Joe Moglia on Going From Football to Wall Street

defensive coordinator at a number of esteemed college teams. UM such a fascinating, unusual career, and he went back and forth between the two of the career several times. It's really an intriguing career path he took when life basically threw him a lemon, he really made lemonade and created one of the most interesting careers in sports and finance. Uh, there's a ton to learn about him. He's been unusually successful in both careers and I just found this to

be absolutely fascinating. So, with no further ado, my conversation with Joe Mowglia, this is Mesters in Business with very renaults on Bluebird Radio. My extra special guest this week is Joe Mowglia. He has one of the most fascinating careers in finance. He was the head coach of a

football team at Coastal Carolina. You from throughen Uh. He was also a seventeen year veteran at Merrill Lynch before becoming chairman and CEO of t D A Merritrade, which was the largest online brokerage firm if you measure it by daily retail online trades. He is also the author of two books, The Perimeter Attack Offense and Coach Yourself to Success Winning the Investment Game. Joe Mowglia, Welcome to Bloomberg Barry, Thank you very much. I'm excited to be on.

I'm excited to have you, and I have to start out with your career, which is which is so fascinating. You began in athletics. You were a college football coach for sixteen seasons. What made you say let me pick up a side hustle and finance. Well, there's a little bit of a story you know, behind this, of course,

but I will jump to the transition time. So I coached for sixteen years and uh my one who was my first year as defensive coordinator at Dartmouth and we had four children, and we were in the middle of a staff meeting in the sheriff from Hannover, New Hampshire comes in and he needs to see me, and I was talked it was a death in the amiss coach, I'm sorry. He has me divorce papers. So I couldn't afford to live independently and support my wife before children.

So I got permission to move into a store group above the football offices. I didn't mind that it was small, but it had no heat, and this is New Hampshire, so I could see my breath in the winter. I've lived there for two years now. My goal as a coach Artery was one day I wanted to be a coach of a major major school, you know, in Michigan and Notre Dame in Nebraska, whatever, but that was my goal.

Well that year January and the Orange Bowl, Miami upset in Nebraska for the National Championship and their secondary coach, my card that took the head job at l s U and the following year that defensive coordinator was going to Cleveland Browns and they offered me the opportunity to go down as a secondary coach and then later on succeed Oliver Dotti, the current defensive coordinator as defensive coordinators. So I've gone from defensive cordinate in the IVY League

the defensive coordinator in the national championship team. I could not have a more perfect next step of my career, could not a bit more perfect. But you know, a football coach works seven days a week, about eighty hours a week five months. You don't get a day that's literal, there's no days off and um and especially back then, coaches didn't make that much. And I'm going to be living in Carl Gables, Sparta, where my children to live with a mom in New Hampshire, and I couldn't afford

to flying back the forth. So the most difficult decision I ever made was I turned down that job. But I didn't think I could do that job as a coach if I couldn't live up to my responsibilities of father. But that also told me very clearly that means I can't stay in football. So I made your in economics and I always had an interest in Wall Street. Uh, so I thought that I really wanted to pursue a

career on the institutional side of Wall Street. Not easy to figure out, but ultimately Mary Lynch gave me an opportunity. In their institutional NBA training program. There were twenty six of us nbas, I want football coach, and pretty much everybody said, this football guy is not going to make you here. But ultimately the majority of those NBA's working for me and I wanted turning out okay, but that the transition from football to Wall Street the first time.

So so you were at Merrill Lynch in the early nineteen eighties at the start of of an eighteen year bull market. What was it like in those days? That was a very different world than the world of today or even the world of the late nineties. I would agree now, i'd be After I went through my training program, I became an institutional bond salesman. So it was also an interesting time in the buying world because I didn't

realize that up until then. But you take a lot more risks on your trading desk and fixed income than what you would have in the equity world, and rache were high, but they did. The bull market wasn't just in equities, the bull market was also in fixed income because race were coming down, and uh, there was a tremendous amount of things that you know, I needed to be able to learn. But frankly, I already knew how to handle myself on distress. I knew how to listen,

I knew how to have an impact on people. And I think I was without question a much better bond salesman because of my experience as a coach. So so so for me and I frankly and I became a pretty prolific bond salesman. And then from there I wanted moving into executive management. In the late eighties, Mary Lynch had horrible three in the seventy million dollar mortgage backed security loss and that was very significant for us the

time back then three seventy seventies, very young money. But I think Wall Street was learning also that you needed your leaders, your real leaders, to be an executive management positions, and they just weren't producers that that wanted getting promoted. Uh. But my ability to learn was going on the markets. How critical fixed income, as the role of the FED, all of those things which have a significant impact on the equity markets were all those things that I learned

during that period. And we'll talk more about the bond market later, where where arguably still in the forty year bond bull market that began back in the yearly eighties when Vulcar broke the back of inflation. But let's stay with Merrill Lynch for now. You you were at Mother Meryll for seventeen years. What was your last role before

you departed? I had I was the first person in the firm to go from the executive management executive management team on the institutional side to the private client side and um. Before I left, I was responsible for all investment products, the four O one K business, the insurance business, and the middle market business. So that's a pretty serious role and it obviously prepped you to become CEO of t D Merrit Trade. I think that was two thousand

and one. Tell us about the transition from Meryll to t D What what was that like? Well, I think that I was leaving, you know, one of the greatest brands in the history of finance. We were, I think it's the time. I think we were an eighty billion dollar company. You know, we had I think sixty seventy

thousand employed days and forty seven different countries. We were double a rated bond, and I was going from a company that had incredible stability to a company that was blowing up as the dot com bubble burst, and um Merritory was losing a lot of money. The market cap had gone down about seven million. And I hit that my homework before taking this job, and I thought it was probably a ten percent chance we might go out of business, a ten percent chance we might hit a

real home run, but eight percent chance. No matter what, I was going to make you better. And then after I got there, I realized that I though there was a chance we go out of business. And one of the things that I learned pretty much early on, I'm not an expert, that we were really a technology firm and a financial service wrapper, and we needed to focus on what core competencies were so we could leverage those into competitive advantages, so we could be leaders in the

market niches that we chose to participate in. By doing that, I would take half I got We were seven or eight different countries, I got out of virtually all of them. We were doing different businesses and different products. I got out of all of them, and I took that money half of it to offset or set the losses that we were having, and the other half I poured back into our core competencies. And core compacy was transaction processing well in the financial world as buying and selling stocks.

And that was when we became very, very very significant in that arena. And once we kind of got ourselves straight. Now, the the recession after the dot com bubble buss March two thousands of market thousand and three, and this is around the middle of that, and consolidation had not begun in the industry, and that's when I felt that was a significant opportunity for us. So so let's talk about

that period that bear market. Um Market peaked March two thousand around, did not bottom until October two, and then again a second bottom in March o three at about a thousand down. I have to imagine that you're running the hottest online training company at the time. Trading volume how to have really dropped off a cliff during that period. What was that like? Well, you know, Barry kind of you can almost make the parallel to what's going on today.

Back in the nineties when everything was going incredibly well for everybody, uh the day trader because of the internet, uh became alive and UM and one of the things that in Merry Trade did they really did everything they could. They try to do a lot of other things. So they tried to focus on the day trader. Strategically, that was not a great decision because the day traders wants to market blew up per your reference, the day traders want up going out of business. So we needed to

kind of restructure our entire business. But it was not to do something that we couldn't do. It was to focus on the ability to be able to trade, not the day trader, just an active trader platform and UM. Uh. So so at the time the industry that was tremendously because how that the industry is far greater supply than there is in terms of demand. But but trades had

certainly significantly dropped off. But by two thousand and three, doing leading the industry and salivation and focusing on the emphasis that we focused on, UH, we start we started to do more trade than anybody else. Let's talk a little bit about how did coaching prepare you for running

a giant financial organization. I think in terms of UM I've often said that I was a much better bond salesman, I think in a Wall Street executive because of my experience as a coach, and then when I went back to coaching, UH as a head coach, I think I was a much better head football coach because of my experience as a business leader. And UM, when you think about football, you need to be able to make decisions very quickly. Your entire career is dependent upon what you

do on Saturday. You have an incredible stressful eighty hour work week. UH. There are no days off in the span of a five month season or so you need to You need to be able to understand people. You need to be able to motivate, inspire, You need to be able to discipline, you need to be able to insent. UH. You also need to have a very very well thought out strategy that would handle contingencies in terms of your opponents and what happened. But you have to be able

to simplify that strategy in order to execute. So when football, you's only about eleven people functioning at once with zero error. H. Well, in the business world, there are a lot of firms I think that don't maximize their potential because it sounds like a grand deal of strategy but it's not simplified

enough to really truly be able to execute. So if you take all those things together, um, and whether I was talking about football or whether I was talking about the business world, Uh, they would really be the same principles to these Actually, crycipals is the only thing that different Verry is the product. The product of football is very different from the product of finance, But the principles behind running a good business and successful business, being a

good leader and each are really the same. Huh. It makes a lot of sense to me. I recall that merger between day Tech Online and t D Waterhouse. I was on a trading desk um early in my career, and I have a vivid recollection of my former trading buddies when I had been By that time, I was already off the desk kind of freaking out about the merger. Tell us a little bit about who day Tech was while you were running t D Waterhouse and what that

experience was like going through a major merger. Okay, it was about two thousand and two, so I'd been there almost a year and we had gotten our at straight and Um, the first deal we did actually was a national discount broker and they were owned by Deutsche Bank, and we paid a hundred and fifty four millions to them, but we had no cash, so we had to do it in stock when we were worth about seven hundred millions, and if we had not gotten that deal done right,

we would have gone out of business. And um with the day Tech deal, we were we were losing money. They were making money. They were by far our biggest competitor. They were taking market share from us, and uh, frankly, they would when they wanted to do something strategic, and they put together the memo of details associated with trying to do something like that. We didn't even get that, and they weren't interested in doing something with us. So

I figured out who the who the leaders were. They were owned by private equity, the three dominant ones with t A and Bain and Civil Age, and I actually flew to Boston and that you know, a private room with Steve Pauka the Bain, and we kind of worked things out a little bit on the back of a napkin. The next day I met with their board and then shortly there I met with our guys and then eventually we figured it out. But again once again we didn't have any cash, so we had to do it for stock.

So this was a fifty fifty deal. So we paid one billion one fifty for them when we were worth a billion one fifty and again we screwed that deal up. We are gone. We were out of business. But we did had a home run with n Debate and we had a homelown with day Tech and we were delivered above and beyond with anybody, so it we would right. So after the merger, you're now the biggest online trading

firm at least if we're going by daily volume. What are the challenges of running a big technology company essentially in that space? Well, while when I got to a Merriort Trade, while you know, we were really struggling and from a financial perspective, one thing that that I thought, uh, merrit Trade did very well in the nineties was when they went public, they took a lot of that money they poured into marketing and they poured it into technology.

So I was aware of that before I took the job, so it said me, eat, I don't frankly, I didn't know much about online brokerage. I didn't know much about technology. But there's nothing new in that, but I knew how to run the business and I had people around me that all new all those things. So I think with regard a technology, I think you've got to be aware

of that. You've got to be religious with your fervor in terms of making sure that you're staying on top of how can we break down what the contingent plan, what's going to happen. There's a lot going on. How are we going to be able to do that? And you know, we needed to write people in leadership roles and we needed to make sure that we knew it was a real commitment our manager's part and as they said, we really wanted to financial serf. We were really a

technology firm and financial service wrapper. And as long as you've got your priority straight, that certainly helped us out significantly over time. So given that you aren't an asset management shop, you aren't charging fees based on a U M S. What what did the revenue break down look like? You know, in between the dot com collapse and the financial crisis that it's about is modern and era of online trading that's separate from from today's ear as I

can imagine what were the revenue sources. Was it strictly execution and trading were and some margin loan lending or was were there other lines of revenue? Well, there are basically three ways that I think a broke it firm to make money with regards to at least with regards to its trading. The first of the commissions you're charging in and the second one would be the way you manage your assets, which are the client assets on the ballancing. You know, what do you do with those assets? Do

you invest? How do you handle that? That became a big issue in two thousand and eight, of course that's secondly, and then the third way to payment fraud the flow. So there'd be the three ways in effect that you can make money back then. Back then, though, the dominant, the dominant um our, dominant revenue stream was for trading and our commissions. Now in your mind when you're running

this company and trading is sixty. I remember before the SWAB t D merge, and we'll talk about that later, I remember reading that it was something like fifty revenue a t D was trading was a much smaller percentage of SCHWAB, so it became easier for them to drop the cost structure. But in your wildest imagination, did you ever suppose there would be a time when trading would

become free? Well, you know, I think the I think in Chuck Schwab's book, he actually I think predicted, you know, back in the early nineties or at some point in time that you know it might be it might be free. But I think from a business perspective I talked earlier about you have to have a thoughtful strategy that handles contituencies down the road, problems, issues that pop up. Well,

there was no question. You just look at the history that you know, the uh fees commissions were being squeezed and squeezed and squeezed, and they were just going to continue to go down. So we always believe that there was a shot that one day that made the zero commissions, and we better be prepared for that. But we didn't want to waste all of our time on that because we really had businesses we gotta run. But probably i'd say pretty much every board meeting there was some discussion.

Almost every board meet there's some discussion about like what's going to happen if we want to commission want to go into zero and um, and then eventually, of course, kind of we got to zero. I think we got there faster than anybody anticipated when Schwab decided that to cut commissions to zero. But but but well, there was always that. We always thought that that was that possibility. In my head, if I had to guess, I would have guessed probably that would have happened about two thousand.

So I'm trying to think back to what it was like then, and I'm only imagining these board meetings. At what point do you look at margin pressures and say, we have to continue to get bigger, we have to continue to get more efficient, and we have to be the best user of technology of anyone. Otherwise are businesses at risk? I think from the very beginning that was

the principle. And I think that also the reason. Part of the reason why I thought it was so important to leave the consolidation in the industry was because you wanted scale. But I think the best answer to zero commissions is a real quality asset base. So the focus on being able to gather assets also became very, very important to us. So the consolidation helped us, help help us with synergies, helped us with scale, help only helped our profit margins allowed us to grow market share. When

we purchased data. We Meritrade bought TD Waterhouse from TV Group and that's one became TD and meritratee. But they also were big in the r I a business, and that was a business I really want to be in as well, because I thought that that allowed us to go after the more serious, longer term investor. And uh so you're you're spreading your risk out over the different types of investors that actually out there, not just the trader or the active trader, but also the long term investor.

And you're gathering assets while while we go. So when we did, you know, when when we announced the Schwab deal, I think we're at about one point five trillion in assets. You know when I began that, we had twenty four billion in assets. So making sure your technology was top notch, always testing it, making sure you continue to prioritize where you're where you're going to invest capital, and the consolidation

growing assets. Uh it was all part of the plan, and you know it was it was very very effective, quite quite fascinating. So let's talk a little bit about this business of free trading. And I have to start um with the obvious question, Hey, I learned in economics there's no such thing as a free lunch. Is free trading really free? Or are there costs that we're just not aware of as as traders. I think you've got to look at that from two perspectives. First, do it

from the perspective of the trader. Uh. So, everything is pretty simple. You go to your website, boom boom boom, You put in the trade and gets executed almost always instaneously, and you get you get you have to get the best execution at that moment in time of the marketplace, and all the time you actually get, uh, you get price improvement. Right, that's what you see a front and

that course you zero. Now look at the back end behind that, you've got the zillion dollars worth of infrastructure, technology, regulatory, many many, many different things that need to take place. So when you do the trade, it goes through the broker right to the market maker. The market maker in effect has a spread. They have to give the client

the best, the best execution. At that time. You decide as the broker how much price improvement you want to give them, and then you keep the rest in robes of prayment porta flows. So the way you pay for this is through the payment porta flow. So on the front end, the client really does get excellent execution and here or she is pay getting it for. But at the back end, this tremendous expense involved as well as UH complexity, and that gets taken care of by payment

wort flow. So to simplify that, back in the days when it was eight dollar trades or ten dollars or fifteen, I think the last we saw it was about seven bucks the trade. There wasn't that necessarily that payment for order flow. Were traders getting better execution less spread going to the market maker back when trades had a fee attached to them. From the time I showed up at a merry trade, you know, the number one priorities make

sure we take care of our clients. So it was always a commitment to make sure that they got uh the best execution. Now, when you were making money back then, I'm sorry, when you were when you were charging fees back then, you did. You got both. You've got the commission as well as the spread payment porter flow. But the client was still getting best execution, but they were paying eight dollars or five dollars or seven dollars or

whatever that was. Now keep the mind to bury back then, you know, technology was not as good as it is twenty years later when mission went to zero. But it was good, but not the way it is today. And obviously technology improves a mystically from one year to the next, certainly from every two or three years to the next two or three years. So so you had that going on. But with regard to that, the individual investor still would

get price improvement. So when I stepped down, when we by the time we closed our deal on the we on the payment porter flow piece that we were able to control the we gave price improvement on a ratio three and a half to one, So the client benefited three and a half to one times what we would have benefited from it. So this raises the question our

custodians able to make up the lost revenue? Are they getting it from somewhere or is this just becoming an increasingly low margin business When when we look at a shop like Schwab, I think the number I saw when they announced the t D deal was that of the revenue came from the float, from the money they made on cast sending around overnight. Right. So so the way the way you make money, you can make money by your commissions and they go away, then you have to

pay moreford fold. But then you have your asset base and the ability of any broker, firm or bank to re to take those assets and reinvest those is another way for to to generate incremental revenue for that particular firm or bank. Uh. Now, I think I think when you when you look at that situation specifically, uh, you

also start to recognize them as as interest rates. With higher interest rates, you know you can you can you can take advantage of the yield curve there where you might be paying one to the client going three years back now, but you might be able to make three or four or five pc in the case of a bank, maybe doing a mortgage in the case of US investing

in fixed income type securities. But you would You've got to manage that because is your ballacy and you still of course of the liability to to to your client base. But they're the different ways you make money. I would like that one more point that's off trading. So keep in mind that that you want to be able to

diversify from treating as much as you reasonably can. So therefore the growing of the assets, the use of the ira A, the R, the use of of robot type portfolios and different asset allocation tools and risk measment tools help you do that help you be able to diversify. Maybe getting involved more with Criticum is another way to be able to diversify. So you want to be able

to to diversify your revenue stream away from trading. But with regard to the trading, you still make money to pay more for the flow as well as what you do with the assets. When you have very low interest rates as we do today and have for a while, that's more difficult to do. Huh. So what do you think of apps like robin Hood that have gamified the concept of trade aiding, especially for young inexperienced UM people who are you know, board stuck at home and and

robin Hood makes this kind of fun. Well, I think number one, I think it is great that we've got you know, younger people coming into the marketplace, even if they're coming in initiative day traders. I think because those people are so acquired and so connected and have played games themselves, but are certainly incredibly efficient with regard to what they have got to technology. I think the idea of gamifying that was I think probably a pretty good

marketing tool. And uh, with the leadership that that the retail investor has, the day trader rather has seen from the Reddit and the asked Kevin's of the world, etcetera. Uh, you know, they've been able to put on some pretty significant, pretty significant trades. The concern that I have is that, so I give the retail investment lab credit for that, but the concern I have is that think back to

the nineties when the dot com bubble worst. It was significant day traders in the nineties, they went out of business at some point in time. We've had a pretty significant bull running here on eqtually is the last five years, the last two three years. You know, we've had some really good day trading going on. But at some point the market is going to turn and and I think it's it's behose the Robert Hoods of the world. A merrit trade does this, Schwab does this, now it schwab

Swab does this. Other firms that have been around a while do this. But you've got to do You've got to educate your client. So, for example, let's say you have a game stop trade on you know, you bought it a ten, and it goes to, well, should you have taken something over the table? No, We're gonna wait to two. It gets to it takes something on the table. I think you need to to help people understand how

to manage their risk win in those situations. Because of the markets really turned around and go the other way for a prolonged period of time, I would think that the fate of the day trader would be similar to what it was in the nineties. You know, that makes a lot of sense. The other question I wanted to ask you about online trading. I don't remember which CEO said this it It could have been Tim Buckley at Vanguard, But one of the questions um that have come up

has been about cybersecurity. How much should this be keeping the people running current trading shops up at night these days? How dangerous is the risk from hackers and others accessing accounts, and how much more work needs to be done to make sure that there's an increased level of cybersecurity for financial firms. Whatever the most is a firm can do, they probably have to increase that, So it's got to

be the number one priority. I know, when I was asked a lot of time than using the term that you just used to know what would really keep me up at night? And I knew we were doing a really good job with with executing our business plan, and I knew we're doing a great job with our operation with our people, etcetera, etcetera. But at the end of the day, we're doing everything we and to make sure our technologies fail through. But you know, you know that

nothing is perfect. And what happens if we get blindsided? What happens if we get a hacker. Now we we've got people who do nothing to try to hack into our system, so we can prevent hactors from hacking into our system. So this is not going away. And and and to me, Barry the single greatest risk in the world today's terrorism. And terrorism can come at you a number of different ways, not just by flying into a building.

But you know, they can have a bio you can have a biological attack, and you can have a chemical attack. You can have obviously a nuclear attacking, but you can also have a cyber attack. And the cyber attack is

the one that probably scares me the most. Uh So from the United States perspective in terms of just national defense, we have to we have to make this a number one priority in every business uh in our country and probably around the world that has a serious technology uh part of what they do, and I think that should probably everybody. You've got to be able to protect that and do everything. You can't stay ahead of the game. And if you don't do that, you're gonna fall behind,

and you can't afford to fall behind. Let's talk a little bit about your return to coaching. What made you decide to go back into football. When I stepped down to two thousand and eight as CEO, and that's one of the firm asked me to be chairman. Um we had had a return for our shareholders, and we outperformed every financial phone and the globe ben and in two thousand and eight when the world was bowling up, and that includes the financial crushis but when the world was

bowling up, we got it right. We didn't do any of the things everybody else then. And I said part of that because, as I mentioned, I grew up in the fixed income world and I pushed the envelope I'm always pushing it. I'm very very aggressive, but never to the point where you cross the line, and never to the point where you cross the lines to aggressively i e. With leverage, where you potentially put your institution at risk.

So we got it right. Uh So I sat down two thousand and eight, and I had been working pretty in my father's foot store since I was ten years old, and I was ready. It was ready to try to take a break. And um, but because we had done so well. Um, Frankly, I had never been in more demand in my career and there could have been some very very significant opportunities, but I didn't step down to take other opportunities. Um. And then I got a call from a group of alumni at Yale telling me that

the football job may be opening. It wouldn't be interested, And I remember literally I was in a hotel in Vermont, and I remember looking at my telephone and a pretty get back to my year and said, guys, I said, you know, I have a coach for over twenty years, and said, we know that, but we spent a lot of time looking at the skill sets that required of a head coach. We think you're not only had those skill sets, but you have better advantage of the people

don't have. And I said, there's only one problem. What's that? Well, I hard at thirt or five years of college football, nothing like this has ever happened. And uh, somebody like you is not going to be hired unless the assigned off from the president. And the typical president in academia may be very, very smart, but they're not risk takers. They're not risk reward people. But think about think about it.

And I really did, and I really did, and I spent the next six seven months to truly, truly, you know, examining my conscious there's something that I wanted to do, and uh, looking at the pros and the cons, and it hit me that number one, at this point in my life, while there are a lot of other things

I could do, what would I not get greatest? Would I not get greater satisfaction by going back to football, I'm really having an impact on helping Uh, six eighteen and twenty two year old boy really kind of growing up and becoming a man. And I didn't think I could do anything else that would give me greatest satisfaction.

That number two, when I think this was subconscious, I didn't acknowledge it out loud, but I do think it was subconscious in hindsight that when I left football, uh, to go to Wall Street when my career path was was on a great path, when my career was on it, when it was a great path, and um uh, I think without question that I got on my ami. I think, and I'm not done to Wall Street. I think I would have been a major college coach at you know, the biggest schools in the country. And I think I

would have been very successful doing that. And and and and maybe there was a piece of me that, you know, wanted to take a shot at that really interesting. So before I asked you how being a football coach prepared you for a career in finance, let me flip that question. How did running a big technology and finance company prepare you for your re entry into coaching? I think with regard to I think, I think in the business world, uh, we were always so aggressive and we're trying to This

is true. Also, the divisions are responsible for a Marl Lynch so aggressive and trying trying to do as much much as you can. To me, it wasn't so much the bottom line. It was maximizing your potential. So if you can earn a dollar and the street expect you to earn a dollar, and you come into dollar Pen, everybody's patting you on the back. But I would want my executive team to know was the dollar pen the most we could do or should we have done a dollar twenty uh and and so maximize you pretend so

is football or business? What was always a priority of mine. I certainly felt that showing in the business world. The second piece of it that that in order to do that, in order to have you know, thousands of people and you know multiple things going on, you had to absolutely make sure you had the right people around your period.

You had to make sure you the right people around you that brought into what you believe in the people that you count on a trust uh And you had to be willing to make tough decisions if that wasn't the case. I think you also then needed to be

able to definitely obviously delegate to those people. And again I said before, you need to have a sophisticated enough strategy to handle detension down the road, but simplify it so you can execute every one of those things varied were things that helped me become a better football coach. So my number one priority was higher the best possible people I can. They got to buy into my leadership philosophy, got a buy into what I'm doing that they don't.

They're not going to be part of the program going forward. And I am a world class delegator. And if you are running my offense or you're running a defense or whatever your particularly, I maybe I'm expecting you to do that and I'll do what I can to help you. Of course, during the game, certain decisions head coach gotta make, but I am counting on you to be able to do that very very similarly to what I did did

when I was on Wall Street. So so you have you can't micromanage, and you've got to have the right people in the place right that you delegate to. And then the frankly, you monitor progress. So here's a question that I guess is obvious, but I'm just thinking of it now. There's a twenty year gap between your two coaching stints. How has the game changed, How have the student athletes changed, How has the technology and the officiating changed.

How different it's college football today from back when you were a coach in the late seventies and eighties. So first of all, you know, they simple thing that they took the hashmah. They important to the middle a little bit, so you have in effect on wider field number one. Number of the game has certainly spent up. You know, very few people even huddle up today. Now we did that too, but that was that was a two minutes drill,

and we need to handle that bow offensively defensively. But the only time people really did that was whether in a two minutes drill. Now pretty much everybody does that. UM. I think that when you look at sets that existed there by by that I mean formations. UH typical offensive is very much spread out across the field. That wasn't

always the case back then. So the games faster, there's more, there was more uh combination, I think of passing and running, probably more passing, UM and the and the speed of the game. Now. I think today there's also more of an emphasis placed on schemes, whereas when I coached first time, he's probably more of an emphasis placed on fundamentals. So I think were we both and fundamentals is one of the things that I think we give us a competter advantage.

Now let's look at the player. So you've got you know, you're eighteen year old kid, who's who's Who's constantly connected because of technology, So there's more information coming at him or her than has ever been the case in the past. And I think because that tends to be a little bit more pressure perhaps to produce or how you interact

with your peers or whatever it might be. But so while the world has changed and everything is faster, and everybody's connected, and everybody's got you know, look playing a look at living at the phones all the time. The basic thing that makes up the human being a young boy, a young girl. Uh as you as you go through the beginning of adulthood, that hasn't changed at all. It hasn't changed at all. So I think about what it was like when I was growing up, it was like

when my children growing up. I think what my players were like the first time, and what players are like this time. And the concerned about preer pressure, the concerned about, you know, the issues associated with drugs or or sex or alcohol, the pressure potentially that might come from a parent or with the respective coaching, with respect of your teacher, or with your girlfriend or boyfriend or whomever it might be, that hasn't changed. So I think number one, you've got

to recognize that. And while the world's change around the basic human being, what makes us pick, what makes us stick inside? I think that was true fifty years ago the rats today. I think it's gonna be true fifty years from now. So there are two aspects to student athletics that I think have changed, and I want to get your opinion on the First is the athleticism of the players. It certainly feels like players today are faster, bigger, stronger.

Is that my imagination or our student athletes really in a level of competitive shape that's noticeably different than twenty five years ago? Right, you see that exactly right? And I think part of that is tremendous episodes, and of course in terms of strength training and and and and workouts and things like that at that frankly take place over the span of the entire year. So if you look at football, but this is true in other sports.

You know, our guys list at least twice a week, and the off season that becomes three or four times a week, perhaps five times a week, depending on what we have going on. So in the fact you're working out year round, that's number one. And the number two pieces you know, after twenty five years to look at mortality rates. You know, seventy five years ago, the TALI

rate may have been fifty. Today is eighty five. So there's also the also the element of evolution that has taken place, you know, the typical a little bit fast, a little bit stronger, a little bit larger, a little bit maybe a little bit smarter, all of those things

I think have taken place over time. And then the second issue that came up over the past couple of years is the concept of uh the n ci A and student athletes demanding control over their image, control over um, how how licensing is done with their names, and even

student athletes getting paid. What are your thoughts on this area? Well, being a business guy, you know, Barry, I certainly I think you've got to follow at the money and you've got to pay close attention to that and um uh so I think if you really understand money flow on how it works a lot of times it's not that you can not that your soothsayer or fortunate all, but

you kind of tell what's going to openly happen. And with regards to this, to preface it for a moment, when I went to college, I was married, I had a daughter. At every gamemond education, and we have guys so on the team only eighty five scholarships some means a forty guy a team that that do not get aid, and they treat exactly like the other guys, and they've got to work just as hard as the other guys,

and they're not getting money. So you would think them to be able to provide a student athlete with room board, books, tuition. You know, it's a pretty significant thing. But the TV contracts are so significant, are so significant today that the amount of money of Power five school makes from or a league from their conference, just in football alone is astronomical, far greater than let's say what the entire athletic butget

would be at Coastal Carolina. So so, with that amount of money, and look at coaches at the Par five level getting paid four or five, six, seven, eight, nine million dollars and the schools being able to get rid of a coach and not have a problem with a ten million dollar payout and hire another guy for six seven million dollars. A year. There's a lot of money there, and I would suggest that a lot of money is

actually being wasted. So for the student after you raised the hand and say, hey, I'm a tied up with some here. And I think the N double A could have been could have taken a far greater leadership role in this, but they didn't. And um uh so, so it's at the end of the day, I think, I think this is part of evolution, that we're moving in

this direction as student athletes. Uh. Now, I think the majority of the states, I think have already voted that, uh, you know, student athletes can get paid for the use of their image. Uh. And I don't necessarily disagree with any of that. So I think that's the way of the world. Think that's the way the dolls are going. Are there enough dollars go around so I can appreciate that happen. So it's gonna happen. Take a leadership role in it. Uh. The issue the concern that I have

is that this becomes easier to cheat. So we go back in the seventies, the sixties and the seventies, wasn't a comment to give give a player money. It wasn't common, but you know you're doing that an effort to be able to recruiter as certainly it happens in all sports, but probably especially basketball where you really only need one guy to really make a difference in the ultimate team. So but then then you show what happened SMU, you show it having a couple of other programs when when

when they got the death penalty. So the NT double A and COUG football has really been very very strict with that over time. Well, now, if individual players you can get paid on their own because they're using their image, or there's enough money to go around, and the student athlete is getting some of that. Um, I worry about how that gets controlled. I worry about I worry about whether or not teams And there's so much money involved.

As I pointed out a minute ago, so much money involved, there is even more of a propensity potentially to take advantage that. By that, I mean crossing your line and cheating. So I see, I see an uppick in that, which is a negative. But moving this direction I think is the way of the world. And I'd rather do with it and have a control on it than than you know, follow it along. Um. Since we're talking about getting paid for UM playing, let's talk about getting paid for coaching.

I read something fascinating in USA today. UM as part of the Coastal Carolina cutbacks, you agreed to forego your salary and accept a dollar just as a formality, making you arguably the best bargain in college athletics. How do you respond to that? I think even with my salary,

I was a pretty good bargain for college athletics. But I think at a dollar, at a dollar, that's a deal with with my with a dollar, I think, especially with my background and and why I take incredible, incredible pride pride in being a football coause I'm not just a football coach and UM with the university that I'm associated with, you know, whatever I can do to kind of participate in that or help, you know, I want

to be able to do so. So we were in the middle of a global pandemical course and a lot of people have sacrifice, and uh, you know, I thought it was only fair that he gave up my salary, and that also given your background in finance and management, it really raises the question what do you do for the college over and above? Just and I know it's

a full time job, but just being a coach. I kind of picture you as being able to pick up just about any sort of role and run again, not to mix metaphors, but run with the ball on just about anything you could possibly do for this cool well. I think one of the things that you know, I certainly had had a close it was Dave Descenzo, our previous president who just stepped down recently. Um that you know, he was the guy that, frankly, uh put his credibility

on the line by hiring me. So we always had a good relationship, and he and I would be relatively frequently and talk about different things he had going on. I would always have to give him my opinion. Um I was I was somewhat instrumental. And and uh the current president that we had that they just officially began in January, Uh, Michael Benson. And Uh. The guy has an incredible academic resume. Frankly that the best of anybody

we have on campus. He's your true scholar. He speaks multiple language, he plays multiple multiple instruments, but he's also an athlete himself. Is children roughly, and he very much understands and believes and appreciates the significant that athletics can take uh in uh in a university life. So my titles today have he stepped down in two thousand and eighteen.

My titles today are, I am executive advisor to the president, and he and I probably try to have dinner every couple of weeks to talk about what he's got going on. And again, he's new, so he's making a lot of changes and he all his decisions, but we'll talk about a lot of that. And then, yes, I'm sure of athletics, but the only thing, only responsibility I have in athletics

is football. So football does does report directly to me, and so there there M there might two roles, but I think uh President Benson especially will not hesitate to use me in different roles for example, maybe visit the board, talk about different things, etcetera. Uh So I'm happy for them to to to leverage whatever my experiences may be.

Before we get to our favorite questions that we ask all of our guests, I have a curveball I want to throw at you, and it's this quote from Roger's stare back, which is, it's unlikely that any other candidate has ever been as remarkably successful in two unrelated fields

of endeavor, football and finance. As Joe is in so so, tell us about your relationship with Roger Storeback, who, by the way, for listeners who may not be familiar with his history, not only was he a spectacular football player, but he also built an amazing commercial real estate business that was sold for I think half a billion dollars

like a giant winning transaction. Tell us a little bit about your relationship with Roger Stoback, you know, to add one point there that I think it's worth adding as well, Barry that you know he also played at the Naval Academy where he was hiding a trophy one. Then he went on to serve our country as he graduate Naval Academy, so he missed about four seasons or so as as a pro football players still had and still had the

career he had. So when I decided that I want to go back to football, I recognized that I wanted to be able to reach out to as many people as were practical that I thought maybe could give me some insight. And one of those people was Roger now one of my friends from all hot Uh former Admiral of Bob Bell. He went to the Naval Academy around around the same time that Roger did, and you know, they were friends. So he made that introduction and I went down to Dallas to meet with him, and he

became friends. Wasn't uncommon for us to have dinner, a breakfast if I were in town, and he never hesitated, you know, to to to talk to me if I reached out for something. So so so that so that ability for me to just have access to him by itself was I think, really really terrific. And as you pointed out, he's the one guy too that had not as a coach. He was a player that there's a difference there, but certainly understand the world of football, whether

it's collegiate or pro. And that certainly understand the world of business because he was in credibly successful there as well. So he was a very very bright guy, as you would expect. So he was a wonderful resource for me, for me to be able to reach out to really really quite interesting. All right, So let's jump to our favorite questions that we ask all our guests, starting with um, given the fact that you're no longer coaching and have a little more free time these days, tell us what

you're streaming? What are you what were you watching to keep yourself busy? Uh? During the pandemic and and the work from home year. Well, I think a lot of people think, just because a football coach, I'm a crazy football fan, but I'm not. And I look, you know, I used to look at thirty five hours of tape when I go home. I don't want to watch football. So I would enjoy I would enjoy a movie. I would enjoy some of the episodes that they had on Netflix.

I mean, whether it's uh Billions, Ray Donovan, uh, House of Cards, uh, the uh Uh, they're a handful of those that I think they're really really, really well done that I enjoy because their episodes, you know, I'm not stuck to two and a half hours having to watch That's number one. The other thing that in terms of podcast, the one that actually I do really enjoy is Compound and that's the one you know with that Josh Brown runs, and I think I follow that. I think they've done

a good job. And I think if I'm not if I'm not mistaken, they're going to add a Compound and friends things, which I don't think it's started yet, but I've gotten a lot of value out of enjoyment out of all those. So by the time this broadcast that will have started. And uh, if you'd like to be a guest on Compound and Friends, I would be happy to twist Josh's arm and have you show up on that podcast. I would enjoy that. Verry, I would enjoy that. I have a lot of respect for him as well.

So now let's talk a little bit about some mentors. Who were the people who helped shape your career. You know, I think you could talk about you know, there are as a coach, for example, I read everything that was to read about Vince Lambardi and John Wooden because they were both very successful but both are very very opposite. In the business world, War and Buffy Got Lee, I Coco,

You've got you. There are so many people there, but the people that really change shaped my career, uh, especially as a leader and as as a person, but in the in the in football and business. For my parents, and my dad was an Italian immigrant. He came here when he was eleven and never finished eighth grade. Uh So bananas and apples and the bronchs entire life. But dad that my mom he met my mom after World War Two. She kicked in Ireland, she came over here

to marry it. Uh. She never finished tenth grade. I was the oldest of five. The seven of us grew up in At the time of that Instry section of New York City was very much a gang area. I was part of that and we lived seven of us lived in the two bedroom in broom department. And from my mom, she was had such an incredible attitude, always with a smile on her face, unconditionally loved us, you know, always had uh the glass was always half full, you know,

enjoyed lasting but truly truly loved us. And I think very much I get my sense of humor and a lot of my personality think from my mom. On my dad's side, Dad was committed to make sure it's a care of his family, who were very hard in that food store with you know, was a verst to stays a week and I learned, I learned the how how important to real work ethic was. And again make sure you think terry family. The difference with leard of my

dad and maybe three people working for him. And Dad never had a hobby and most time he's burnt out and later on in life he wanted to become an alcoholic and uh, but I could tell just the way he treated his guys and treated me. There was always I felt kind of a better way to do something like he was always in a bad mood. It was never his fault. The glasses always half empty and um, and I think he could have been a beat jobly

delegate and have the other guys who work. And in terms of being a leader, and I mentioned before my ability to delegate and how I run things and how I lead, A lot of that that I learned was from my father in terms of what not to do. So I think the two greatest influencers on my life were literally my MoMA, my mama my dad. Huh really really quite interesting. Let's let's talk a little bit about books. What are some of your favorites and what are you

reading currently? The the uh, probably my best most favorite book is The Gold Coast, uh, probably written about thirty years ago by Nelson the Mill, Uh about as the Gold Coast meaning Long Island, and it's about the guy I think he was, Stevie Bella Rosa, who was the mafia guy that I think came in and buy one of these estates on Long Island for making up the numbers of like sixteen billion dollars and he brings it back in cash to that and I thought it was

a fun book exactly, and I actually read it twice because I enjoyed it that much. Then the other the book book that I just finished, and I just thought another one who was Walking with Ghosts by Gabriel Byrne, and it's his memoirs and he's really a very very very I've always respected him as an actor, but he's really a very very clever writer, and I've gotten a lot of joy out of that. And then when i'm reading right now is Brock, you know, the one by Obama.

And this is a long one and I'm only about a hundred thirty pages into it, but some of it is really enjoyable. So I gets a little bit too much detail. I skipped over a little bit, but that's what I'm reading now, That's what I just finished. And the other one my favorite book. So well, there are a variety of different Barack Obama books. This is I'm assuming is whatever the most recent one is. You know, it's either Barack or it's Obama. It's just one word

title and it's his name. So our final two questions, what sort of advice would you give to a recent college grad who was interested in a career in either college athletics or finance. Now, I think one of my principles of leadership is uh I call spiritual soundence. It

doesn't have to be religious, but it can be. But it's I think most people don't really know who they are, and um, I think you become a compositive like who I am relative to my mother, my father, my girlfriend, my wife, my my job, what kind of executive am I? What kind of coach and my what kind of friend of my etcetera, etcetera. And if you sit down you write that down. I just keep writing, writing, writing about yourself, and you step away from and come back to it later.

You're probably gonna change things things you wrote down. But the one guidelines you can never show it to anybody, because the second you show to somebody, you sub constantly actually looking at their approval. So in order to be happy, I think you need to know who you are because you're gonna have to make decisions under stress. And the better you know who you are, the great the probability you will make the right decisions. Now, one of those and the most one of the most important by far,

is your career path. So, if you know who you are, what kind of skill sets do you really have? What are the skill sets required whether it's coaching or athletics or business or whatever the field might be, what the what the skill sets required for success in that field? Do you have those skill sets? If you don't, do not go down that path. If you do, you still have to ask yourself one other thing, and that is

is this something you really love? The answers there is yes, and chances are you've done a good job of picking the right career path. So it's kind of irrelevant whether it's finance or trading or investing or football. It's kind of like what we're for you, not because this is something you thought about, not because this is what your dad did or somebody who admire does. Uh, it's kind of what really works for you. And I think we would have a happier society if more people spent more

time taking that through. To say the very least, and our final question, what do you know about the world of investing and trading and football today? That you wish you knew years ago. I think I think thirty years ago.

From a football perspective, I think it would have been great to have the scheme knowledge that exists today, the ability really kind of go after, spread out the field, take advantage not just the triple option that Oklahoma and Nebraski used to run, but true option, attack, run, passed, and do different things in effect. From an offensive perspective,

I think that would have been great. I think for me to have back then and from from with regard with regard to the business world, I think I think, really the principles that I build on today, what are your core competencies. You gotta make sure you take care of your people. Uh, what really matters your clients, you shareholders, and your associates. Because it's your employees. They give value each of those constituents, you know. The For me, while

the world's changed, I just growing with the world. I've just adapted. I do a good job of adapting, adjusting and adapted just with the world. But the principles I believe in so much today that I'm really good at because of the experience that I've been able to late That's kind of how I started out, and they were

the saying principles I believed in. You know, thirty years ago, I wish I were more experienced, because with that experience comes knowledge, and with that knowledge comes wisdom, so you can make better decisions for yourself and for your people, for your family. So UH be the same, so that that would be what I wish I had thirty years ago. Really quite quite fascinating. Joe, Thank you for being so

generous with your time. We have been speaking with Joe Mowglia, who is not only formally a head coach at several esteemed college football teams, but is also the former chairman and CEO at trading giant T Dumeritrade. If you enjoy this conversation, well check out any of the other nearly four hundred such interviews we've had on Masters in Business. You can find that at all the usual places, iTunes, Spotify,

wherever you get your podcasts. We love your comments, feedback in suggestions right to us at m IB podcast at Bloomberg dot net. Sign up for my daily reads at rid Haltz dot com. Check out my weekly column on Bloomberg at Bloomberg dot com. Slash Opinion follow me on Twitter at rit Halts. I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Tim Harrow is my audio engineer,

Michael Batnick is my head of research. Atika val Brunn is our project manager, and my producers are Michael Boyle and Parris Wald. I'm Barrier Halts. You've been listening to Matthew's In Business on Bloomberg Radio