How a magician turned $276,000 into over $1 million in less than 8 years

A magician rarely reveals his tricks, but in a recent interview, Chan told BI about his simple but unconventional investment strategy. But emulating his success isn’t like learning a card trick.

“Magic is easy – investing is hard,” Chan said.

From stunning magic to stunning comebacks

After missing out on a once-in-a-lifetime opportunity, Chan took a more difficult route to strike it rich.

Born and raised in the Bay Area, Chan became an early employee at PayPal during the dot-com boom, though he sold his shares in what is now a $73 billion company too soon.

Around the same time he joined PayPal, he started doing magic shows. His interest in the craft came from watching legends like David Copperfield and David Blaine and “getting screwed badly,” he said. Chan picked up tricks through lectures at a magic shop.

Fast-forward a few decades to March 2020, when stay-at-home orders threatened to shut down Chan’s businesses. But what could have been a deal-breaker for the so-called “mentalist,” whose shows center on what appears to be mind-reading, turned into a major breakthrough.

Like the rest of the world, Chan became familiar with Zoom and discovered that the video calling service could take his business to new levels. Soon, he was performing up to 12 half-hour shows a day, earning up to $4,000 per show, performing for companies and billionaires.

Virtual shows have saved Chan countless hours of travel, even if they’ve prevented him from swapping stories in person with celebrities like Elon Musk, George Lucas, Paula Abdul and Draymond Green, who are just a few of the icons he he met them throughout his career.

“We were doing virtual shows, but at the same time we had so much free time,” Chan recalled.

To stay busy during the pandemic, Chan began reading more about investing and, like millions of others, made a habit of picking stocks himself. Family members tried to talk him out of it as the market wobbled. He’s glad he didn’t listen.

How to invest like a magician – and the company where it’s almost all in

There is no smoke and mirrors behind Chan’s comebacks. The Magician taught himself how to pick stocks and believes that others can create wealth for themselves and their families.

“Your portfolio manager wants to charge you,” Chan said. “Why give them the money?”

Investing doesn’t require a financial background or a crystal ball. Even after managing money for years and beating the market, Chan doesn’t pretend to be an expert. Those who follow in their footsteps should not be afraid to take risks, especially with companies they know and believe in.

“It’s crucial to invest in your gut in the beginning and make small mistakes,” Chan said. “Don’t wait to start investing.”

He later added, “You’re going to hit, but I’m still going to have to swing,” Chan said. “Swing for the fences, because we used to just shoot for first base.”

Like most fund managers, Chan looks at valuation metrics such as the price-to-earnings (P/E) ratio and looks at a company’s debt level. But most of his investment strategy is based heavily on anecdotes and real-world experience. For example, if he sees open lines at Costco or has a bad experience with Tesla’s customer service, he can buy or sell those stocks.

Another fascinating twist is that Chan buys at least one share in every company that hires him for a magic show, sometimes just to see how it works. And when he has in-person shows, he looks for clues that give him insight into what goes on at the company behind closed doors.

“There was only one situation where we felt like nobody wanted to be there,” Chan said, calling the company off-the-record. “It felt like the corporate culture was broken.”

Instead, Chan became an Nvidia believer after seeing CEO Jensen Huang up close. Now he has a hunch about how the chipmaker’s assessment defied gravity.

“Jensen did a meeting with the interns and all the interns were lined up,” Chan said. “I was thinking, ‘Boy, if they did this recruitment and people started hearing about it, people are going to want to work for Nvidia more.’ Because Facebook doesn’t – I’ve never heard Mark Zuckerberg show up at an intern event, but interns are the future of your company, and if you get them excited, they’ll work harder for you. “

Pull back the curtain on Chan’s investments, and one company stands above the rest: Alphabet. More than 70% of Chan’s portfolio is in parent Google’s Class A ( GOOGL ) and C ( GOOG ) shares, and his profit on those two positions is nearly $160,000.

“One thing I realized about Google was that whether you click on an ad or a kid clicks on an ad or you just watch something on YouTube, they make money,” Chan said. “I said, ‘This is a really good business model.’

When Chan’s favorite growth stocks go on sale, the magician usually buys the dip, though that has reversed for Alphabet of late, which is why he’s starting to diversify away from it.

It wouldn’t take a reader to figure out what professional money managers would say about Chan’s strategy. They would certainly scoff at his all-in approach and occasional use of valuations.

But most fund managers are in the market, and Chan beat her to the punch. Maybe the magician could teach these professional investors a trick or two.