John Burbank – Think Piece – Part Two

Featuring John Burbank

In the second part of this illuminating Think Piece, Founder and CIO of Passport Capital John Burbank speaks about how investors are awakening from a QE-induced slumber, the overproduction and underconsumption that are turning the world back to macro, and being long innovation where human capital clusters.

Published on
29 September, 2015
Monetary policy, Liquidity, US Economy
25 minutes
Asset class
Equities, Bonds/Rates/Credit, Commodities


  • JC

    John C.

    29 8 2016 08:12

    0       0

    Great insight. But I really wonder about SF and California continuing to be the center of innovation given the stifling regulatory and tax environment out there. Also the 'creeping righteous fascism' of the US in general and the Left Coast in general. I don't know a US state or city that is more about 'big government' and overregulation (bordering on insane) than SF. Nor of a bigger housing bubble than in the Bay Area. As smart as these people are, aren't we all supposed to be questioning how much longer things can go on as is out there? The social and politically correct climate in the universities and places like SF is absolutely stifling.

  • TS

    Thomas S.

    16 1 2016 04:27

    1       0

    He says the government is the only entity that is not deleveraging. Looks to me like many public companies have been in the process of levering up their balance sheets to buy back stock

  • SL

    Sandy L.

    24 12 2015 16:47

    3       0

    The big picture view is so, on point - thanks JB. Along with Raoul / Kyle Bass and Brett Steenbarger, he makes RV special - whereas a lot of other talks seem filler material

  • FT

    Frank T.

    23 10 2015 23:50

    0       0

    No mention of a lack of fiscal spending on public works? The TVA and Hoover dam are certainly not in San Fran and are still generating clean energy? Did he say he missed the most of the 90's ROI?

  • FT

    Frank T.

    23 10 2015 23:39

    1       0

    San Fran the center of reality syndrome? I'd argue the NASA/defense/university research funded by taxpayers is the agent of change unique to this nation. First price is but a rationing mechanism?

  • IK

    Ian K.

    11 10 2015 05:31

    1       3

    Liliana, we won't see much good out of India this decade, especially with its oppressive, protectionist, nationalist government. It may not even reap the natural rewards of its demographics.

  • LC

    Liliana C.

    6 10 2015 05:05

    4       0

    John cb blinded due to his closeness to SF. He didn't see China coming and he may no see India or X coming and with it another boom in commodities much later. Not different this time . Tech bust part2

  • WM

    Will M.

    6 10 2015 01:57

    2       0

    Interesting and thoughtful comments on technology by John. However, I was not convinced that SF is going to be the key "cluster" nor that the liquidity event isn't going to be world changing.

  • DF

    Dominic F.

    5 10 2015 22:51

    3       0

    Governments are the enemy of innovation. They seem to prefer slow moving, established, crony capitalism.

  • DF

    Dominic F.

    5 10 2015 22:48

    4       0

    So good to watch someone so positive about the future and human resourcefulness. John see's through the 'liquidity event' that everyone else is so scared of. If Fed didn't act we'd be there already.

  • tW

    tgwtom W.

    3 10 2015 19:07

    2       0

    Keep talking, please.

  • MB

    Mike B.

    3 10 2015 09:30

    3       1

    The liquidation event and deflation thesis is sound but other than long US Treasuries, not many insights as to where to hide out. Otherwise, this was one of the top RV insight pieces.

  • RN

    Rasmus N.

    2 10 2015 10:23

    4       1

    Sorry, but the comments on tech are too simplistic. True, tech will remain innovative/disruptive, but not necessarily a good investment. The low entry barriers are a constrain for supernormal profits.

  • EL

    Elizabeth L.

    1 10 2015 18:35

    2       0

    The human world of exchanging goods and services is rapidly moving away from the GDP measures. Yet unheard of methods of energy production, cleaning water, growing food are on our horizon. Yes, John

  • SD

    Shyam D.

    1 10 2015 05:53

    4       0

    I think since he s in SF he s a bit caught up in the clustering story. Its been happening for a while. The key point / take away is innovation. Tech is eating the world and thats going to ramp up.

  • RP

    Richard P.

    30 9 2015 23:12

    4       0

    John’s clustering thesis is depressing- just visit San Francisco.

  • DH

    Dale H.

    30 9 2015 22:52

    1       0

    Food for thought. Wld like grtr depth of explanation of key points + examples. I've checked innovative companies to invest in = volatile; require deep research, science/tech know how = prop if early

  • CB

    C B.

    30 9 2015 19:14

    6       1

    Disagree strongly with his clustering thesis. Firms around this country are outsourcing work to a distributed pop of programmers, spread worldwide and doing excellent work. See RealVision as exmpl!

  • ZJ

    Zach J.

    30 9 2015 15:40

    7       1

    From his clustering framework I would think Texas - an emerging market w/in a developed economy - is better positioned to attract capital of all types. A better place to do business for many reasons.

  • ZJ

    Zach J.

    30 9 2015 15:32

    1       0

    Great Insight here from John. Would love to see him elaborate on his energy thesis and its impact on majors. Seems overly enthused about San Fran. Whats theImpact of a botched regulatory environment?

  • FS

    Fred S.

    30 9 2015 13:30

    12       0

    Deleveraging? Gov't numbers show tiny amount of personal deleveraging over the last 10-15 yrs. Corps are levering up to do stock buybacks. Not sure where he gets his leverage data.

  • sp

    shashwat p.

    30 9 2015 05:20

    8       0

    Peter Thiel makes the case for slowing rate of technological change. Marginal utility of "new tech" is low. Internet has been great, but less important than internal plumbing for human well being

  • sp

    shashwat p.

    30 9 2015 05:07

    11       1

    So what happens to the A team when the underclass becomes desperate enough? Nothing good. Marx might have been bad at economics, he did understand the dynamics of class warfare rather well.

  • FG

    Frederik G.

    30 9 2015 02:00

    17       7

    Outstanding. There is so much food for thought and insight in here. Easily one of the best pieces on Realvision.

  • CL

    Carlos L.

    30 9 2015 01:09

    8       0

    I would only comment that the concentration of capital, human or otherwise, always suffers liquidity events. Just as an extreme example, a major earthquake in the Bay area. Use your imagination.

  • GB

    Greg B.

    29 9 2015 22:32

    6       1

    Human capital is less restrained in the digital era. Barriers are lower for implementing and scaling innovation and markets are bigger therefore the opportunity for impact & value creation is greater.

  • TS

    Thomas S.

    29 9 2015 22:28

    5       0

    Interesting, but other than the Silicon Valley what does San Fran have that NYC or London doesn't? As a place of the future Niall Ferguson recommends Hong Kong, but I'm not so sure where's best to be.

  • SJ

    Suzanne J.

    29 9 2015 22:08

    8       0

    Thank you, John. My mind has shifted as a result of your forward thinking, which is a very pleasant change from revisionary commentary. I look forward to hearing more from you, please.

  • GR

    Gregory R.

    29 9 2015 20:51

    3       0

    The future lies in tech grounded in the sciences. It’s silly to try to predict where innovation will occur. Understanding the technology will be the key to realizing its value.

  • KA

    Kelly A.

    29 9 2015 20:12

    5       0

    It's clear that successful investment in little whales requires constant scanning of the horizon and being close to the action. I'm a mundane investor, but the interview was interesting. Thx..

  • MM

    Milly M.

    29 9 2015 19:19

    4       0

    I think the future speaks through John, it's all about human capital & talent clustering and everything what's gonna facilitate it (i.e. workspace/tech/lifestyle/long-term education providers).

  • SC

    Shaun C.

    29 9 2015 19:02

    4       0

    Risk Parity in that environment is not pretty. Look at doing 1/vol or equal risk contribution optimization on Japanese assets for last 25 yrs.

  • SC

    Shaun C.

    29 9 2015 19:00

    3       0

    How does this "liquidity event" unfold? Long, fitful deleveraging to 2% long bond and negative US rates to 5yrs?

  • A

    Aaron .

    29 9 2015 18:27

    12       1

    “Out of clutter, find simplicity. From discord, find harmony. In the middle of difficulty lies opportunity.” Einstein