Investment Lessons from Coach Nick Saban

Alabama's Crimson Tide won the 2013 BCS championship on Monday January 7th -- their third one in the last four years. Alabama defeated the Fighting Irish of Notre Dame 42-14. Since joining Alabama in 2007,  Nick Saban has revived the football program and led it to new heights. You may be wondering what separates Nick Saban from his peers? Also, are there lessons to be learned from him that can be applied to Buy & Hold investing.

Focus on the Process

Coach Saban has gotten his execution down to a "process" that gets repeated consistently year in and year out. He has a detailed program for his players to follow. It starts with defining expectations for his players athletically, academically, and personally, always following through. Saban insists on knowing what players are doing in their workouts down to the specific lift and weight. This process involves perfecting the little things you do every day and repeating them consistently. The focus is on breaking down bigger goals into smaller tasks and execute on them consistently. The keyword here is consistency.

Buy & Hold investing is similar to the above process in that it is rooted in the consistency of buying funds at regular frequency AND holding them for the long-term. It is the "consistent execution" that matters, rather than changing courses at a whim, which tends to happen when you are an active trader.

Hire/Recruit the Right People

Coach Saban hires great team of assistant coaches and teaches them executing on the process. He has recruited nation's best high school players and turned them into first-round draft picks -- eight of them in the last two years alone.

With a Buy & Hold investing, you buy high-quality, low cost, index funds. You diversify them based on your risk and retirement profile. Once you bought your initial investments, you simply keep on buying and holding those funds.

Be Relentless

With SEC being a tough conference, there is not much room for error. Coach Saban brings out the same amount of energy and passion at each and every game. Also, players are asked to focus on the the full sixty minutes of the game rather than on the scoreboard.

Buy & Hold investing is similar because the focus is always on the long-term execution and keeping it going through the good economic times as well as recessions. It is very hard to keep pursuing relentlessness during hard times, but that is what separates good investors from bad ones.