Most folks think there’s just one stock market.
It’s made up of stocks listed on the New York Stock Exchange, the Nasdaq, and other public exchanges.
And it gets endless coverage on CNBC… Bloomberg… and in The Wall Street Journal.
But there’s a second, less well-known stock market.
And it can be far more lucrative than the public one most folks are used to.
Up until recently, this second stock market was the exclusive playground of wealthy, well-connected investors.
But thanks to rule changes by the SEC (Securities and Exchange Commission), it’s now open to everyday investors like you.
What is this second stock market?
How profitable can it be?
And how can you take advantage of the opportunities on offer there?
It’s all in this week’s video update at the top of the page with me and host Tom Beal.
Editor, The Daily Cut and Legacy Inner Circle
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Tom Beal: Were you aware that there are two different types of stock market? The one most everyone knows of can get you some decent gains. The other, very few know of, and it gets you life-changing gains.
My name is Tom Beal, the host of The Weekly Pulse, where we break down the biggest wealth-growth story of the week. I’m here today with the editor of Legacy Inner Circle, Chris Lowe.
Chris, how do we kick off today’s conversation?
Chris Lowe: Tom, if you turn on CNBC right now, or if you head over to Bloomberg, you’re going to see a lot of wailing and gnashing of teeth over the China Evergrande property developer story. There’s a big property developer in China that may go bankrupt. That may be a debt event over in China.
There’s an awful lot of coverage in the U.S. news over the food-fight on Capitol Hill over the debt ceiling.
We’ve been here many times before. A lot of folks watching this are probably sick of that story.
At Legacy Research Group, we don’t do mainstream stories. We don’t do mainstream opportunities. That’s not where the profit opportunities are.
As folks who have been with us for some time will know, the profit opportunities are always in doing something different from the mainstream.
Today, I’m going to shine the spotlight on one of the big alternative profit themes we track at Legacy – pre-IPO stocks.
We’ve got a webinar coming up next Wednesday, October 6 with colleague Teeka Tiwari. It’s going to be about the new pre-IPO opportunity that he’s unveiling for his Palm Beach Venture advisory. There’s a link beneath this video, so folks can sign up for that, if they haven’t already.
But today, I want to do three simple things. First, I want to introduce folks to what pre-IPO deals are. Then, I want to show folks watching this why they’re such a standout opportunity, right now, today. Then, number three, we’re going to look at some ways… some pointers, if you like, on how folks can get involved in pre-IPO deals.
Tom: I was oblivious to pre-IPO deals prior to learning from you and the experts here at Legacy Research Group. I’ve since been brought up to speed, as to how there can be tremendous opportunities… with the caveat: when done right and when done with the proper guidance and with the research.
That’s a big caveat that I’ve learned. Follow the advice of the experts. Don’t try to think, “I’m going to figure this out,” because it’s not just the experts. It’s the experts and their team.
I’m super-excited to hear more about this because I know that’s where those game-changing returns can be produced – with the proper guidance, not following the mainstream, but following the Legacy Research Group experts.
Chris: That’s right, Tom. I’ll give you a very high overview. I know there’s a lot of folks who are joining Legacy every week. They’re not all investment professionals. In fact, few of them are. They’re regular folks looking to really move the needle on their wealth in the market. So let’s just break it down to the basics.
There are really two types of stock market. You don’t hear about one of them a lot, but there are actually two, not one.
There’s the public stock market. That’s the stock market that most people know about. It’s the market that allows you to buy stocks listed on a public exchange, like the New York Stock Exchange or the Nasdaq. You’ve probably heard about those on CNBC.
Then, there’s the private market. Now, companies in the private market have issued shares, but historically there’s been no easy way for regular investors to buy those shares.
That’s a problem because the typical lifecycle of a company is that they start out private, and then they go public. This is usually done by something called an IPO, or an initial public offering. That’s the first time most investors can get their hands on shares – when those companies list on the New York Stock Exchange or on the Nasdaq.
But the real problem with that is that it’s a way better deal to get in on a company that you think has good prospects at the private level. That’s because you’re at an earlier stage in the company’s growth, and the shares are cheaper. That means lower entry prices… and higher profits when you sell.
I’ll give you an example that the folks at Palm Beach Research Group have put on their readers’ radars. It’s by way of Teeka’s righthand man at Palm Beach Venture, William Mikula.
In April, William calculated the average gain for public market investors – folks like you and me, who go to our broker and buy the stock on the day it lists on an exchange – from the beginning of this year up until the beginning of April, the average gain for public investors on IPO day was 36%.
That’s a pretty good deal. It’s a one-day gain of 36%. It’s not to be sniffed at.
But pre-IPO investors, on the same day, made average gains of 22,946%. That is a world of difference. As William says, it’s a difference between a luxury vacation and living a life of luxury. I think that’s a very important point.
Here’s where this gets really interesting. There have been rule changes by the Securities and Exchange Commission (SEC), the main stock market regulator in the U.S. Regular investors can now take part in those private deals. That wasn’t possible before these rule changes.
That’s why Teeka has decided to turn the tables on Wall Street by taking advantage of these rule changes and creating an advisory, Palm Beach Venture, that helps regular folks get in on these private deals.
Tom: 36% compared to 22,000% plus is life-changing. Most people in the mainstream media will be happy with 36%. That’s exponentially above what their normal returns are.
But what we deal with here in Legacy Research are the multiple hundreds of percent returns, the thousands of percent, and, in this case, multiple tens of thousands of percent. That caught my ear and has me super-excited to learn more, to say the least.
Chris: I should point out, you’re not going to have an entire portfolio full of these pre-IPO deals. They’re speculations. As we say all the time, you want to have around 10% in speculative opportunities. Always check with your financial advisor. You’re not going to want to have 100% of your portfolio in these speculative opportunities. But they are phenomenal asymmetric bets, meaning that you have to put a small amount down with the potential for outsized returns.
I want to talk a little bit as well about why pre-IPO shares are such a standout opportunity right now. Another of Teeka’s analysts, Grant Wasylik, wrote recently, over at our Palm Beach Daily e-letter, that publicly traded companies are like an endangered species. That wasn’t on my radar at all until I read Grant’s piece. But as you can see from the chart Grant put together (below), over the past two decades, nearly half of the publicly traded companies in the U.S. have vanished.
This really is an amazing statistic. Go back 20 years, and there was double the number of publicly listed stocks available. That automatically means there are fewer opportunities right now in the public markets.
One of the main reasons that there are fewer publicly available stocks is that companies have tended to stay in private hands for longer.
That lifecycle I talked about early on, when you start off private and go public, what’s happening is that the private part of the lifecycle is elongating. There’s so much money sloshing around the markets, so much privately available capital, that companies don’t need to go public. They don’t need to go through all that regulation to do their IPO and list on a public exchange.
This is a really critical point. From 1999 to 2020, the average market cap, or the market value of private companies going public, jumped 776%.
That means that a lot of the gains have accrued to those private investors. Because if you are only able to buy much later on in the lifecycle, as those stocks are going up, and up, and up in price, you are getting left the scraps from the table. The private investors are gobbling up all those cheap shares. They’re the ones benefiting on IPO day and beyond.
I thought that was a really interesting opportunity about the public stock market and how shares are actually shrinking there.
Tom: Correct. If we’re following the mainstream media, the only time anyone would be aware is when it is public. They miss out on all the gains, the pre-IPO.
And like you pointed out, this is stuff that was very difficult a while ago. But now, thanks to technology and the experts here at Legacy Research Group, you can get some insights that can help you get gains that are far in excess of what normal people even believe is possible. This really is a possibility – to produce life-changing results with the proper guidance, and awareness, and actions that you take.
Chris: That’s right, Tom. You mentioned technology there. There are some very interesting crowdfunding platforms that the folks at Palm Beach Research Group have talked to their readers about. These weren’t recommendations, they were just pointers for how folks can learn more about these private deals.
There is a platform called SeedInvest. There’s another platform called MicroVentures. They list dozens of startups raising money from the public. In some cases, on SeedInvest and MicroVentures, you can start with as little as $100 and get involved in some private deals.
I’m also going to put up some links to Palm Beach Daily articles about the pre-IPO market, so folks who’ve watched this and find it interesting can learn a little bit more.
Also, most important, I’ll put a link to Teeka’s webinar that’s coming up next Wednesday, October 6, all about the latest private share opportunity on his radar.
This is a really exciting one, Tom. I know Teeka and his team are very bullish on the opportunity. I can’t reveal the details. But if folks want to click on that link and sign up, they can attend next Wednesday.
Teeka will be talking all about the opportunities in pre-IPO deals, plus that big pre-IPO deal on his radar, at the top of his list, if you like, right now.
Tom: Chris, this is what I appreciate about you, Teeka, and all the other experts here at Legacy Research Group. For those who don’t know, I was late to the game of financial literacy. You may be looking at me, thinking, “Tom, you’re still a young whippersnapper.” Well, I just turned 49 a couple of days ago. It’s all relative. Some of you are ahead of me on that curve. Some of you are behind me.
But I want you to know it doesn’t take huge amounts of expertise or degrees to follow the guidance Chris, as the editor of Legacy Inner Circle, and the experts at Legacy Research Group bring to you. You can have, like me, very minimal financial literacy, and have your eyes opened to these possibilities… And you can achieve results that minimal investments, as Chris said, can produce life-changing returns, which you won’t get in the mainstream.
This is from the experts here at Legacy Research Group, putting in their years of research, their decades of research and expertise, but also their team.
You have a team here working through Chris and Legacy Inner Circle and through Legacy Research Group. I don’t have 20 hours a day to dig into this. They have their teams cumulatively putting in hundreds of hours of research to disseminate this to you.
I wasn’t aware of it. Now, I’m aware. I don’t know much about it. But I do know this: If I follow the advice of the Legacy Research Group experts, I’m way ahead of the game. It has worked tremendously so far. I hope you feel the benefits as well, as a Weekly Pulse viewer. Thank you, Chris, for bringing that to our attention.
Chris: Thanks, Tom. Just the last thing I’ll say. I’m about to talk with William in a couple of hours. As I said, he’s Teeka’s righthand man on Palm Beach Venture.
William will be giving Legacy Inner Circle members much more detail in that interview. On Friday, we’ll be posting the conversation, just like this, for our members. They can find out more from William, who’s on the road all the time, boots on the ground, talking to CEOs and hunting these opportunities with Teeka.
Tom: Very cool. Yeah, inside Legacy Inner Circle, you go deeper. This is one example of one of the many experts you go deeper with.
As Chris mentioned, below, there is a link to join the webinar, where Teeka is going to explain this at a much deeper level. Click that link. Go register.
As always, Chris, thank you for bringing the massive value here to The Weekly Pulse.
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