Chris’ note: Today, we’re continuing our series of insights from the newer members of the Legacy Research team with an essay from private investing expert Tim Collins.

He’s a former hedge fund manager who bought shares in Facebook and Twitter before they went public. He’s now Teeka Tiwari’s chief analyst at Palm Beach Venture. There, they recommend stakes of as little as $500 in private companies for a shot at 10x gains or more.

Teeka will share details of the latest private deal on their radar tomorrow at 8 p.m. ET. It’s free to attend. So make sure you sign up for that here.

Below, Tim shares his experience of buying Facebook and Twitter during a public stock market crash similar to this year’s. As you’ll see, these investments helped protect him and his hedge fund from the wild volatility of public stocks… on top of delivering outsized gains.


It took a stock market crash for me to find the investment of a lifetime…

In 2011, the market was still clawing its way back from the depths of the 2008 global financial crisis.

By April 29, the large-cap S&P 500, tech-heavy Nasdaq, and small-cap Russell 2000 indexes had hit all-time highs. It seemed the good times would keep rolling.

Then on August 8, 2011, the stock market crashed.

Peak to trough, the S&P 500 and the Nasdaq each plunged 18%. The Russell 2000 – the most speculative of the three indexes – plummeted 25%.

Like today, the headlines were scary.

Europe was in the middle of a sovereign debt crisis. Global economic growth was lagging. And for the first time in history, the rating agencies downgraded the U.S. government’s credit rating.

Investors feared a double-dip recession was on the horizon. And trillions of dollars of stock market wealth went up in smoke.

But those who knew where to look made a killing.

Today, I’ll show you how they did it. I’ll also show you how you can follow this strategy in your own portfolio starting with as little as $500.

Private Shares Doubled Our Money

At the time of the 2011 crash, the hedge fund I co-managed had moved to investing in private shares.

Those are shares in companies that have yet to “go public.” That’s when a company first lists its shares on a stock exchange such as the New York Stock Exchange or the Nasdaq.

We started the fund by buying private shares in a small social media company called Facebook (META).

We weren’t as early into the company as we would’ve liked.

But when it went public in May 2012, most of our position quickly doubled.

After our big win, we sold some of our shares and sat on the capital, waiting to deploy it for the next opportunity.

We were happy with our gains. But we watched other managers who got in earlier than we did net returns of 5x, 10x, and even more.

Next time, we wouldn’t be late for the party. And I had the perfect date to bring with me…

522% Gains

You see, earlier in 2012, I had tried to add another private social media company to our portfolio.

But every call I made got with the same response…

“Sorry, Tim. We’d love to sell you shares. But there’s a line out the door waiting to buy them.”

So, I waited… and waited…

Meanwhile, the public stock market continued to struggle. Like today, demand for growth, small-cap, and emerging market stocks completely dried up.

Then, in July, I got the call I’d been waiting for.

“Tim, we have shares available. Do you want them?”

“Yes!” I yelled down the phone.

The company was Twitter (TWTR). I was so excited that, even though I should have, I didn’t ask how many shares were available – or at what price – before I agreed to buy.

I had done my due diligence. I knew the opportunity was worth it.

The asking price had risen since I first tried to buy the company in March 2012.

That’s the thing about high-quality private companies.

Even though the public markets had plummeted… shares in this private company rose. But I didn’t care. I knew the upside was still huge.

On August 6, only five days after the Russell 2000 had one of its worst months in history, I bought $2 million worth of private shares.

At the time, Twitter’s valuation was about $9.8 billion. That may seem high… but our fund was still early to the party.

By the time it debuted on the Nasdaq in November 2013, Twitter’s value had surged to $24 billion. That’s a 145% gain on IPO (initial public offering) day.

By December 2014, Twitter had hit a $36 billion valuation – an almost 267% rise from IPO day. And in March 2021, it reached a peak market value of $61 billion. That’s 522% more than when my fund bought in – enough to turn our $2 million investment into more than $12 million.

Here’s why I’m telling you about my experience with Twitter…

Recession-Proof Your Wealth

During steep public stock market drawdowns like we’re experiencing now, the “smart money” – hedge funds and venture capital (“VC”) firms – explore alternative investments.

They seek ideas that still offer explosive upside… without daily price fluctuations.

That’s where private markets come in. They can insulate your money from the day-to-day volatility public stock market investors endure.

Unlike with public stocks, market swings generally don’t severely impact the share prices of private firms.

And since their primary focus is raising capital, a good private company will increase its value way faster than the rate of inflation… and continue to fundraise and grow during a recession.

The best private companies have built up substantial war chests. They often use that cash to buy distressed assets for cheap.

And private companies have tremendous flexibility. If the public stock market stays volatile, companies can remain private until public offering conditions are more favorable.

Studies by investment firms Blackstone (BX) and Kohlberg Kravis Roberts back this up. They show that private companies outperform the S&P 500 and are less volatile than publicly traded stocks.

And they perform better during challenging times.

Now, for example…

Earlier this year, Fortune magazine reported that more than 80% of VC and private equity firms – funds that invest in private shares – planned to raise capital in 2022. That’s up from 75% in 2021.

And they’re raising more money. In 2021, private equity funds raised at least $733 billion globally. That’s more than in any other year.

This year, despite ongoing economic uncertainty, they’re on track to raise $952 billion.

Private markets aren’t completely immune to public market volatility or economic uncertainty. Over time, lower public stock market prices can drag down valuations of private companies.

But because they don’t trade on a public stock exchange, private shares resist much of that volatility.

This resilience will protect them from an even bigger crisis on the horizon – a crisis almost guaranteed to impact all of us in the months ahead.

Turn Crisis Into Opportunity

Colleague and private investment expert Teeka Tiwari has identified an imminent crisis… one that will catch most Americans by surprise.

It’ll be bigger than a recession, bigger than inflation, and bigger than a market crash.

But there’s also good news…

Teeka has found a private investment that could help you come out of this crisis wealthier than before.

That’s why he’s holding a special briefing tomorrow at 8 p.m. ET to help you prepare.

He’ll share full details of this coming crisis and how one private company plans to solve it.

He’ll also show you how you can profit from its success… like I did with Twitter at my hedge fund.

It’s a chance to make up to 42x your money… with an investment as low as $500.

That could turn every $500 into $21,000.

You’ll also get a free special report just for showing up. It includes Teeka’s blueprint for this coming catastrophe… a guide to shielding your family from the worst of the crisis… and a free stock recommendation that could double your money as this crisis plays out.

It’s a pick that’s crash-proof, inflation-proof, and recession-proof. But you’ll need to act before this catastrophe hits.

So go here now to reserve your spot to join Teeka tomorrow at 8 p.m. ET.

The free report alone will be more than worth your time.

Regards,

Tim Collins
Chief Analyst, Palm Beach Venture

P.S. Back when I was buying private shares, I needed a hedge fund to access those opportunities. You couldn’t simply log into your online broker to buy shares.

But a lot has changed since then. The 2012 JOBS Act made it easy for the general public… not just wealthy, well-connected investors… to profit from these private deals.

As Teeka says, “You could be one deal away from a lifetime of freedom,” thanks to these opportunities. So I hope you’ll join him tomorrow at his free online event.