The Most Invaluable Lesson We Learned From Peyton Manning and Warren Buffett

Peyton Manning had a performance for the ages against the New England Patriots. But what can his quarterback play teach you about investing in great businesses?

Jan 26, 2014 at 1:18PM
Peyton Bufftt

Source: Jeffrey Beall.

Who doesn't love watching a master of his craft do his thing on the biggest stage?

Watching Peyton Manning carve up the New England defense reminded me of MJ in his prime driving to the basket and hungry to take the big shot. Or, Buffet buying companies.

There's always something to be learned from these virtuosos.

The art and science of being great at something, whether it's football or investing, involves transferrable skills. It's part talent (what you're born with) and part busting your ass (what you do with it). And does anybody question how hard Manning has worked and how focused he's been in pursuit of his profession, being an NFL quarterback?

I'll have to admit, I was never much of a Manning fan when he played college ball. In fact, as University of Georgia alum, I hated him.

Respecting greatness
But if you value hard work, putting in the hours, and becoming the best at what you do, you've got to love this guy. He works as hard now as he ever did, and he makes those around him better. Just ask the Denver Broncos wide receiving corps.

In the midst of many brash talking, show-me-the-money, resting-on-your-laurels players in the NFL, it's nice to find a guy who gets it. He made the most of his college experience for four years, got drafted No. 1, played like a champion at Indy, faced a career-threatening injury, worked his way back, was let go by the team he loved and played for his whole career, kept working, got beat by a "Hail Mary" pass in last year's playoffs, had a historic year in 2013, and now gets to the Super Bowl by going 32 for 43, with 400 yards, two touchdowns, and no picks.

Hello, greatness!

Learning from greatness
And that talent and work ethic is how many great companies operate. So when you buy investments, buy companies, not just great short-term numbers or hype.

Here's a great lesson from Manning that applies to businesses and investments: Sometimes No. 1 draft picks and market leaders do outperform everybody else.

Yes, Manning was drafted No. 1. So were JaMarcus Russell, David Carr, and Tim Couch. But here's the point. He's still No. 1, the best quarterback in the NFL, and he's 37 years old. That's 15 years less one, when he was out with the neck injury.

High-performing stocks
So, which stocks have performed as well as Manning over the long haul? Fellow Fool contributor John Maxfield wrote an article in September of 2013, which ranked the top three performers since 1980 based on compound annual growth rate (CAGR). Some of these may surprise you.

  • Eaton Vance: 25.2%
  • The Gap: (Old Navy, Banana Republic) 24%
  • L Brands: (Victoria's Secret, Bath and Body Works) 22.9%

Of course, Wal-Mart (NYSE:WMT) and Berkshire Hathaway (NYSE:BRK-A) also made the high-performance list at sixth and 15th, respectively.

Great businesses, like great quarterbacks, don't perform well for a just a few years, but for their entire careers. So in a sense, Eaton Vance has been the Peyton Manning of the investment world since 1980.

A better comparison
No, actually the comparison is more apt for Wal-Mart or Berkshire, since we expected those companies to be on the list, and they were. Just like Manning, picked No. 1, who remains -- 16 years later -- the best quarterback in the League.

The best signal caller in the investing world, Warren Buffett, the "Oracle of Omaha," has been on the top of his game for 50-plus years at Berkshire.

So when you consider investments, think in terms of whole careers, decades and multi-year periods. Don't get so focused on the "next big thing" or the "one-year wonders" that you miss the proven winners, like Wal-Mart and Berkshire, that do it year-in and year-out, decade after decade.

Buffett's secrets revealed
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Fool contributor Chris Brantley has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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