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10-07-2021, 11:13 AM
The home bias is a manifestation of what most people practice: buy what you know.
It is the same for stocks, as it is for real estate. And for the most part, Singaporeans have done reasonably well fishing in the local pond. Unfortunately, growth has been shifting away from the 'Asian Tigers' to predominantly China, so the returns from the local pond has not been as high as the previous decades.
Given the prospect of modest returns, more Singaporeans shifting their attention overseas, or at least the access to overseas markets have vastly improved. But exploring the rest of the ponds out there, which is 250x the size of the local pond -- or 99.6% of the total -- is an undertaking that is probably too much to ask of the average investor. Lest we forget, we know far less about companies (and their environments) which they operate in.
It looks simple because all you need to do is login and click a few buttons. But I will say that fishing overseas is analogous to our average NS Men trying to complete an Iron Man race; the guy probably has problems passing or attending RT as it is. That said, I'm sure we have our Frodos who journeyed to Mordor, succeeded in their quest, and returned to tell the tale.
As for WB, my understanding is that he implies (whenever this topic is brought up) that the institutions of US which encourage creative destruction is the reason that there will always be great US companies, and US prosperity. Many of the life-changing technology is from US. Does that make US special, or even exceptional? I would think so.
Which is why WB is such a happy camper -- his frequent repetition of 'winning the ovarian lottery' of being born in the US (and being wired to look for value). You don't see many foreign stocks in his portfolio because there will always be good stuff to buy in the US.
It is the same for stocks, as it is for real estate. And for the most part, Singaporeans have done reasonably well fishing in the local pond. Unfortunately, growth has been shifting away from the 'Asian Tigers' to predominantly China, so the returns from the local pond has not been as high as the previous decades.
Given the prospect of modest returns, more Singaporeans shifting their attention overseas, or at least the access to overseas markets have vastly improved. But exploring the rest of the ponds out there, which is 250x the size of the local pond -- or 99.6% of the total -- is an undertaking that is probably too much to ask of the average investor. Lest we forget, we know far less about companies (and their environments) which they operate in.
It looks simple because all you need to do is login and click a few buttons. But I will say that fishing overseas is analogous to our average NS Men trying to complete an Iron Man race; the guy probably has problems passing or attending RT as it is. That said, I'm sure we have our Frodos who journeyed to Mordor, succeeded in their quest, and returned to tell the tale.
As for WB, my understanding is that he implies (whenever this topic is brought up) that the institutions of US which encourage creative destruction is the reason that there will always be great US companies, and US prosperity. Many of the life-changing technology is from US. Does that make US special, or even exceptional? I would think so.
Which is why WB is such a happy camper -- his frequent repetition of 'winning the ovarian lottery' of being born in the US (and being wired to look for value). You don't see many foreign stocks in his portfolio because there will always be good stuff to buy in the US.