When Frieder Talks, Coaches Listen

It’s hard to believe Lute Olson would take investment advice from Bill Frieder.

Olson is the silver-haired basketball coach at the University of Arizona whose reserved demeanor creates an air of distinction. Frieder is disheveled on a good day.

Olson took his team to an NCAA championship in 1997. Frieder resigned as coach at rival Arizona State University prior to the start of last season after a point-shaving scandal involving former players.

Still, when Frieder telephones with an investment tip, Olson always takes the call. Frieder, it turns out, is nothing like his rumpled image. He’s a miniature master of the universe.

With his brother Larry, Frieder runs a multimillion dollar investment business that includes everything from owning banks to amassing large stakes in such companies as Intel Corp. and Ford Motor Co.

“He’s had some advice for me over the years, and if it had to do with business, I listened,” said Olson, whose friendship with Frieder stretches back to when Olson coached Iowa and Frieder was at Michigan. “If it had to do with basketball, I ignored it.”

These days, Frieder still dabbles in basketball--he runs camps for NBA stars Jason Kidd and Charles Barkley, helps with others and is a color commentator for West Coast games on Fox Sports Net. But the 56-year-old ex-coach is more likely to talk about interest rates and the Dow Jones Industrial Average than he is three-pointers and match-up zone defenses.

As president of Frieder Bros., he runs a business that had a 41 percent profit return in 1997. That easily outpaced the 32 percent return of the Standard & Poor’s 500 Index.

“It beat people like George Soros and Leon Cooperman on Wall Street,” said Larry Frieder, a finance professor at Florida A&M; University, and Bill Frieder’s partner and younger brother.

This year’s market turmoil will mean lower returns, he said, because Frieder Bros. concentrates heavily on financial and banking stocks which have been battered because of economic turmoil in Asian and U.S. markets.

They’ve still had some success this year: They bought Ford at 38, and it rose to about 56; and the company’s investment in Bank One Corp. has gained 42 percent in recent months. They also bet against Boston Chicken Inc., in an investment practice known as shorting, before the food chain filed for bankruptcy protection.

“You have to have the courage to buy when the market is low, and buy when there’s bad news,” Bill Frieder said in a recent interview with Bloomberg News.

As an investment firm, Frieder Bros. isn’t a run-of-the-mill mutual fund. It’s geared towards wealthy investors and members of the Frieder family. “You couldn’t get in,” Frieder told a reporter.

Another group of investors comes from college coaches --most of whom have seen their pay packages skyrocket in the past decade. Arizona’s Olson, for example, will earn $528,955 in base salary this year, and that doesn’t take into account a lucrative shoe contract and a summer camp.

“A camp gets over and a coach has made $300,000, and now he’s got some money to spend,” Frieder said. “When you work 16 to 18 hours a day, you don’t have time for anything except basketball.”

The brothers won’t go into great detail about their investments, though they acknowledge that it’s not uncommon to move millions of dollars around at a time. One favorite strategy is the acquisition of small, undervalued banks, such as the Gateway American Bank of Fort Lauderdale, Florida, with the idea that it can be later sold for a profit.

Watching his older brother invest is a lot like watching him coach, said Larry Frieder, who co-wrote the business bestseller “Bottomline Banking” with Bank One Chairman John McCoy.

“Good coaches play a lot of angles, and Bill was one of those,” he said. Likewise, investing is “based on shrewd calculations and playing the percentages. You have to know when to fold just like you have to know when to take a player out of the game.”

Bill Frieder’s interest in finance stretches back to the his youth when as the eldest of two boys he helped run his family’s produce business.

“If you bought strawberries on Friday and they weren’t sold on Saturday, they were going to be thrown in the garbage,” he said. “You had to learn how to get out and sell. And what is recruiting? You have to learn how to sell.”

While he pursued a coaching career that would lead to Michigan and then ASU, he earned a master’s degree in business administration from Michigan. He also earned a reputation as an eccentric even as he compiled a 313-175 record in 16 years.

His wardrobe often consisted of sweat pants and once said he had never heard of the “Wizard of Oz.”

“He appears disheveled, and probably because of that people think he’s disorganized,” Olson said. “He’s very much the opposite.”

Frieder’s coaching career came to an abrupt halt before last season amid the fallout of a gambling scandal involving one-time star guard Steve Smith. Frieder wasn’t implicated, but his career at ASU was over.

A year later, Frieder said he doesn’t miss coaching a bit. He was reminded of the scandal again recently when Smith wrote a story for Sports Illustrated explaining what happened. Frieder’s telephone rang constantly for a few days with reporters wanting him to discuss the story.

He cooperated to a point, then put an end to it for reasons that show where his heart is now.

“I couldn’t get to three things I had to do, and it cost me $70,000,” he said.