Hiring the next Nick Saban

• Nick Saban
• Dabo Sweeney

These are the only active football coaches who have won multiple national championships.  When Alabama hired Nick Saban, there were only two active college football coaches with multiple national championships:  Bobby Bowden and Pete Carroll.  Bowden was two years away from retirement and Carroll was becoming mired in scandal.

How many active college football coaches have won a single national championship?  Four

• Ed Orgeron
• Jimbo Fisher
• Les Miles
• Mack Brown

And how many FBS teams are eligible to win a championship at the beginning of each year?  130

It is really hard to choose a coach that will win a national championship.

Choosing the best stock each year is just as hard.  No one expected Tesla to be up 645% YTD (as of Dec 17,2020).  At the bottom of the market in March, no one expected Tesla to outperform Amazon by 569% when we were all heading into lockdown. 

That just does not make sense.

Picking individual winners is as difficult as choosing a great football coach.

Who knew that Zoom Technologies (ZOOM) would be mistaken for Zoom Video Communications (ZM – our true communications partner in COVID). 

And the wrong Zoom would rise in price so much earlier this year that trading was suspended and they changed their ticker symbol.

There are a lot of great football coaches and a lot of great companies to invest in.  Knowing beforehand who will rise to the top is extremely difficult. 

There is an element of luck involved in these situations that is impossible to assess.  Most who benefit from this luck are not willing to admit their good fortune.

A diversified investment portfolio allows you to hold the surprise winners.  As well as the surprise losers. 

Typically, only a small subset of companies drive the bulk of portfolio gains.  You do not want to miss out on those winners.