Recently a friend asked “Why don’t you invest more in Australia?” — this post is aimed at explaining my answer to them.
Most Australian investors concentrate their portfolios domestically. The majority of SMSFs, retail investors, and even some institutional funds hold a dominant allocation to the ASX, led by the banks and resource companies. And it’s understandable — it’s familiar, it’s fully franked, and it’s easy to access.
But I believe this local-first mindset leaves enormous value on the table.
1. The ASX Is Overconcentrated, Underdynamic
The Australian market is structurally narrow:
- 60% of the ASX 200 is concentrated in just two sectors — financials and materials
- The banking sector is an oligopoly, with the Big Four having little real competition
- The resources sector is cyclical, driven more by China’s GDP and global commodity prices than by innovation or margin expansion
These businesses, while stable, rarely demonstrate operating leverage or the ability to escape the gravitational pull of mean reversion. Over time, the average investor here earns roughly the market return. The businesses themselves grow slowly, if at all, and struggle to scale beyond Australia’s small population base.
Add to this the well-worn history of Australian companies expanding overseas and failing—and I saw a pattern I wanted to avoid.
2. Software Eats the World — And It Doesn’t Live on the ASX
My strategy is grounded in Peter Thiel’s Zero to One thesis: look for non-contestable markets, monopoly advantages, and companies that are 10x better than the alternative. These are usually not in traditional sectors. They’re in software, data, AI, and platform infrastructure.
And overwhelmingly, they are based in the United States.
But I don’t stop at geography. I don’t just invest in the U.S. because it’s big—I invest there because the companies I choose are:
- SaaS or platform-native
- High margin, high retention, globally scalable
- Driven by extreme network effects
- Monetizing at every layer — not just one-off sales, but recurring revenue, payments, advertising, and ecosystem expansion
Think Microsoft, MercadoLibre, Netflix, CrowdStrike, Palantir, NVIDIA — businesses that dominate their verticals and export their models globally.
3. Global Exposure Through U.S.-Led Platforms
Some investors buy shares in dozens of countries to gain “geographic diversification.”
I don’t.
I buy companies that already operate in dozens of countries. MercadoLibre monetizes across Latin America. Microsoft licenses in nearly every jurisdiction. Netflix is a cultural export. Google and Apple are embedded in the infrastructure of everyday life.
These businesses earn in multiple currencies, benefit from multiple demographic waves, and scale without replication costs. Why chase fragile exposure to small foreign ETFs when I can own businesses that monetize at scale across the entire world?
4. The Exceptions: My Three Australian Holdings
To be clear, I’m not dogmatic. I hold three Australian companies — but only because they fit the same thesis:
- They are software or digital services businesses
- They show signs of operating leverage
- They have either global ambitions or extremely strong network effects
None of them are banks. None of them dig holes in the ground.
I only own them because they behave like global tech companies, not domestic incumbents.
5. The Long View: India and Beyond
As the world rebalances — particularly demographically — I’m increasingly looking at India through the same lens I once looked at the U.S. and Latin America. India has:
- A massive, young, tech-native population
- A growing middle class
- A domestic software and platform economy maturing rapidly
I’m starting to apply my network-effect, platform-first thesis to companies emerging from India, many of which are proving their models locally and beginning to expand regionally.
6. My Investment Philosophy, Summarised
- I don’t invest for nostalgia. I invest for asymmetric, exponential outcomes.
- I want companies with international exposure, recurring revenue, and unfair advantages.
- I prefer platforms over products. Systems over commodities. Compounding returns over cyclical booms.
- And I’ve learned not to confuse proximity with performance — just because a company is based here doesn’t mean it should be in your portfolio.
Final Reflection
Most Australians invest like Australia will always be the centre of their financial universe. I invest like the world is my opportunity set—and I back the networks, platforms, and technological infrastructures that will underpin the global economy for decades to come.
