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Idea for a new portfolio - Israeli stocks



May 20, 2008 – Comments (8) | RELATED TICKERS: ESLT , TEVA , NICE

I recently read an interview with one of Israel's wealthiest industrialists in which he discusses why Israeli startups are so successful. His thesis is they come from the same mold - dependence on technological capability, and management honed in the military. From what I've read about Israeli educational levels this makes sense. They have the highest per capita college graduates in the world, and some 20% of them get PHD's. So I've put together a list of companies I either own, picked in CAPS, or have done enough research on to make my own ETF. (Wish we could actually do this in CAPS). I would appreciate comments from all Fools with insight into these companies.

ESLT,     CRNT,     TEVA,      ALVR,      CEL,     ELOS,     NICE,      PTNR,       MLNX,     MAGS,      GIVN,     CTCH,     BSI,     DK,      EZCH,    NSTC 

8 Comments – Post Your Own

#1) On May 20, 2008 at 11:32 AM, YoungMoneyJB (88.79) wrote:

out of all those I would pick TEVA. They are the biggest maker of generic drugs in the world! Insurance companies have shown in the past with medicare that they are unwilling to pay for brand name drugs when generics are available. If Universal healthcare becomes a reality, you can bet that it will be generic drugs which become available. TEVA has the best economies of scale, legal team, and production facilities out of all the generic players. And yea Israelis are the Spartans of the modern era.

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#2) On May 20, 2008 at 11:37 AM, wolfhounds (66.16) wrote:

I've owned TEVA longer than any other Israeli stock in my portfolio for the very reasons you state.

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#3) On May 20, 2008 at 1:11 PM, abitare (30.07) wrote:

Israel and Japan has two of the worlds most productive people. You could write a books about it. But that does not necessarily translate into stock market returns. The Japanesse real estate, stock market, and yen declined for over 15 years?

Israel is in a state of war, peace is NOT on the visible horizon. It is under constant threat from its' neighbors. Also like Europe the Muslims are breeding at far greater rates then the local populations. 

If you are buying Israeli stocks I would expect a high risk / reward premium.  

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#4) On May 20, 2008 at 1:51 PM, wolfhounds (66.16) wrote:

Since Israel has been at war for 60 years, it has adapted remarkably. It didn't stop Buffet from investing there. Moreover, most Israeli companies derive business from exports or from overseas operations. You are correct that the risk reward premium must be there, and I think it will be.

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#5) On May 20, 2008 at 2:30 PM, abitare (30.07) wrote:

Since Israel has been at war for 60 years, it has adapted remarkably.

So have Israel's enemies, hense the non stop rocket attacks and sucide bombers. Hostile action by Israel, creates a hostile reaction by the Muslim community. As they breed and Israel's population declines, I cannot see how this will end well.  

It didn't stop Buffet from investing there. 

I suspect Buffet might have some political motives beyond Return on investment. Just a WAG.  

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#6) On May 20, 2008 at 2:31 PM, abitare (30.07) wrote:

For the record,

I have no idea, whether Isreal is a good place to invest or not. I think Asia might be a better place.  

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#7) On May 20, 2008 at 2:43 PM, wolfhounds (66.16) wrote:

I won't argue whether asia is better than Israel, but Israeli companies sell big time to asia. You may not remember the consternation caused in the White House when they sold state of the art rockets to the Chinese (obviously before we loved them so much). Israeli companies have been doing business in asia and africa for decades, not to mention little noticed trade with Lebanon (often in jointly owned companies), newly established relations with Qatar, trade with Morroco etc. I think Think I'll take my chances with Israeli companies since arab states think likewise. Money is money to them all, and they do want what Israel offers which puts hostile Muslim at a disadvantage.

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#8) On May 20, 2008 at 3:04 PM, devoish (65.04) wrote:

I like ITRN for a lot reasons, mostly wireless meter reading, their highway work and expansion into Brazil where the lawmakers have recently mandated vehicle tracking devices in all  cars. No guarantee they will get a contract but there is a good chance.

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