They give you nasty nicknames like "Joe Oddlot" and call you the dumb money in the market. They say they're the sharks in the dangerous waters of the stock market and you're their prey. Worst of all, they can scare you into paying exorbitant sums of money to manage your investments for you.

Who are they? Mutual fund managers. And they manage a huge amount of the money invested in the market.

What they don't want you to know, though, is that their bravado is largely just an act. In reality, they're jealous of you -- and extremely scared, too. They're scared that you'll find out the truth about the tremendous advantage you have that is completely off limits to them.

Your unstoppable edge
The great irony of mutual funds is that the very size that gives them their power also gives them their greatest vulnerability. They're simply too big to take advantage of many of the greatest opportunities available in the market.

Take, for instance, Middleby (Nasdaq: MIDD), one of the picks Fool co-founder Tom Gardner made for our Motley Fool Hidden Gems small-cap investment service. When he first uncovered the company in September 2003, the market judged that its entire business was worth around $180 million.

That's a fairly substantial amount for individual investors, but for a fund like Fidelity's Contrafund (FCNTX), which has $72 billion in assets under management, it's pocket change.

In fact, $180 million works out to be approximately 0.25% of the fund's current worth. Contrafund could have bought out the entire company and watched its worth skyrocket, as it has these past few years, yet the impact on the fund would have been minimal.

Where they're stuck -- and you're not
As a result, Contrafund, and other giant funds like it, are stuck fighting over some of the largest companies out there. Its top 10 holdings include giants like these:


Market Cap
(in Billions)

of Fund's Holdings

Google (Nasdaq: GOOG)



Apple (Nasdaq: AAPL)



ExxonMobil (NYSE: XOM)



Hewlett-Packard (NYSE: HPQ)



Schlumberger (NYSE: SLB)



Genentech (NYSE: DNA)



While all those firms may well make fine investments, they're very large companies. Do you really think ExxonMobil will more than quadruple in size over the next few years and become a nearly $2 trillion company? It may get there some day, especially as the developing world becomes more dependent on energy, but it likely won't happen anytime soon.

On the flip side, since it was first selected for Hidden Gems, Middleby has nearly sextupled in value, skyrocketing some 570%. That's your major advantage over Wall Street's giants: You have the ability to buy shares in the best up-and-coming small companies on the market -- and actually feel the benefits of their success.

If you need a few ideas to press the tremendous edge you have over the biggest investors around, join us at Hidden Gems with a free, no obligation 30-day trial.

At the time of publication, Fool contributor Chuck Saletta did not own shares of any company mentioned in this article. Apple is a Motley Fool Stock Advisor recommendation. The Fool has a disclosure policy.