Here’s a Money Manager Whose Record Commands Respect : Investment: John C. Burney, whose firm handles assets worth $400 million, was a brigadier general before ending his 28-year military career.

His troops trusted him on the front lines of the Cold War, and now more than 3,000 investors trust their life savings to him.

John C. Burney’s 21-year-old money management firm handles $400 million in assets. But investing is Burney’s second career: He spent 28 years in the Army, rising to the rank of brigadier general and serving in Korea, Vietnam and Europe.

Burney, 71, is grandfatherly, not authoritarian, in describing his military commands and his firm--perhaps because the Burney Co.’s staff and clientele are replete with former military comrades and their relatives.

Seven of the general’s West Point classmates joined him in civilian life as analysts and portfolio managers at the Burney Co. And the customer list has always read like “a who’s who of the most well-known, most senior military admirals and generals, right up through the Gulf War,” said Peter Woolston, one of the firm’s portfolio managers and a former lieutenant commander in the Navy.

Burney, however, rarely plays up these military underpinnings except to emphasize that discipline has helped the Burney Co. steadily grow from its beginnings as a young cadet’s hobby into a thriving investment firm.

“I think there’s a sense in some people that being with this group of military people, they’re with a disciplined group whom they can trust,” he said.

Since its inception in 1974, the company’s “master” portfolio of recommended stocks has produced an average annual return of nearly 22%--better than the Dow Jones industrials and the Standard & Poor’s 500 over that period.

Burney entered the U.S. Military Academy at West Point in 1943 after a short stint as an enlisted man, graduating in 1946. The 28-year career that followed, mostly in tank and armored cavalry, spanned 24 assignments and 27 moves, ranging from stateside duty as a test parachute jumper at Ft. Bragg, N.C., to overseas tours in Europe, Korea and Vietnam.

The largest chunk of that time was spent in Germany, where he commanded troops in the 4th Armored Division along the Czech and East German borders, opposite the highly mechanized forces of the former Soviet Union.

Ultimately, Burney landed at the Pentagon: “the most distasteful place of all,” he quipped, smirking like a Cub Scout who has said something naughty.

His rise through the ranks climaxed with his 1970 promotion to brigadier (one-star) general. But it was during the troubling close of the Vietnam War that he became disenchanted with military service and turned his thoughts to investment management.

“The Army was downsizing and we’d given up in Vietnam. There seemed to be little opportunity for promotion, so things looked bleak,” said Burney, whose affable manner would seem out-of-place in a foxhole or a trading pit.

So how did a life in the military, disciplined as it is, qualify him to manage money?

There were no courses in economics or security analysis in West Point’s engineering-laden curriculum. Even so, the statistical nature of those studies appealed to Cadet Burney, so he whiled away his free time reading about investing.

“I’d be outside running around the woods all day as a junior officer,” he said. “I needed something to do on a rainy weekend.”

The first book he read on the subject was “Security Analysis” by Benjamin Graham, an early mentor of billionaire Warren Buffett and the “granddaddy” of value investing.

“I read his book and was entranced by it, and I started to work on an investment analytical system,” Burney recalled.

That system evolved into a 65-gauge barometer for calculating the intrinsic value of a company’s stock. If a firm’s shares are selling at least 30% below that value, the company is placed on Burney’s buy list.

“You can’t say that the value philosophy is novel,” he said. “But our method of applying it is novel. . . . It’s very clear that our investment approach is conservative, long-term, disciplined and patient.”

By 1974, the system “was doing very well with my family investments. So I felt comfortable in leaving the Army.”

Burney had also been advising some of his West Point classmates, and seven of them helped form the early core--or corps--of the Burney Co.

“None of them had any education in security analysis or financial management,” said Burney, whose wife, Mary, is also part of the team. “I was searching for intelligent people with integrity.”

The business, based in Falls Church, Va., grew modestly until 1984, when an article in Money magazine highlighting portfolio managers such as the Burney Co. prompted a flood of new customers.

“We got more than we could handle and we cut off new accounts” temporarily in 1986, said Burney, who lives in Portsmouth, R.I.

These days, the company’s recommendations are determined by a panel of six analysts and communicated by 19 portfolio managers.

Among Burney’s original group of soldiers-turned-money managers, one has died and two have retired, but all three have been replaced by sons and daughters. “The company is evolving,” he said. “I would feel uncomfortable in our type of organization with a group of people that I didn’t know and trust.”