John Burbank is a man among boys when it comes to money management. After launching his hedge fund in 2000, John has since become a widely respected and widely followed player in finance. But you don’t have to take my word for it — just listen to the $3.2 billion his clients trust him with on a daily basis.
But he didn’t just receive that money when he graduated high school. In a recent interview I did with John for the Benzinga Podcast, he shed some light on how he got to where he is today.
By age 13, John was already working his first job. “My first job was as a handy man at a school I worked at when I was 12 or 13,” he told me. From there, his resume expanded to sales and food service. “My worst job was working twelve hours in a row on a hot dog cart. I did not want to eat a hot dog for a year. The first job I had during college was responding to an advertisement that turned out to be selling cookware door to door. That was really hard. I am not an extroverted person who would like that. I did that for two summers and learned a lot. I knocked on 40 doors trying to sell overpriced cookware to women.”
John never expected to get into finance. “I went to business school at Stanford, but it wasn’t until I was about 30 years old when I decided on my own that I was going to.” His father was a teacher that, according to him, “didn’t have money,” so he had to pay his way through college by becoming an entrepreneur. “I found a company that trained students how to run their own house painting business. They claimed that you could make $10,000 in a summer, and this was back in 1985, so $10,000 was a lot of money back then. This was really the only alternative I had, so I did it and I actually made $11,000 that summer. And the third summer I made $35,000.”
But business wasn’t his fate, so it seemed. At age 30, “I borrowed $50,000 worth of credit cards in 1994 and started trading in the market, really as a test to see if I enjoyed doing it and if I wanted to pursue this…This was really a hypothesis for me. Maybe I was interested in it, maybe I would do this, investing, instead of business.”
I’m sure his clients are grateful for his choice. In 2007, when the markets were well into their slow drift toward collapse, Passport Capital’s flagship fund produced a 219% return.
And John seems to think he made the right decision too. I asked him what the best he ever made was, expecting to hear about his prediction on the American housing market, I was surprised with this: “The best investment decision was to start my hedge fund. Even though it only had $800,000, even though there was no chance for me to make money for a number of years…I say that because when I think about investment, it’s not only financially but personally. I grew enormously from that commitment.”
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