Investing at Home vs. Abroad: Why Simplicity Beats Predictions

When I first started investing, I thought the real key to success might lie in spotting the next big global trend. Water shortages, emerging markets, technology revolutions—you name it, I thought if I could just get ahead of the curve, I’d find the next Amazon or the next Apple before everyone else.

The truth is, I quickly learned that betting on predictions is a dangerous game. The future is harder to figure out than most people realize, and even the smartest investors in the world get it wrong. Warren Buffett himself avoided Amazon in its early days because he couldn’t know if it would win out over its competitors. Only once Amazon had proven itself—and Apple was producing massive, predictable cash flows—did he step in. That’s the lesson that shaped my investing style, and it’s one that still guides me today.

The Temptation of Predictions

Macro ideas are seductive. You look at the world and think, “If water is going to be scarce, shouldn’t I invest in water companies? If China’s population is booming, shouldn’t I invest in China?” On paper, these predictions sound logical.

But when I tried to act on them, I discovered just how tough it is to turn predictions into profits. Picking winners is nearly impossible. There might be dozens of companies in a space, and even if you identify the right industry, you still have to guess which company will thrive. That’s speculation—not Rule #1 investing.

As Buffett once joked, Bill Gates told him computers were going to change the world. Buffett’s response? “Fine, you go buy computers. I’m going to go buy chewing gum.” He knew gum had a predictable future. Computers, back then, did not.

Why the U.S. and Canada Have the Edge

The American market has something special: a rules-based system, strong penalties for bad actors, and a massive consumer base. Canada shares many of those advantages. That’s why I’ve often said you should never bet against America.

I’ve seen talented investors pour money into Argentina, India, Turkey, or China, only to get crushed by political instability, inflation, or sudden government intervention. I tried it myself in China and got burned almost immediately when government policies shifted. It’s not that there aren’t good companies abroad—it’s that the risks are far harder to evaluate.

That doesn’t mean international investing is impossible. Danielle makes a great point: if you live in another country, you may have insights that I’ll never have. Local knowledge is a powerful edge. But as an American investor, I don’t need to go abroad to find wonderful companies. There are thousands of opportunities right here in the U.S., and I understand the rules of the game.

The Rule #1 Approach to International Investing

So should you completely ignore foreign companies? Not necessarily. If you live in Europe, Asia, or South America, your daily experiences can give you a unique perspective. You know which products people are buying, which companies they trust, and how stable your markets feel.

But the Rule #1 requirements don’t change just because a company is international:

• You must deeply understand the business.

• It must have a strong Moat (competitive advantage).

• It must be run by honest, capable Management.

• It must meet the Margin of Safety rule and be on sale.

If a company outside your home country passes those tests, then—and only then—it might be worth adding to your portfolio.

Investment Traveling: A Fun but Serious Lens

Danielle and I had talked about the idea of becoming “investment travelers.” We were heading to Ireland and Iceland, and I joked that it would be fun to research a local company while we’re there. Iceland’s market capitalization is currently about 63% of its GDP—a ratio similar to where the U.S. was decades ago when Buffett was scooping up bargains. That doesn’t mean I’m ready to buy Icelandic stocks, but it does spark curiosity.

The point is, travel can inspire ideas, but Rule #1 discipline keeps you from turning those ideas into costly mistakes. I’ve learned the hard way that complexity and unfamiliar systems can trick you into thinking you know more than you do. And in investing, false confidence is expensive.

Keep It Simple

At the end of the day, successful investing doesn’t require predicting the future or chasing global headlines. It requires the patience to wait for wonderful businesses to go on sale, and the discipline to only buy what you understand.

There’s a whole world out there, and exploring it can give you perspective—but the best investing opportunities are usually much closer to home.

If you’re ready to start investing with clarity and confidence, don’t rely on predictions—rely on a proven process. Join me in my Rule #1 Investing Workshop and learn how to identify wonderful businesses, calculate their value, and buy them with a margin of safety.