A theme that we have been echoing here at Israelnewsletter.com is the fact that many in Israel are living in a bubble and don’t realize that the economic tsunami that has swept the world will cause damage in the holy land. Globes has a great interview with Gemini Israel Funds general partner Menashe Ezra. He says, “Warren Buffett said that we’re facing an economic Pearl Harbor, and I feel that, in Israel, the understanding that we’re at war has not sunk in.” Ezra added, “One of the things that is bothering me is that we’ll experience a local patriotism. I think that globalization will take a few steps back. In Germany and the US, people realize that if they buy a locally made car they’re helping themselves.”

He goes on to say that he doesn’t think that money will be readily available to hi-tech entrepreneurs. “In recent years, we had too much money here. There was a bubble, and entrepreneurs could fund companies without paying a price. They left big companies and got similar salaries at private companies and start-ups. They received stocks and options. This had never happened before in Israel or in the world. It happened because of the surplus of money and incautious behavior, and it created distortions.”

The picture Ezra paints isn’t all that pretty for the short-term future of Israeli hi-tech. On the other hand I think we need to keep in mind that Israel weathered the internet bubble storm, and learned a tremendous amount in the areas of running businesses day to day. I think that that experience will help pull Israel through this global crisis, and the Israeli technology scene will be as strong as ever.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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Guest blog post from New Rules of Investing:

Interesting how an investor relates to a deeper understanding in a portfolio company after making the investment. Roger Ehrenberg is an investor in StockTwits.  As Roger mentions in a recent blog post, StockTwits recently release a new version of StockTwits where users can insert a ‘$’ sign before any mention of a specific stock, effectively tagging the twit with a specific stock to be included on stock pages within the StockTwits site.

Roger recently quipped about a big issue he had regarding Twitter and its ability to pair-up users with the same interests.  “If StockTwits didn’t exist, it would be much harder to find people with similar interests where one could easily be inserted into the dialogue.”

Now, as more vertical applications are being built upon the Twitter platform, Roger forsees a movement “that facilitate[s] the creation of communities that interact on Twitter but can dig in deeper elsewhere (like StockTwits), Twitter’s power as an enabling platform is rapidly coming into view.”

I found it interesting to see that Ehrenberg invested before this greater appreciation of Twitter’s ability to act as a communications platform for more vertical apps written on top of it.  While StockTwits takes users part of the way — in a sense, it recreates the perennially-broken Yahoo Message Boards into a self-selected conversation with only those stocks and users allowed into the conversation  — it will be interesting to see what unfurls next.

StockTwits creates stock pages to aid in stock discovery and promote a hierarchy of experts within the StockTwit community.  Any meta information — most commented on stocks or performance metrics — would enhance the value of all the information being created.  It still doesn’t address the problem, however, of how Joe the Plumber or Bill the Doctor decides how to build and manage his portfolio.

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For those of us following Google’s foray into online finance, it was always kinda strange that Google, the contextual search behemoth, never had any ads on its fledgling financial site, Google Finance.

Until last week.

Yes, folks, last week included that fateful moment when Google schlocked up their pretty clean interface to deliver more ads about investing in tropical hardwood floors or purchasing a financial newsletter “guaranteed to triple my money”.

So, ads are now showing up on the hompage to the right of the market charts and on under the news section on company pages like this one.

I thought this link was interesting.  Google says, “Google Finance provides up-to-date financial information, news, blog posts, and access to lively discussions; these services are entirely separate from the ads on our site. A company’s status as an advertiser with Google does not affect the way data and information about that company are displayed on Google Finance.”

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Today’s post comes from a guest blog, New Rules of Investing:

Institutional investors have powerful tools at their disposal to screen through reams of data.  Part of the institutional investment process entails screening through thousands of securities looking for a needle in a haystack — stocks that fit certain investment criteria.  From thousands of stocks, analysts can filter through a couple of hundred that fit these so called screens.  With a couple of hundred stocks in hand, analysts set out to do the hard work analyzing these companies, comparing them to one another, speaking to management and whatever else hedge fund and mutual fund analysts do when looking at prospective investments.

If I’m a value investor, I’m probably going to use some metrics that focus on Return on Capital (RoC) or Return on Equity (RoE) and Earnings Yield (E/P).  Growth investors might like to compare the price/earnings ratio (P/E) to the actual growth prospects of the stock in question.  There are literally thousands of things to look at.  So, where to start?

As we discussed in the “Piggybacking the Pros“, the Internet is a wonderful place to get information on stocks.  From monitoring actual moves that uberinvestors make to seeing what your peers think of certain firms, the information is out there.  You just need to be able to find it.  Investment Screening 2.0 is all about using screening criteria from super investors like Warren Buffett to find the next big stock.  Think of it as tapping the world’s greatest minds to see what they think of a given investment.

John Reese, a well-regarded entrepreneur with degrees from the two best schools in Cambridge, MA, has created a premium service that is the product of many years of research into the strategies of super successful investment managers.  Having devoured numerous investment books and interviews with the world’s best investors, Reese embarked on an ambitious project to computerize this information.  His firm, Validea, has created an algorithm capable of analyzing thousands of stocks according to differing investment strategies ranging from Fidelity’s Peter Lynch to Berkshire Hathaway’s Warren Buffett and applies screens to the overall market to find stocks that would fit these uberinvestors’ criteria.

John Reese joins New Rules of Investing for an exclusive interview. (Continue »)

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