The $100 Billion No One is Talking About: What Happens When the Money Returns?

Sammy Gordon (0:05)

Good day, guys, doing a bit of a different podcast episode style today, and this is going to be drawn out on a bit of butcher's paper, guys. And if you like to sing, make sure you write in, you let us know what you throw in the comment section of the app. I want to know if you guys like to sing, if you want me to bring more episode styles like this to you. If you did, as always, make sure you send out to someone else you think would take some great value out of it. And if you haven't hit the follow subscribe button yet and you love this episode, make sure you hit the follow subscribe button and comment what you loved or didn't love about the episode so we can keep doing more. That flows in with what you want now talking about flow guys today. We're going to be talking about the flow of capital. Now, it's something that's talked about a little bit here and there. But I think in a time like this in an environment like this, it's a really, really important thing to understand, understand how it's at play, understand why it's at play and then understand really what the flow and effects will really be. And when they talk about like buying when sentiment is at its lowest, there's like there's the I guess the general perception and understanding of that, but actually understanding why we want to buy at the lowest sentiment in the marketplace. And what can potentially come after that fact is understanding everything to do with the flow of capital and how that can impact your journey and really how it can impact the biggest and best results by getting in in the downtimes and waiting for that flow of capital to come back in. So I'm going to break it down, guys. The reason I want to break it down like this is because it gives you a good flow and a good understanding of the way that it moves, right? And so the way that I look at capital is effectively, it's like a river, right? And so effectively, your capital is like a river. And like when it's when it's really big and bustling and everything, effectively to me, when the sentiment is at its highest, you're at 100% and 100% is high sentiment.

Everyone's bullish, everyone's in the marketplace. It's all sending and that's when growth rates are really, really strong, but it's also when it's the hardest time to buy in the marketplace, is when sentiment is as high as a peak, optimism and everyone's getting into those times. Now, it's always like when we look back at it and you know those times, you know those environments where you look back and you go COVID, the first three to six months of COVID. That's very similar to the environment that we're in right now. Sentiment was exceptionally low. People didn't want to put their money in the marketplace and there's a lot of people went missing. Now, you fast forward to the six to 12 months past that, sentiment went through the roof. Different markets obviously went ballistic. Most of Australia did really, really well. But if you position yourself really well when sentiment was really low and all that capital was out of the market, that's when the best buying opportunities were before it turned it back on. So guys, right now we're obviously at a very low sentiment. If we look at high sentiment, that was pretty much coming into the start of this year, coming into 2026 The market was absolutely sending, capital was loose, people were spending, people were buying, things were flying off and going really, really hard. Now, what happened was, in around about February, March, April, there started to be some chatter around the budget and the potential changes to negative gearing, capital gains tax. They were the two big ones that were talking about it, indexing CGT as well, going through these different sorts of things. Now, when that happened to me, around about 10% of the market sort of pulled back. It was like that little bit of fear that came in the market, a little bit of uncertainty. And this is where we sort of started to see some people go, oh, maybe I won't actually buy now. There's a bit of a pullback. And the other thing, the other key distinction that I want to make with capital and with the flow of capital and how it works is it doesn't just disappear, right? It pulls. It doesn't just disappear. It doesn't just vanish into thin air. You know, if you have a certain amount of people out there in the marketplace looking to buy, and then they decide not to buy, they still have the cash that enabled them to get into the market. They're deciding not to buy at this point in time. And so the number that I'm going to use in this example to make it really easy and really simple to understand is a billion dollars. Now, you might think that like a billion dollars is like, Sammy, why are you talking a billion dollars? That's insanity. The number that it actually is will ridiculously surprise you when you understand it from this side. We're going to use a billion dollars, right?