The Small Investor's Secret Weapon

Hey guys, welcome back to the Aussie World Creation YouTube channel. My name is Brandon, and today I'm going to be talking about why small investors—this little guys, you and me—have an unbeatable advantage over the really big players in the stock market that are managing millions upon billions of dollars. Okay? So this is proven; it's definitely a fact. We definitely do have this unbeatable advantage that opens us up to much, much larger returns than what the big dogs can actually get from their investing.

So in this video, I'm just going to break it down into really easy to understand terms and teach you guys how you can exploit this system because it happens time and time and time again. The big dogs are stuck with mediocre returns, but the little guys are making the 30 percent, the 40, 50 percents in the stock market. So guys, if you enjoyed this video, if you find it useful, please leave a like on it below. If you're just coming across the channel for the first time, consider subscribing. But for now, let's get started.

So, this concept I've actually touched on it before, and I got a few comments on that video where I was talking about it of people saying, "I've never really thought about that before; that's really actually quite interesting." So I thought that I'd make a full-on video on how the little guys can pretty much always get bigger returns than the big guys.

So the first thing to know is that the big guys, the guys managing millions or billions of dollars, they are 80 percent of the total equity market. They are 80 percent of all of those companies' ownership on the ASX. Okay? So most of the stock market rests in their fully incapable hands. The individual investor only collectively accounts for about 20 percent of the stock market. So it's not very much—just 20 percent of the stock market, right? It's a very small amount really in that, in the grand scheme of things.

Now, you might be asking, "Who are these big guys? Who are they? What's their game?" So, the guys that are managing millions and billions of dollars, basically they’re insurance companies, their mutual fund managers, they're people that are looking after superannuation that's just left unattended—people that don't track their super or anything like that. These people are asset managers. They're people that are employed by a company. So they're employed by the company to manage the assets, right? To actually manage the trades of that company to meet the goal that has been set.

So here's the thing, right? They are employed by a company, so just like anyone in any job, they have to perform for that company, right? They are monitored, like everyone else. These people are monitored for their success or their failure in terms of what the company needs and has asked of them.

So, with these big guys, these asset management teams or even individual asset managers, the cool thing about the stock market—and this is where it really opens up the small guys for big, big returns—is that in the stock market, results are always based quarter-to-quarter. Okay? For whatever reason, the way that all this stock market data is reported is every quarter. Makes sense—four quarters in one financial year. So the performance of these asset managers is also quarter-to-quarter.

So when these big guys are investing their money, they have to prove that their money, that their decisions, are making the company money. Usually, they have to prove to the investors that are handing over their money to this person for them to do the investing. The big dog—that's the asset manager—has to prove they have to actually prove that they're worthwhile, that they're actually useful for that company. So they have to do that from quarter to quarter.

So at any one time, an asset manager is thinking about three months into the future. Three months into the future. Now, this is a very, very interesting thing because we know that most reliable stock market investing is a long, long-term play. If you look at the stock market or if you look at say the ASX 200—so just grouped the 200 biggest companies on the Australian stock market or the stock exchange—then you'll see that in the short term it might go up or it might go down. Really, it's quite unpredictable short term how it's going to go.

But if you back it out—if you back out the graph for longer and longer—the chance that it's overall gone up is much, much higher. So the further back in time you go, you make the graph longer and longer, the more likely it is for that graph to have trended up over time. Now, the asset managers wish they could invest with a long-term mindset because seriously, they could make some huge money if they could invest long-term. But the way the system is set up means that they have to produce results every quarter.

Okay? Every quarter. This locks the big guys into an extremely short-term mindset with their investing. They basically have to sink their money into things that they think will instantly go up, and if they don't, or if they start to fall, they don't have time to persist and ride out the lows of the market with those stocks. They have to cut them, alright? If they don't cut those stocks out, then they're just going to be dragged down. That's going to reduce their performance from quarter to quarter.

So what it ends up doing is it ends up, say there’s, let’s use a company that I'm invested in for an example. So I'm invested in a company called Jepara Healthcare, and a few months ago they released a report to the market that says, "Look, the next year is probably going to look very similar to the last year that we've been in business," aka they probably aren't expecting a huge amount of profit growth in the next year. Okay? But what they did say is that they think that around 2019, 2020—that's when they're going to see really good growth out of their company.

So what do the big asset managers of the ASX do? They have to look at Jepara and say, "Ah, okay, Jepara is not going to make much more money in the next year; we have to get rid of it. We might look at it over in 2019 when it’s thinking that it might go somewhere, but in the meantime, we can't be in Jepara." And that sent the share price down because they all left. All of them just packed their bags and they said, "Someone else can have these shares; I don't want them. I'll see you guys later. I've got to go look at maybe Bitcoin that's going up a lot at the moment."

So all of them left. And when all of the big guys—remember this: 80% of the stock market, that's the big guys—when the big guys start getting their money out, we're not just talking about thousands of dollars leaving the stock; we're talking millions of dollars leaving the stock. And when there's millions of dollars leaving the stock, that just puts so much selling pressure on the stock that the price gets pushed down. There's more sellers than buyers, and that means that, obviously, the share price will be pushed down.

Okay? But for us, the small guys, we can wait, right? We don't have to report quarter-to-quarter results. We might take note of what our quarter-to-quarter results are, but we don't really care because we're in it for the long term. So Jepara was trading at a really, really low price after all the big dogs had left. So as the little guys, we can just come in there and collect some shares, and we're getting them at a discounted price because that stock has been oversold.

Okay? So it's actually been sold so much the share price is going down. The big guys just have to keep leaving, just get rid of it, get rid of it, get rid of it, and then it's gone, and the share price is way low. So we can come in there and say, "Yeah, give me some shares." And what do you know? Just a few months later, the share price has corrected, and it's back up to almost where it was before.

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So now, if we had bought in off of the big guys that wanted to leave the stock, if we had bought him when the price was low, we've already made a decent percentage return on our money, and it's not even 2019 yet. Imagine when 2019, 2020 come round and Jepara Healthcare is saying, "You know what? We're ready now. We can make some money. You guys want to come back then?" All the big guys start funneling that money back in. There's more buying than there is selling.

Okay? If there's more buyers, then the price goes up, right? Because there's more competition around, and then the share price is going to go up even more. So that is how the system works and how, as an individual investor, you can actually use the fact that the system is set up on a quarter-to-quarter basis to take advantage of the big guys that are managing millions or billions of dollars. And that is how we, as the small guys in the stock market, can make huge returns.

Okay? Because we can wait it out. We can actually buy more shares when the price is going down. The big guys can't do that. That’ll look terrible on their little reports that they do. Okay? That is how we, as small-time investors, are going to hands down beat the big guys every single time.

So guys, I hope that you've really learned something out of this video. I hope it inspires you, especially if you’re a small investor and you've always thought that maybe you’re a little bit fearful to invest because of these big guys with lots of money saying, "No, no, no, you can't invest; it's way too risky. You should give your money to me so that I can invest it for you." Yeah, if you're someone that's always thought like that, I hope this video makes you realize that really that's just a scam. It's just a scam by the big money managers of the world, and you have the power as a small investor to go out and smash the big guys.

So guys, if you enjoyed this video, chuck a like on it down below, head over to the Facebook page for Z Wealth Creation, check the like on that as well. You want to be doing that very, very soon. But guys, that's it for today. I hope you really enjoyed it, and for now, I will see you guys in the next video.

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