, but it was important and it was meaningful. There was a sense where I felt like I needed to surrender my life and confess that to God. That was a very significant time.
Gardner: Thank you for sharing that. I’m sure we’ll touch base on that a little later in the stock graph because you had a transition after football before returning to football that I’m sure we’ll touch on. But before we proceed forward to the stock graph, I do want to just double underline the date was November 10th, 1984. Frank came in for the second half. The score was 31, nothing and remarkably 42-40. The final at that time was the greatest comeback in NCAA Football history since we say at the time. I guess that has since been surmounted. Somebody came back from more than 31 down in the second half. But I do want to make sure I flag that because Frank you had another similar moment as a professional that I’m sure we’ll talk about shortly. About a quarter of our audience are international. They may not even know the rules or care about American football. A lot of people care about the other football, which is I guess the most popular sport in the world even though they still decide games really consequential ones by PKs, which is a crime. But anyway, Frank, I do want to make sure that a lot of people who don’t know much about football recognize how remarkable that college moment was to be down 31, nothing in the second half coming off the bench and doing what you did. We’re going to hear a little bit more, something like that in a bit. But let me pass the ball back to you, Frank. Where are you going to take us next year on the stock graph of your life?
Reich: After that college experience we went on to finish that year. It’s a good year. We finished the year out strong. Drafted to the NFL1985 draft, third round Buffalo Bills. Shortly after that actually the next year Jim Kelly came there from the USFL. Jim, of course, a star quarterback, hall of fame. Now I ended up being Jim’s backup. On this graph we’ve got a couple of years. The line’s pretty flat, David. It’s pretty flat. There was nothing special going on as far as me personally. As far as football, my career goes, but nothing terrible either. I was sitting on the bench, I wasn’t playing.
Gardner: Frank, if you’re willing to share, did you get a signing bonus for being drafted in the third round in 1985 in the NFL? What is your salary if you’re willing to divulge these numbers to us?
Reich: Absolutely, yeah. In 1985, I was the 57th player taken because there were only 28 teams back then. That would be the second round today, but nonetheless. I was the second quarterback taken. Randall Cunningham being the first quarterback taken. For my signing bonus, I got a $200,000 signing bonus on a five-year contract so it was essentially $40,000 a year. Then my first salary as a rookie in the NFL was $125,000. Things have changed slightly.
Gardner: No doubt about it. I feel like any era of athlete always feels like people got paid more after they did [laughs] because they did in fact. The popularity of sports worldwide, talk about stock graphs just seems to keep going up. Also there is some inflation adjustment there, 1985 numbers $200,000. That’s nothing to sneeze at. You must have been pretty happy. Was that a life changer for you financially?
Reich: Yeah, it was a life changer and it was a big time life changer. I came from a very modest family upbringing. I told you school teachers. But growing up we were part of a pretty catastrophic flood that we lost everything. We lived our lives growing up, always in catch-up mode, always financially. We have lived paycheck to paycheck my whole life and I could tell you a lot of stories about how my dad, we had to heat the whole house with firewood. He would take the fans from air hockey. He’d find old air hockey games, nail them to the roof, the ceiling, and turn them on so that the wood from the fireplace would heat the whole house just to try to save a few dollars to make ends meet. We were driving a Chrysler Plymouth Fury 3 that got 12 miles to the gallon and it was an older car. But somehow he did the math that he could buy a new Ford Escort that got 30 miles to the gallon. We were going to save $50 a month. We still make the car payment but then still save another $50 in gas to be able to help make ends meet. We really grew up where we had to learn how to do those kinds of things. I never felt like we wanted or needed anything. There was always good food on the table and so on, so forth. But when I made it to the NFL and got a $200,000 signing bonus, that was life-changing for sure.
Gardner: Did you squirrel that money away? Were you married at the time? Was Linda taking over as bookkeeper? What did you do with that?
Reich: We were engaged. I bought a car, I bought a 1985 Subaru. I can’t remember which kind it was and then [laughs] we bought a condo. I still remember this, we paid $56,000 in Buffalo, New York where I was drafted. We paid $56,000 for an 1,800 square foot three bedroom condo and then sold it two years later for 70,000. That was my first go at ever making money on an investment. Although we were paying ridiculous interest rates, I was so naive. I think interest rates were 13% at the time. I think I remember what we were paying on our mortgage or something like that. But yeah, I had no clue what I was doing financially early on because not having money growing up, I don’t know, I just felt like it took me a little bit to learn that.
Reich: I think what I learned about money growing up was how to be frugal. I don’t remember my parents ever talking to me about investing or that kind of thing. I didn’t know how to budget. We didn’t learn how to budget, but we never really talked much about making money and how to compound interest or those kinds of things. There was always this having enough to get by.
Gardner: Wonderful. We’re definitely going to pick up on some financial aspects later, especially the three key moments making you the investor you are today, Frank, but will park that. We’ll return to your graph where it’s going sideways because you’re a backup quarterback in the NFL. The bad news for you at this time, I guess, is that the person ahead of you was a star with longevity. If you’re hoping to get the ball yourself, it’s tough when Jim Kelly is starting.
Reich: Yes. Then there’s a dip there on that graph and you’re right, David. That is where it is flat there and then that dip is, I played in preseason, but preseason games without going into it too much, it’s not always a great reflection. There’s a lot of unique dynamics.
Gardner: [laughs] Agreed.
Reich: I was going to get cut from the team and so the General Manager called me in, and it’s a really long story, but I’ll just cut to the chase and say that he redid my contract and I ended up taking a salary cut to be paid lower just to stay with the team. But that turned out to be the best decision I’ve ever made in my life. It was a really good point where I could have allowed them to cut me and maybe another team had picked me up at a higher rate. I could’ve gone somewhere else, get out from under the shadows of Jim Kelly and go somewhere else. But I can’t explain at the time, my wife Linda and I went back, we talked about it, we prayed about it. For some reason we felt compelled to take his offer, to take a pay cut. It was, “Hey, I’ll cut you and you can take your chances out there in the NFL world or take the pay cut and stay here with us.” We took the pay cut and that was the best decision we ever made.
Gardner: That’s a remarkable thing to say. This is the General Manager of the team that you’re talking with?
Reich: Yeah. Bill Polian who is like a football father to me. There’s nowhere where I’ve been in my career as a player or coach that he hasn’t been at the center of it. In this particular instance, this one detail I’ll share. He was going to […] for me where the owner had grown an affinity for one of the other quarterbacks. Almost like the college situation where the owner had an affinity for one of the other guys who looked good in preseason games and where Bill Polian believed in me. The only way for him to keep me on the team was for me to take a pay cut. All the owners like when you’re willing to take a pay cut.
Gardner: Well, Frank, the good news is because now this is an audio medium, this is a podcast, and no one else can see what you and I are seeing. We’re doing our best to illustrate it with our words, but I’m happy to say that the graph starts to go up from there.
Reich: Yeah. That year was the first year Jim Kelly got hurt, and I had a chance to come in and play some significant time. I played good football, our team was successful, that way our graph goes up, that’s during those four Super Bowls in a row. But then you see David where that real big spike is that next spike which I know our listeners can’t see, but you’ve got this gradual uptick and then you see a pretty significant surge up. That was in year three of that four year run, that represented what you were alluding to earlier. We’re in a playoff game, we’re playing the Houston Oilers and Jim Kelly, our star quarterback, had been hurt in that game, and so I had to start the game. Unlike the college game, where we came back and won, I came off the bench in the second half, this game I started and we were losing 35 to 3 early in the second half or early in the third quarter. Then somehow turned it around and we’re able to come back and win 41 to 38, and that still does stand as the greatest comeback in NFL history.
Gardner: It is a remarkable story. I’m pretty sure I was watching it back then, I was 27 and I’ve watched the NFL playoffs every year pretty much. Just to get back there once again Frank, in the final NFL game of the 1992 regular season, your team, the Buffalo Bills, took on the Houston Oilers. I believe the final score is 27-3, I think Jim Kelly may have gotten hurt there, and so you’ve just lost 27-3, but you’ve made the playoffs, good news. The very next game, you’re going to be playing, the exact team that just beat you 27-3 the week before. That foe was the Houston Oilers, and they were up 35-3 early in the third quarter. It gives me goosebumps a little bit to think about anybody who is an NFL fan. Sure John Facenda, NFL Films can tell you the story once again. This is one of those stories that should be lionized because especially in America who doesn’t love a great comeback. Frank, here you are, do you remember any moments for that game you want to share?
Reich: So many moments, David. Like you said, because we played them the week before and lost 27-3, and now we’re losing 35-3, so we can pretty quickly do the math, and say that in the span of four consecutive quarters, they were beating us 62-6. Maybe you can appreciate that they let their guards down like they thought they had this one wrapped up, they had our number. There’s two huge life lessons here for me, or three. First of all, keep the pressure on. No. 2 is every play matters, it was 35-3, who ever would have thought those three points that we scored in the first half, whatever, have any significance?
Gardner: Good point.
Reich: Without that one little thing in the first half, that one little bit of success, then our efforts at the end are just going to fall a little bit short. It just reminds me that every play is important, every day, even in my life when it’s not football, if it’s something else, and it seems it’s insurmountable and it seems it doesn’t mean much, just keep plugging away. You don’t know when that’s going to come back to help you down the road, so very significant. Then secondly, it wasn’t what everybody said, they probably did let up a little bit, but we just played one play at a time. You can’t make up 32 points in one series. [laughs] You have to stay patient and let the big plays come just execute the little things, and then when they make their mistakes. I remember one last thing I’ll say about it. It’s 35-3, we go down and score and now it’s 35-10. Then we have a surprise onside kick, so we get the ball back three place later we score again, now it’s 35-17. Then we intercept and now we’re going back down to score again and so it’s a fourth and five on about the 20-yard line or so. You could make an argument to kick a field goal. We call the timeout, go over the sideline, […] and we talk it through and we say we’re going forward. If we’re going to come back and win this game, we’re going to need these points. We went forward and through a touchdown pass on fourth and five from the 20, that was a huge deal in that game, that fourth down conversion. So many good memories.
Then the one other noteworthy point I like to say is, as the quarterback at that team, a lot of people have pointed toward the efforts and how I played, but when you are down by that much, the defense had to play great, the special teams had to play great, the coach has had to be on it.
Gardner: So true.
Reich: I mean, it’s not a one man show, it’s a team effort. Man I look back on all those lessons, all the time. I mean all the time. That was in 1993, and when I think about how many times I had the opportunity to share that with a group, any kind of a group. Young kids at a sports camp, at a church camp, at a business seminar. David, I’ve shared a story about those lives, and there’s so many more that go with it but, that’s real life. I think that’s one of the reasons why sports are so popular, because it’s just competition and it brings out these emotional highs and lows. You get to see the importance of executing the little details right, and then you get to see the big plays, and it all orchestrates together. I think that’s why there’s such an affinity for sports in general.
Gardner: That’s really well put. I think it’s just so remarkable that a man who as an athlete, is perhaps best known for being a backup for long periods of time, which he never wanted to be, who doesn’t want to start, and yet the greatest comeback in NCAA history football at the time was from that backup quarterback, and still the standing greatest comeback in NFL history in the playoffs in a wild-card game also from that same backup quarterback. Frank, there’s a really good reason why I think you’re an inspirational speaker. I think you get hired in the off-season perhaps to address people, and why you’ve also led churches because I can’t really think of a more fairytale story or one that you can pull more inspirational lines out of it, and that you’ve actually lived in and done it, makes you a symbol for others of possibility and hope. I’m sure you feel that.
Reich: Well, I appreciate you saying that, and I’ll always tell people, David, this is a very important part of the story. If I’m having a chance to talk to somebody, and they are talking about the greatest comeback in NFL history, I’ll remind them that a month later we’re planning Super Bowl 27, and Jim Kelly has come back from his injury, started the Super Bowl, we’re playing the Cowboys. Early in the second quarter, he gets hurt and he hurts his same knee. We’re losing 17-7, I step onto the field. Now remember a month ago, we just had the greatest comeback, so I’m thinking 10 points is nothing, we’re going to come back, we’re going to annihilate the Cowboys. Like you said, it’s going to take the story books finale.
Reich: It’s a fairytale to the very end, we’re winning the Super Bowl, I’m holding the Super Bowl trophy, I’m going to Disney, [laughs] and the whole thing. There’s only one problem, I ended up setting the record, the Super Bowl records for the most fumbles, in a Super Bowl game. I love telling this part of the story because, here in the course of one month I went from the highest of highs to the lowest of lows professionally. I understand there’s many more important things than football in the world, but when it’s your livelihood, it’s important. Where you go from being the star or the hero to being humiliated in front of the biggest TV audience that watches anything in the course of a year and you’re the big reason why we lost. I mean, it is navigating through those highs, and lows, having the perseverance, having the confidence, and humility to not point fingers to take responsibility for what you did, to learn and grow from it. Not to get too overwhelmed with how hard it is to go through that, but just to set your eyes on the next step on the next day, on the next play, on the next game, and keep pressing on.
Gardner: Keep the pressure on, and you’ve done pretty well at that, not just in football or about to move into a coaching career, and a little bit, but also as an investor. I think a lot of us who are hearing right now can relate, especially for playing to me the only game that counts, which is the long game, then you’re going to go through times where you watch Amazon go as it once did for me from 3-95, and then two years later back to seven. It hurts a lot when you have a 30-bagger that you’d basically just watched almost vanish seemingly overnight, and that’s just a couple of years of one stock. Again, as investors, I think a lot of us can both relate to, and admire the persistence and resilience that you’re talking about. In this case, well, with sports, but for a lot of us, with our investing.
Reich: That story of Amazon, what I was thinking when you were saying that is, where it ultimately comes down to being invested in. Is there right leadership? Is there the right company? I go back to no man becoming suddenly different from there, haven’t shared the same company I invested in the same player. When I set a record for the most fumbles in a Super Bowl game, and fundamentally the same player that I was when we had the greatest comeback, in NFL history. Circumstantially on some things, there was a little bit of lack of execution, and bone. There was a quick drop in the worst of my play, but what changed? It was just a couple of fumbles here or there, and those aren’t going to continue. There’s no reason to think that those things are going to continue, and I have also seen that, like you said, David, in my investing life. Not just in companies, but in people, and things as well.
Gardner: Absolutely, and we’ll get more into that in a little bit. But losing to win is one of my favorite themes, because as somebody who’s picked stocks for most of his life, I’m so aware of how many bad mistakes that I’ve made. I think you have to take risks in order to win. But if you take risks, you’re going to lose a lot, otherwise they weren’t risks. I think a lot of us again can hear that losing to win theme. Talk about high, highs and low, lows, and that was just really in one season, Frank, the year was well 1993. That means we’ve got something like 28 years from then till now. Let’s move it forward a little bit, what else do you want to say about your NFL career?
Reich: Well, I played 10 years with the Bills and then I had four more seasons, one with the Carolina Panthers, next season. That was cool. Now you see a little bit of high uptake there on the graph, wasn’t necessarily the most successful season as far as wins, and losses, but it was an expansion team. We had a chance to start our new NFL team, and I was first starting quarterback on that team, and so that was a great experience.
Gardner: I believe you, you’ll always hold the record for having thrown the very first touchdown pass for that franchise, the Carolina Panthers. Do you remember who caught that ball?
Reich: I do, Pete Metzelaars. He had the first touchdown pass in Carolina Panthers history. No one can ever take that one away from me. Pete Metzelaars, but yes. Then I went from there to New York just now you can see the graph going dramatically down. We were one in 15 that year. I played a good bit that year because Neil O’Donnell was the starting quarterback, and he got hurt.
Gardner: He was a Maryland guy, right?
Reich: Another Maryland guy. Yes, he was. But another difficult year as far as wins, and losses. But again, I go back to the people, and the process. What we talked about earlier really made some quality friends there, some great teammates. Then I played my last two years in the NFL with the Detroit Lions. They’re pretty innocuous. They are not money highs or lows in those two years. But they were good years. I was reunited with my college coach, Bobby Ross, who is now coaching there for good years. The other nice thing about the last two years in the NFL was now my children. My last year in the NFL was 1998 so my oldest starter was now eight, the second one was six, and then two so they were able to come to games, and know that their dad played football. That was all. That was pretty fun back then. Then I retired after 14 seasons and a long career in the NFL.
Gardner: Do you remember your final moment was there a trigger where you like, I’m done?
Reich: Yeah. I had hurt my throwing shoulder, and I knew that it required surgery, and we were having to move back and forth and I remember leaving Detroit after the 14 season. My wife Linda said to me, because she had been following me around all these cities, and we’re going back, and forth, we had to change the school for the kids because they are in school now it just got very complicated. And after that last game, she’s like in Detroit after the 14th season, she’s like hey, I’ll support you 100% if you want to keep playing but I can’t. We got to settle down with the kids, and I was like am done. It just became physical, I was 38 years old. I’m not Tom Brady.
Gardner: No one is.
Reich: My body was ready to move on. Finishing that career, I had an opportunity to go into coaching right away. I actually had four different offers to go be an NFL coach, and I turned each one of those offers down because I knew that to be an NFL coach was like a 100 hours a week job, and I had three young children. I just wasn’t ready to make that commitment being away from them. I didn’t make millions, and millions of dollars as we’ve talked about the finances back then. They were good. I mean, I made a lot of money, but relatively speaking, I had saved some of it so I’d be fine for a while. But I wasn’t independently wealthy or anything like that so my wife, and I have planned to move down here. If I could just find a job making 75 to $100,000 a year plus what we saved, we could probably live the lives we wanted to live. I said no to those coaching jobs. Because I wanted to be at my daughter’s swimming, I wanted to be able to help them with their homework, yeah I wanted to be able to do those things. Thankfully, the NFL playing career had afforded the ability to make that decision, to say no to coaching career at that time. That was just because the priority was all my family, and not just I love football, but I was still able to stay involved in football by doing camps with kids, and my brother was a college coach, and I helped him out a little bit.
But I also, David, wanted to do something else. I took a step into full-time ministry. I went to seminary, got a seminar degree, was traveling the country doing a lot of speaking at churches, really just trying to talk about making the connection as a former football player, how do you connect faith, and life? The vocation for me was football. I would go to places, and talk about as a Christian actually, what does that mean? I really enjoyed that part of my life of going to seminary. I’ve learned things, and have experienced there’s still stay with me to this day.
Gardner: Didn’t you end up, Frank, being a head of a church?
Reich: Yeah. I saw two things. I went to seminary, I ended up becoming President of the seminary where I got my degree, I did that for three years.
Gardner: That’s what happens very often.
Reich: Well, no. It was only because the person who hired me was an incredible man. He was willing to take a chance and he believed in me. When he asked me to be the president of the seminary I laughed. I said that wasn’t something I grew up thinking I was going to be, and I didn’t think I was qualified. I told him that I’m not qualified to be the president of the seminary, but he saw something different. He saw some things that he thought that would work, and so I committed three years to him. I said, let’s give this a three-year run, and it was great. I loved all of it, but at the end of the day, I just knew it wasn’t ultimately what my calling was. Then I stepped out of that role as president of the seminary, and on a pass-through to church, served as an interim pastor and drove our church for about a little less than two years. Felt like in many ways I always prepared for that by doing a lot of speaking, but pastoring is different from speaking.
More than anything, David, I just think I was led away from that in a positive regard that when I would go out speaking all over the world about connecting faith and vocation, the message was, you don’t have to be in full-time ministry to have your faith be something important in your life. It can be important to you as a football player or as a coach, as a fireman, as a school teacher. So how do you live that out in those arenas? When I stepped back into football, it was just a natural progression for me to get into coaching, which is something that I always wanted to do. Here’s the key point, when I got back into coaching, I had logged in six years when my girls were younger, doing homework with them, being at all their events, picking them up from school, dropping them off, all those things. But now it was time if I was going to get into coaching, I was going to have to take that step and go. In 2006, I started to make that by doing an internship with the Colts.
Gardner: I want to just flag that there, Frank, because when you and I had coffee earlier this year, that really jumped out to me, that you had left the game when you could’ve taken maybe a head coaching job or at least a significant assistant job coming right out of retirement. You went to the church that as you come back to football, you entered, I believe that’s the lowest level. You were an intern for the Indianapolis Colts.
Reich: That’s right and that’s fine. When I said no to those jobs after I retired, I knew what that was going to mean, but that was just a choice I was going to make for my family. I wouldn’t change that anytime, that was a great decision. But what it did mean was that I served as an intern, they still didn’t give me a job, so then I volunteered because there wasn’t any opening. Then I volunteered and I said, “Listen, you don’t have to pay me.” Let me just be around, let me see if I can earn it. I stuck around for six more months doing that, then did another internship at the next training camp and then finally, an opening came and I was hired. When that opening finally came, now it was going to be quality control. That’s a paid position, but it’s the lowest of the paid positions. But that also put me in the room was Peyton Manning, because I was also the assisting quarterback coach. Tony Dungy was the head coach, Jim Caldwell was the quarterback coach, and so they gave me a great opportunity. I’m now in the meetings with Peyton Manning, and this is where the fire just started to get ignited all over again.
Gardner: We’re arriving near the end of your stock graph. Your life’s going to keep going and I’m excited to see where you go from here, Frank. But I see a dip and then a big jump and then a little bit of a dip and then rising to an all-time high where we are right now. Can you just talk us through that briefly?
Reich: The dip is I coached with the Colts for a few years and then our whole coaching staff got fired, I went to San Diego, I eventually ended up in San Diego as the offensive coordinator. That was a dream. I wanted to be an offensive coordinator, did that for a couple of years, but we had a bad year and I was fired. I was fired as the offensive coordinator, and that’s where that graph just drops to an all-time low. Any aspirations of a head coaching job I thought were gone, but just stuck with it. Try to work hard and be the right person to take the high road. I felt like certainly in my mind, it was certain things were unjustified about the firing, but I also learned that I had to take ownership for the things that I didn’t have control over and that I could have done better and I had to learn from those. I think I did. Then you see that graph go back up pretty sharply there as I got hired by the Philadelphia Eagles to be offensive coordinator there. Then in two years later, we won that Super Bowl and that was a new high right there. Really that graph right there maybe shouldn’t dip down at all, should almost be a little bit more level If I had to draw that down, and just a slight increase up. Maybe it comes down a little bit off head high winning the Super Bowl. But certainly then I came here to the Indianapolis Colts as the head coach. This is my fourth year now and I just had some ups and downs along the way, but a solid rise.
Gardner: That graph I’m going to say goes right into July of 2021. That’s where we are right now. This is the point in time where we’re having this conversation. I do want to talk about being the comeback kid once again, Frank. I was noticing that first year with the Colts in 2018, I think you all got off to a one and 5-star. Here’s the new coach, he’s won some and he’s lost some. He’s known high-highs and low-lows in his career. That probably didn’t feel great and yet here we go again, 2018 from that point, the Colts finished 10 and 6 and made the AFC playoffs. Frank, you went something like 9 in 1 in the latter half of your first season as coach, did that feel like another comeback?
Reich: It did, but what was more satisfying or satisfying in a different way was it wasn’t just one game, one day, it took 10 weeks. Just an effort by the team and the focus. We had this mantra of 1% better every day and this mantra of want to know and those are all simple things they get used a lot in the sports world, but it just took on a life of its own and we all bought into it. That was a mentality that helped carry us through.
Gardner: That’s wonderful. James Clear, the author of the book Atomic Habits, I don’t know if you’ve read that book, Frank, but the subtitle of the book is tiny changes, remarkable results and he really is all about what is a 1% improvement? It doesn’t need to be much, it’s 1%, but those really add up overtime. I can see that you are a proponent of that same philosophy.
Reich: Yeah, no doubt. That book, I’ve read that first chapter to our team. Usually every year I’ll pick out excerpts from that beginning chapter, and talk about the British cycling team and how they’ve made their improvements with that mindset.
Gardner: It’s a great book and James himself, with a little bit of a career in sports in the sense that he played college baseball, and there’s an amazing story that anybody who’s read that book and I highly recommended it, of course, the cliffs notes would be you can listen to my Rule Breaker Investing podcast with James Clear where he’ll some of that story, but I’m so glad to know that that’s been inspirational for you as well. Well, let’s pause it right there, Frank, you have kindly consented to do a Weekend Extra where we’re going to talk football and I’m really looking forward to that. I’ve just got a few questions or thoughts for you and I just love to hear. We’ll talk some more about football, maybe not even previewing this season that’s coming because enough other people are doing that. I just have some analytics and a little bit of this question as a long time sports fan and then numbers guy myself. But now we’re going to move to the final stage of our time together. That’s the three key moments that have made you the investor that you are today.
This is a little bit of a journey on its own, Frank. While finances are part of all of our journeys. We’re pulling that out now and we’re just looking at that threat of your life. We heard about your first car that you bought or that you saved a lot of money but maybe didn’t know how to invest it as an athlete. I don’t even know we’re about to find out, but this is our opportunity to realize that we’re all investors. Every single person listening to us right now is an investor. If you didn’t know that, switch on to it because every time you spend $1, whether it was for a stick of bubble gum or toward your 401(k) plan, you just made an investment in. In fact, if you think about time, we’re investing all of our time as well. We’re all investors. What I love about this series and having head coach Frank Reich with us this week is we get to hear the investor side of this celebrated coach and player. Frank, let’s start it right there. You have thought about it. The three key moments making you the investor that you are today, what was moment No. 1?
Reich: Moment No. 1, David, I don’t even know if I’m saying this right, but it was this really beginning to understand the difference between risk tolerance and underperformance tolerance. What do I mean by that? See if this makes sense and if it doesn’t please set me straight. But I remember an advisor telling me one time, “Frank, everybody thinks that they have more risk tolerance than they actually do.” In other words, he would say to me, “When you say, hey, can you stomach a 30% dip in order to possibly reap a 30% gain?” Everybody thinks about the gain and says, “Yeah, no.” But then when they actually go through the 30%, if they go to their advisor and say, “What are you doing? I can’t stomach this.” Well, so No. 1 is I wanted to understand my own as what I have really come to appreciate what you said. What is that level of risk that I am willing to take? How much am I willing to see the portfolio go down or a company go down? I just came to a point where I was doing so poorly as an investor that I was giving my money to advisors. In some cases, trusted friends who were with very reputable companies, and I was underperforming the market with regularity. It seemed like I was an all-star at underperforming the market. I somehow was tolerant of that for a really long time. That’s what I’m saying. I had to understand the difference between risk tolerance and the tolerance of underperformance. I just finally got to the point where I said, as you just alluded to earlier, I needed to take control of my own investing and understand what I was doing better. I started planning a virtual game.
I remember I read The Motley Fool book when it came out a long time ago, many years ago, in the ’90s, and was inspired by that. I didn’t know much about it at the time, but then I started to plan a virtual game. I started buying and selling stocks virtually, and I kept outperforming what the money manager, of course I wasn’t subscribing The Motley Fool at the time, so I think wasn’t getting all this services, but I somehow had enough recommendations that I was able to outperform the money managers but I went through this for 10 or 15 years. Then there was something just instinctively or intuitively inside me that said, “I understand mutual funds. I know there’s a place.” But it didn’t take me long to figure out what everybody says is true. I just go index. If I’m going to go that route, I just go with the index funds. I went through a stage of my life as an investor where I tried to beat the market by giving my money to advisors who were going to buy mutual funds and expect to beat the market by buying the best of the best funds. That just never happened. It just never ever happened anywhere close to nearest consistently as I needed it to. Then I started looking for funds. I can’t even remember what the right word is that I only had like 15-25 stocks. Those are the funds that I want to be involved in. This was my gearing more toward buying individual companies, but it took me way too long to get there. Yeah, that was it. It was just understanding that this is not OK. It’s not OK for me to be 50 years of underperforming the market when I’m in high income-earning years. I just said, “I got to take control.”
Gardner: Before we move on to key moment No. 2, Frank, let me pause there for a sec because I might be stretching analogies here, but is it fair to say that they were kind of the starting quarterback, the financial elite, the people that you are working with, the suits. Am I hearing that once again, you came in off the bench as a backup quarterback and said, “You know what I need to take control of, this portfolio?” Once again, I think you created some wins.
Reich: I love that analogy. Yeah. I suppose it was easier because it was virtual. I was doing it on the practice field and I wasn’t actually having to invest my own money, but it helped give me the confidence to take that step.
Gardner: Yeah, and really taking control of your portfolio that really is like taking a snap from center calling signals and executing players. We’ll talk about this on the weekend. I often think we want to remember the other 10 players. In a world that so often silver, it’s just the one player which we’ll talk about on the weekend. But it is very true. All of us, with our money, we do need to quarterback that or at least be comfortable as a backup quarterback that we do have Jim Kelly or Boomer Esiason playing in front of us because if we don’t, we’re going to be really dissatisfied playing backup quarterback for a decade or more.
Reich: Yeah. Now, that’s well said. We don’t have to settle. That’s not being greedy. This isn’t about being greedy. This is about being a good steward. This is about really wanting the best for you and your family. There’s nothing wrong with what I had to learn. I was almost loyal to a fall. I wasn’t going to be the person who is going to give my money to an advisor and then after six months if you didn’t produce something outstanding.
Gardner: You gave 10 or 15 years?
Reich: Yeah. I think if I were talking to myself back then, I would just say, “Hey, let’s stay clear, what’s reasonable goals that you can give these people to hold them accountable? What are the standards? What’s the process kind of look like? What’s the accountability process kind of like?” If I had done that, I think I still would have underperformed the market for a lot of years, but I think it would’ve been about half as long as I did. As we know, instead of 15 years, if I could have underperformed for only seven, I would have given myself a chance to double my portfolio by just doing the normal right thing. But I really did, David, as you alluded to, I settled for mediocrity. Somehow I thought mutual funds were this magical way to give me the diversity that I needed, but what I didn’t realize was that the cost of that was going to be the upside of the big wins. Ultimately, I was just going to be like an anchor pulling me down.
Gardner: Well, and I love your phrase underperformance tolerance. I might borrow that when I use that one in future because there is a lot of emphasis on risk tolerance out there in the world. Rightly, so we all do need to know not just what we think a 30% drop would be, but actually to live through it and see if we can take it or not. But there’s another form of tolerance that is less talked about and that’s tolerance of underperformance. Frank, you just shared that it occurred for quite a while in your life and it’s frustrating, years we can never have back but we’re always looking forward, not back. Let’s move onto key moment No. 2, Frank Reich, making you the investor you are today.
Reich: Yeah, I would say No. 2, this was a number of years back, so I don’t remember what was the first service that I subscribed to from The Motley Fool. There was Stock Advisor probably. I don’t remember the year, but it was a relatively short time that I was doing that, and I was slowly starting to buy some of my own companies. So, now I’ve gone from, let me take control of my portfolio, I get in, I subscribe to Stock Advisor. I’m just dabbling though. David, I’m just dabbling. I’m new to this and I’m a little bit apprehensive. But I’m just dabbling. But then The Motley Fool comes out with a promotional deal that caught my eye, and your brother Tom, I watched his whole presentation and he said, “Buy into this service and I am going to give you the recommendation that I really feel like this is the one stock if I had to pick for the next, however many years,” and it was NVIDIA. If I remember correctly, it was at $20. Looking back, I wish I would have poured a whole lot into it, but what I had probably poured $10,000 into it which was an immense amount of money for me at that point as an investor. I mean, I felt like I was taking the biggest risk I’d ever taken in my life. I was sweating every day of it. Then I watched that growth from $20 to $80. David, I had never had an experience like this before. I bought a stock at $20 and it was now at $80. I mean, I’ve just gone 15-years of under performing the market and it just opened my eyes to a whole new approach. Then of course, I learned the other valuable lesson from that first big stock pick in NVIDIA was of course the phrase that, I’m sure other people say it, but you made it famous.
As far as I’m concerned, you coined the phrase “winners win.” Of course when I got to $80, I’m like, OK, I got to sell. I’m out of this thing. I mean, I just made it. I looked back and I sold. But that’s just as equally an important part of what I learned. That second moment for me is the buying and selling of NVIDIA and winning on it in a major way but also understanding that if I really want to get the gains that are going to outproduce the market that there is something true. There is a reason that all these mutual funds struggled to beat the market because even when you pick individual stocks, there’s only a handful that are going to have those returns that can boost your returns, that can give them the firepower that they need. But then you’ve got to let those go. I mean, like in football terms, just like giving it to the hot hand, if basketball feeds the score. If Steph Curry’s hot, just keep feeding it to him.
Gardner: I think it’s because people here buy low, sell high. Nobody’s saying buy high and never sell, except me. That’s what I say. I say buy high and try not to sell. You’re right, winners win. There are exceptions that, of course, prove the rule. We all know times that winners don’t win. You’ve been a winner many times and yet in our conversation, you shared some tremendous loss and sense of loss in that. We’re all winners and losers all the time, but feed the hot hand or in stock market terms, what businesses are really changing the world, shaping the world, shaping the future, and that’s not going to stop just because their stock doubled in a given month or four year period. Apple was an incredible buy, sad to say, the day Steve Jobs died, it has done great under Steve Jobs. But wow, look at what Tim Cook has done. Turns out it’s not Steve or Tim, it’s a brand, it’s a culture. It’s a world that wants computers to be simple to use, and give mom or dad the iPad and it works and that’s so powerful and winners win. I thank you for saying that, Frank. NVIDIA has continued to just be a spectacular long-term performer. We had it there in Stock Advisor. The date was December 18th, 2009. The stock was at $15.46. Back then it’s up more than 50 times in value if you just bought and held all the way through. But Frank, we’re never going to gain a 4-bagger in a pretty short-term period because that was really an eye-opener for you that individual stocks might be worth paying more attention to.
Reich: Yeah. That’s what started it. From there, I just continue to try to learn, but it’s hard. I mean, it’s hard to break those old habits. They die hard and to really trust it with your money and thinking, I’m just a coach. But really just beginning to continue to educate myself and understand the service that The Motley Fool has provided. It was an opportunity not just for stock recommendations, but really something to learn. That’s probably what attracted me more than anything. I told you my parents were retired school teachers, I want to learn. I want to learn how to fish as the old adage goes. It’s great. I don’t mind a nice stock recommendation and occasionally I’ll buy something that I don’t know anything about because somebody says it, not very often. 99% of the time I want to know what I’m doing and for sure the Fool has taught me that and is teaching me that.
Gardner: Well, thank you for that, Frank. You’re saying you want to learn, you’re helping all of us learn and you’ve been so generous with your time this week and I want to thank you again for it. Let’s move to the final key moment. Key moment No. 3, making you the investor you are today.
Reich: I’m borrowing right from your playbook here, from The Motley Fool’s playbook, because this was written somewhere sometime in your literature that is out all the time. But the key moment No. 3 is already alluded to, trading away conventional wisdom for Foolishness. I mean, I have to admit I’m captivated by the language that I see, that I read, that I listened to on Motley Fool. It fits me. I don’t know. I just like it. I like being a Fool. I like trading conventional wisdom. I’m a contrarian probably at heart. Some of the Foolishness, some of the conventional wisdom that we traded away, and some of the Foolish thinking that I’ve learned is, of course, yours David this is all you about making your portfolio reflect the best vision of our future. I know that’s a pride and joy to you. I’ve listened to you say that on a number of times on podcasts that I’ve listened to. Particularly, I think it was the six rules for building a Rule Breaker portfolio.
Gardner: Right. Earlier this year, thank you.
Reich: But that’s true. That’s what I want to do. Then when I look at my portfolios now, that’s what I’m doing. I mean, where is my sense of where things are going as a nation, as a world and where’s the future with all the inter-connectedness? Who are the companies that are doing that? Who are the leaders because I believe in leadership. I’m enjoying doing that. I’m enjoying investing because my portfolio is painting a picture and a vision of something that I believe that we can become as a nation and as a world and these companies can help us become that. That’s a little bit of the football coach in me and understanding the importance of hey, you got to paint a vision for the team. Here’s where we’re going and then here’s the people that it takes to get us there and these are the companies I’m investing in are the players that I think that can get us to that vision. It becomes exciting. People that know me, know how passionate I am about this. I got football and then I got this. Those things make me. Just two others I would say just real quickly when I think about some of the Foolish thinking that I’ve come to embrace is we alluded to it earlier, but let your winners run, Frank. Frank, let your winners run. I was going to say this earlier. Why do you let winners run? Because no man becomes suddenly different from his habits and share starts. That quote, it’s been on my desk since 1985, actually helps inform my investing, NVIDIA’s all of a sudden not going to become somebody different. They’ve got great leadership. They’ve got a great model, they’ve got a great competitive advantage, and great product execution. They’re going to keep doing it. They’ve got the habits in the people. The cherished starts and the habits that’s going in the right place. That just makes sense. I never saw that though. Like I would be like, how can I double my money and get out. Let the winners run. It’s still hard to do though.
Gardner: Yeah, because they’ve already gone up. That’s what trips most people up. They think I could have had it there but now it’s there. I’ll wait for the dip. Sometimes I’ve said dips, wait for dips. Very infrequently do great companies, I mean, it’s going to happen from time-to-time but if you’re hoping for that company to trip up on its next earnings report or make a bad product launch, you’re probably not going to be right a lot of the time and it’s probably just going to keep going. That’s been my experience with great companies.
Reich: Well, now that my children are old enough and doing some of their own investing and I talk to them about this and I mention a company that I really like and that I know might connect with. I had a daughter who worked at Google so there’s something in the tech world. She’s very savvy and so I’m going to mention something in store. Look at the graph, but it’s going up. That’s already had a big off, man. Foolish thinking is adding up, don’t double down.
Gardner: Thank you.
Reich: I think that is another example. Add up, don’t double down. I was the classic double down guy. Let me find something I think is good, wait ’till it gets down there and now let me double down, lose some money. Let me double down on it. Sometimes it comes back but usually never as fast as you think. Many times it never does that because no man becomes suddenly different from his habits and cherished starts. So yeah, trading away conventional wisdom for Foolishness. That has really made investing fun. But here’s the last thing I would say is like so many other worthwhile things. You always have to keep the pressure on even if you’re a Fool because it’s not easy to maintain the consistency and the discipline that it takes to be Foolish. I love that even actually more on the consistency of Foolishness. That’s hard to do. You got to keep the pressure on. That’s why I listen to podcasts when I can. Just to remind myself and I love the team at The Motley Fool. Like with players you need to remind the players of the basics all the time. Why? Because they’re the basics and they are important and we don’t go anywhere if we don’t get those right.
As an investor, I don’t want to make a decision without sticking to the principles that I know have worked for me here in the last 10 or so years. I don’t mind saying in 2021 because of many of the pictures I was following from The Fool my IRA account did so phenomenally compared to the market. I outperformed them. I told you 15 years of underperformance. In 2020 my IRA portfolio was five times what the S&P was. That was just mind-boggling to me. But I just know as an investor, I got to keep the pressure on and just continue to stay disciplined in that approach and continue to play the long game. Simon Sinek, I remember his book, The Infinity Game, and you’ll say everybody is planning that there’s no finish line. Like, don’t forget the finish line. You know what I mean? Just people in process. There’s quarterly reports in all that stuff, there’s metrics that we’re going to measure and hold ourselves accountable. That’s OK, that’s good. But that’s not ultimately determine your success in the organization. It’s helping guide us along the way. But it’s an actual book if you ever get the time to read or listen to it. I don’t listen to all the stuff, but that was really good.
Gardner: Yeah. Well, Frank, in conclusion, I think I know why we hit it off so well, when we got to meet each other earlier this year, and that’s because you have the mindset and it turns out that same mindset isn’t just part of your professional life. It’s also part of your life life, and it’s also part of your investing life and when you can put investing and business, whatever our business is and live together and you have learned, you’ve been a learning machine, a learning creature throughout your life and I would add, break the rules along the way. The rules that deserve to be broken. I think that I’ve always loved people that go against conventional wisdom. We’ll talk about this a little bit in our Weekend Extra but always go for fourth down. I like the people who go against expectations because that’s usually where value is created, in business, in investing, and in life. If everybody thought one thing, but it turns out they’re wrong, and you think this other thing, those are the situations where you have the most leverage and the most possibility.
Frank, I want to thank you again so much for being a Rule Breaker, for sharing your mindset through the course, not just of your own life, but the investing life that you shared with us and it’s an amazing life. I’m excited for the next 30 years, Frank Reich, and a lot of us are going to watch it a little bit more knowingly now, and sit up on the edge of our seats to see where you’re headed next. I know you have a charity, not today. That means a lot to you in Indianapolis and of course that’s your adopted city. Now that you’re entering the fourth year of being the head football coach in Indianapolis, would you like to say anything about that in conclusion?
Reich: Yeah. Thank you, David. Yeah, knottoday.org is a foundation that my wife and I started that fights against the sexual abuse and exploitation and trafficking of children. It’s something that we and my wife for long time we have been passionate about. We’re going to fight for these children and we’re not going to relent and we’re not going to stop at any measure and we are going to pull out everything we can do to fight on behalf of these children, to bring awareness to the issue, to prevent the issue, and then to bring restoration to those who have been affected by it.
Gardner: Thinking through the whole process and I really appreciate that as well, Frank. We’re giving a little bit of short shrift because that’s just at the end of our conversation, but not today. I think it’s knottoday.org. Do I have that right?
Gardner: knottoday.org, I will be making a contribution this week as well. I encourage anybody who is inspired by Frank’s story, all of the stories that he shared with us this week to checkout knottoday.org. Frank Reich, thank you so much for joining us Fools. Fool on, sir.
Reich: Thanks, David. Fool on.
Gardner: The Rule Breaker Investing podcast spends about a third of our time on investing, about a third of our time on business, the professional world, and about a third of our time on life. The goal is to make you smarter, happier, and richer across all three of those dynamics and boy, if I don’t feel like Frank Reich did that for me anyway, this week I hope for you to. I want to mention here at close, Frank was generous with his time. We’re going to talk only for about 15 minutes or so, but we’re going to talk about football in a very focused manner. I kept finding myself tempted to want to talk some more football, but I realized that’s better for our weekend extra. Frank and I are going to talk some about his life as an NFL head coach and some other thoughts about the game of football. That’s going to come to you this Saturday. Again, about 15 minutes, if you’re a big football fan, it’s a treat if you’re not, hey, we’ll talk to you next week when I talk with Ollen Douglass, the Head of Motley Fool Ventures, again, soliciting your questions about venture capital. @RBIpodcast is the way to petition us on Twitter. Give us your best questions. I will share some of those with Ollen next week as we all get smarter, happier, and richer about venture capital, Fool on.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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