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The Warren Buffett of the National Football League

By John Maxfield - Feb 8, 2017 at 1:45PM

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The most decorated coach in the NFL has a lot in common with the world's greatest investor.

The coach of the New England Patriots, Bill Belichick, has created a dynasty in an era when doing so shouldn't be possible.

The National Football League has gone out of its way to prevent this from happening. Not because it doesn't like Belichick -- the league's efforts have nothing to do with the 64-year-old coach -- but because the NFL wants to promote competitive parity. It isn't good for business if one team wins all the time. It's better to spread the love around. The league wants fans everywhere to truly believe that their team can win "on any given Sunday."

This is why the Super Bowl champion gets the last pick in the following year's draft. It's why there's a salary cap, to stop major market teams from dominating their smaller-market counterparts. It's why teams share revenue from advertising, merchandise, and ticket sales. And it explains why the league adopted free agency, to enable poor-performing teams to poach players from high-performing teams.

New England Patriots coach Bill Belichick.

New England Patriots coach Bill Belichick. Image source: WEBN Boston.

These hurdles have kept every other team at bay, but they've wholly failed to impede the dominance of the Patriots. Last Sunday, the team won its fifth Super Bowl since Belichick became its coach in 2000. That gives him more Super Bowl wins than any head coach in NFL history (and that doesn't include the two he won as an assistant coach of the New York Giants).

How Belichick accomplished this isn't just relevant to sports fans. It's relevant to anyone who seeks excellence in anything. To anyone who strives to be the best at what they do. And it's especially pertinent to those of us who invest in the stock market, an equally competitive arena where it can seem all but impossible to carve out an edge.

Belichick's edge

Belichick's edge can be traced to the unique circumstances of his childhood, growing up as the son of one of the most respected college football coaches in an era before professional football took off. His father was "by all accounts a brilliant coach, an exceptional teacher, and arguably the best and most professional scout of his era," writes the late historian David Halberstam in The Education of a Coach. "No one, it was said, could scout another team and break down their film quite like Steve Belichick."

In this way, the younger Belichick benefited from the same advantage that propelled the successful entrepreneurs discussed in Malcolm Gladwell's Outliers: The Story of Success. The high school that Bill Gates attended had a computer well before most colleges did, allowing Gates to rack up thousands of hours' worth of programming experience before anyone else in his generation. Steve Jobs, the founder of Apple, grew up in a neighborhood teeming with engineers from Hewlett-Packard. "Their success was not just of their own making," writes Gladwell. "It was a product of the world in which they grew up."

But Belichick's accomplishments aren't merely the result of genetics. He was obsessed with football for as long as anyone who knew him can remember. He started hanging around at his dad's practices at the age of six. He learned how to break down film at age nine. Three-and-a-half decades after he graduated from high school, his mother stumbled upon one of his French notebooks. Instead of being filled with French grammar and vocabulary, it was full of diagrams of football plays. "His determination to reach the pinnacle was nothing less than a lifelong pursuit," writes Halberstam.

Belichick was also a hard worker. "You gave him an assignment, and he disappeared into a room and you didn't see him again until it was done, and then he wanted to do more," one of his early mentors told Halberstam. Even in the NFL, where hard work is common, Belichick was unique. "He was someone who simply was not going to be denied," a former colleague observed.

The opposing teams helmets of Super Bowl LI.

The Atlanta Falcons faced the New England Patriots in Super Bowl LI. Image source: WEBN Boston.

Just as importantly, when Belichick began to gain fame and attract notoriety, he eschewed the trappings and distractions of success. He shut out the noise and focused only on the signal, to use Nate Silver's description from The Signal and the Noise. Belichick has always driven unpretentious cars, avoided celebrities, and dressed simply. And far from embracing the media, he's shown a wariness toward it. "He was completely dedicated to fighting off the virus caused by too much ego, all too aware of what it could do to his dominating purpose -- playing championship-level team football," writes Halberstam. It's not that Belichick doesn't have an ego, Halberstam continued, it's that he learned how to make it work for him and to keep it from being a negative force.

Belichick has always been a compulsive learner as well. "One of the things I had working for me was that I knew how to learn," he told Halberstam. The importance of this can't be overstated. In his book Superforecasting, Phillip Tetlock, a leading expert on forecasting, identifies what he calls "perpetual beta" as the single most important trait shared by the world's most accurate forecasters. This is "the degree to which one is committed to belief updating and self-improvement," Tetlock writes. "It is roughly three times as powerful a predictor [of one's ability to outperform other forecasters] as its closest rival, intelligence."

But perhaps nothing can explain Belichick's success in the face of enormous odds better than his obsession with preparation. "If you give him too much time to coach before a game, he'll kill you," said a colleague who worked with Belichick in the mid-1970s. "If he has a full week before a game, your chances are slim, and if he has two weeks, like they usually do in the Super Bowl... there's no chance against him." This fuels the confidence of his teams. It enables Belichick to quickly tease out opposing teams' strategies and plays. And by doing so, it allows his teams to be proactive, not reactive, in the heat of battle.

Temperament over intelligence

The finished product of Belichick's knowledge and obsession with preparation is the steely disposition he evinces on the sideline. A calmness in the midst of pressure and pandemonium. A coolness of mind that empowers him to act rationally when opposing coaches are succumbing to the irrationality of emotions. As Halberstam recounts:

That totality of his knowledge, the great depth of it, would manifest itself, [a longtime friend and colleague Ernie Adams] came to believe, in his being so good a game coach; he excelled not just in preparation before a game, but also while the game was actually going on. He was much more analytical than most other coaches, and he never lost that analytical ability, not even in the most tense moments of a game. ... With the game on the line and thousands of people screaming away, often in hostile venues, Belichick did not lose his cool; he could always somehow manage to step back and take a cold look at what the other team was doing and what his own team had tried, and then figure out what he needed to do in terms of instant adjustments. That, Adams believed, became a kind of Belichick trademark: the ability to adapt his game plan even as the game was being played out, and not to be sucked in by the emotions of it.

To circle back to my purpose in writing this, in turn, it's these very same traits that lead to success in investing. It's why Buffett says that temperament is more important than intelligence. The key to investing is honing the ability to make rational decisions under acute pressure. Buying when everyone else is selling. Being greedy when others are fearful. And the way to cultivate this ability is to accumulate knowledge and prepare obsessively. In this way, Buffett and Belichick have traveled indistinguishable routes to the top of their professions. It's why I think of Belichick as the Warren Buffett of the National Football League.

John Maxfield has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool has a disclosure policy.

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