I see your point DeepState
Obviously with his size of portfolio he needs to be in the biggest markets.
Let us bring this back to a more realistic level and say that the average ASX investor starts out with a modest
100K portfolio and because they have the right knowledge they can generate a 20%pa return over a 20 year period that is only around 4 million dollars.
Is this portfolio going to move the Australian market?
Have they generated a 20% return?
Did they go overseas?
Would you know there names?
As I said if your portfolio warrants you to go overseas then of course by all means.
For me it is about generating the returns on the portfolio and if I can do it on the ASX for now that is what I will do and keep repeating that process untill it no longer works.
I have said enough on the topic...thanks for everyones contribution it has been an enjoyable thread.
Happy investing / Trading everyone
Actually, the issue arose for the OP, who likely has somewhat less than the capitalization of BRK in personal assets. This isn't to do with outgrowing a market in terms of market impact. It is to do with opportunity, if skilled, or diversification, if not.
Conservatively, even a concentrated portfolio consisting of Australian equities only has a chance of about 1:250k of achieving the outcome you seek. A celebratory dinner at the end of twenty years, if held, could be housed in a very small restaurant. If anything, that figure is a fairly gross over-estimate of the likelihood. Not impossible. Hardly a central case. Of those who manage to pull it off, I'd say we'd hear of at least some of their names. After all, those who pull off a 10-15 year record like this usually charge around 3% pa and 25% of upside for their services. They would have next to no problem, if skilled, raising a mere $50m and receiving fees of $3m per annum straight up and getting to their target wealth a whole lot quicker and with more certainty. That AUM is hardly constraining for a truly skilled investor. At the end of the twenty year period, if sustained, you'd know who they are because they would be mentioned every second paragraph in industry mags and everything they do will be scrutinized and copied to some degree, somewhere.
Right now, having worked in the industry for over twenty years at the end of town which mixes with such people, I know of none. Not even close. I would have thought a person setting out an investment plan ought not just assume they have the skills of the world's richest man and, likely, most successful investor, as a basis for operation. But, that's me and I'm not you.
I agree that this has been an enjoyable exchange. I feel confident that Systematic is data rational given all prior posts he has made. Whatever decision he makes will be peculiar to his circumstances, but will undoubtedly be well considered and, perhaps, richer for this exchange.
For info, it is more likely that the position you have espoused would be related to what is known as a 'home country bias'. It is a tendency for investors around the world to invest disproportionately in their home market, whatever its characteristics. It has more to do with comfort than investment. Nothing wrong with a bit of comfort, but the question was investment related. Over time, these home country biases have been eroded as the investment case asserts itself over the visceral concerns. In Australia, most institutional investors have around half of their equities held offshore...some much more. HNW clients also have a lot held offshore. Even the top professional fund managers usually have some of their personal wealth held offshore. In general, the more comfortable with investment, the less the home country bias becomes for the investor. It is instructive that basically all of the world's richest security traders invest offshore (eg. Buffett, Soros, Dalio, Fink, Yass, Gross, etc..) despite living in countries with exceptionally liquid markets.
More generously, it may have to do with 'preferred habitat' which is where people just have a zone they focus on and become more expert at. A national boundary or an economic sector are natural habitats...as is equity, bonds, currency or property for example, as asset classes. Other habitats exist, these being more common examples only. One of the best I ever came across was a cunning guy who kept strong tabs on the incoming salmon fishermen and arbed the on-shore salmon market. Now that's investing. These, in combination, can lead to pure Australian equity portfolios being the sole exposures in equities. Still, you will find that virtually all professional investors or HNW will find their way offshore in a direct listing sense, with an operating sense being a given.
In Australia, the cyclical nature of the AUD makes unhedged offshore equity exposure particularly appealing. When you add this with the narrow nature of our market and poor quality composition (by and large), you can see the strongest drivers towards offshore investment of some stripe.
FWIW, my offshore equity exposure is approximately 40% of my overall equity exposure. I have other foreign listed stuff which is not equity related in addition to that. I am presently underweight my 'strategic' offshore exposures for various reasons.
Have a good day.