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Why the Ultra-rich of the U.S. Only Invest in U.S. Companies?



I was attending a very nice online seminar a few minutes ago and there was this question.


Why do the Warren Buffett's and all the rich people seem to invest in the U S Companies? Obviously the ones that live in the U.S.


Why invest local if you are a very rich person?


The truth is I have no clue why they do it and probably they do it for many money different reasons. But there is one thing that control systems this might be even closer to engineering teaches us and it's the difference between observability and controllability. So when you have a system - any system - and you are able to observe it and you just have to buttons. One is buy and one is sell. There are very few things you can do with that system. And that is what me and you - what most investors or traders or whatever are called to do. They're called to watch prices go up and down and decide if they want to buy or sell.


But beyond that when you have a lot of money like Warren Buffett has and actually own companies which is a different asset class - it's not paper asset. It's a different asset class. A business doesn't have only two buttons buy and sell. There are many other things you can do with it. One important thing they can do is they can influence laws and regulations. If their business will be doing better by having more roads in an area. They will build the road. So they don't have just observability and two buttons, buy - sell. They also have controllability so they're able to influence the system because they know very well the United States framework. It's legal framework and they can influence their own finances. So they create the rules and they also go by the rules that they themselves create. So that's a big advantage when you invest.


And it's not like the U.S. Market is a small market that only has agriculture or is completely diversified and you cannot do anything. No. The US has many different niches where you can decide enough you can find proxies For example if you want to invest in - let's say Africa. You will probably find the proxy to do that in the U.S. And that means that you take lots of risks out off your investment.


At the same time you can control it much better. So on top of that if you add the added observability of having local people your friends and everybody in the U.S. Market also giving you the news people you trust. U.S. market for ultra rich people is the best!


It gives them observability like much better than the Chinese market or anything else or the European and it gives them controllability. So the ability to influence the rules by which their companies have to play.


And don't forget that Warren Buffett wasn't an investor. He's entrepreneur. He is a businessman. He didn't become rich by buying Coca Cola shres. He became rich by buying lots of shares of Coca Cola. Again he went in the company. He controlled the company. He influenced the way it's run. He created large amount of value. And the fact that he became rich through companies like Coca Cola is not because he was lucky. He created this success by running those businesses in a very nice way or at least a very profitable for him way.


So I hope you find these ideas useful.

Thanks for watching.

Thanks for sharing okay


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