Special thanks to Bizzywomen.com for this post:

In a court decision among the most progressive in the world, the Israeli Supreme court ruled that childcare can be used as a tax deduction.

According to Globes: “The legal battle began with Adv. Vered Pery, who sought to deduct payments to a daycare center for her son in the tax year in dispute. The assessing officer did not allow the deduction of the childcare payments from her income, and Pery appealed to the District Court.

The Supreme Court decision was written by Judge Eliezer Rivlin. He accepted the District Court’s stance, and held that if the child were not supervised, Pery would not have been able to earn any income at all. Therefore, he decided, the expense was not just a condition for going out to work, but an expense required in order to earn income.”

This case could be the driving force for more women to enter  the workforce. A major problem facing Israeli women was that much, if not all, their salary went to paying for daycare. Now, they are free to work as the please knowing that they will not be taxed for making the decision to go out and work.

When you think about it, this really is a huge victory for women all over the world.

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Thanks to Bizzywomen.com for submitting this article.

Over the past 14 months, drastic market falls have caused many investors to lose significant portions of their savings. The U.S. market has fallen by more than 40%, while international markets are down by 60% or more in many cases.

In this scenario, one of the questions that I am most frequently asked is, “How do I make my money back?” My answer to this question is simple - don’t try to make your money back. If you try, chances are that you are going to take unnecessary risks and end up losing even more money. For this reason, the best advice may not be something that many investors want to hear. It is probably better to forget about the past and concentrate on the future. While the markets are getting hammered, stocks are selling at a discount. Although no one can predict when the market will hit bottom, buying at a 40% off discount is something that rarely happens.

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Asset Allocation

Creating your asset allocation, or the mix of stocks, bonds and cash in your portfolio, is the single most important task that an investor has to face. Many studies have shown that the proportion of stocks, bonds and cash held in a portfolio has a greater effect on its returns and volatility than the individual investments that are chosen.

That is why after assessing one’s investment goals, it’s of the utmost importance to create an allocation that can help you achieve the aforementioned goals. Once you have fixed your asset allocation, you can start considering what to buy. “Be greedy when others are fearful,” is one of investor extraordinaire Warren Buffet’s favorite sayings. Many economists believe that the United States is in the midst of a recession. While this does not sound good, there may be a silver lining for investors. Though you need to always remember that past performance is no guarantee of future returns, consider this: According to a report in Smart Money, “Stocks tend to rebound before the economy does. Over the past nine recessions, the S&P 500 has gained an average 13% during the second half of the downturns and another 13% the year after they ended. Even during the Great Depression, the S&P rose 33% from the market’s trough to the end of the recession. And while it’s folly to try to predict a bottom, with the market down 40% from its 2007 high, it may not be far away.”

Buy Low/Sell High

During more stable times, clients ask me which stocks I think may have big upside potential. Usually, they are looking for small companies that have the potential to move up rapidly. I like to refer to this as “being a hero.” These clients expect me to wade through loads of information to pick out a company that no one has ever heard of. (Whether that is realistic or not is for another column!) In today’s climate, however, there is no need to be a hero. It is not necessary to speculate on risky companies. It is enough to look at large companies that continue to pay or even raise their dividends as a place to start. These are usually companies that make products that we all use in our day-to-day lives. For example, come what may, consumers are still going to use shampoo, toothpaste, soap, and other necessities.  Obviously there is no guarantee that your money will be doubled within the next week. But if you have a long-term investment horizon and you can withstand continued volatility, then investing in stocks now will have the potential to reward you in the future and help you rebuild some of the wealth that you have lost.

With the current market volatility, it is worthwhile speaking with your financial adviser to make sure that your portfolio is well designed with your financial goals in mind. Then, if your financial plan allows for it, have a talk about trying to take advantage of a once-in-a-lifetime opportunity.

Please see our Disclaimer HERE.

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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Over at BizzyWomen.com, I came across an interesting read written by Miriam Schwab, talking about web presence and the importance of a corporate website. Schwab writes, “Today it is generally agreed that a business is not serious if it does not have a website. People look to websites to find out more about businesses, see how the company presents itself, and what are the services that company provides. People also want to be assured that the business has other, satisfied customers by viewing client lists and testimonials.”

Today, the Israeli financial daily Globes has a piece ranking the websites of Israeli companies that trade in the US. Globes is looking to find out which websites provide useful and up-to-date information for investors to enable them to learn essential information about a specific company, and make informed investment decisions.

The article says: “Being an investor in the age of the Internet is a cinch. If you are an investor, either private or institutional, and come across a company that could be an attractive investment, one of the first and easiest things you can do (aside from calling his broker), is to navigate to the main page on your favorite search engine, type in the name of the company in the search field, and then log on to its website, if it has one. When you gets there, you should find all the details he need: the company’s line of business, who its CEO is, how he or she got the job, the company’s revenue and profit for the latest quarter, who sits on its board, who are the analysts covering it and how to get in touch with them.”

The report basically admits that this is information used for the most part by retail investors, as institutional investors have plenty of tools, like Bloomberg, and rarely will take a look at a corporate website. In all honesty, I am not sure how often most retail investors will go to a corporate website to get more information. I always felt that most retail investors were happy with the information provided to them on Yahoo Finance. How many retail investors care about how a CEO ‘got the job’?

The Globes survey was looking for basic information that should be available to investors, such as contact information of analysts covering the firm, email addresses of at least someone in senior management, and up to date press releases and financial reports. Coming out on top was Voltaire (VOLT), which develop and design server and storage switching and software solutions for enterprise IT networks.

Near the bottom of the list are companies that are lacking some basic information on their websites. TAT Technologies (TATTF) does have an investors relations section and from there you can click on financial reports. Only problem is when you click on it it says “no items available.” Another company near the bottom was G. Willi Food international (WILC). On their website you can’t find out anything about senior management, including who they are. But in case you purchased some of their noodles, rest assured that on their navigation bar they have a recipe section, and you can get a tasty recipe for noodles and vegetables.

Hey, G. Willi could incorporate some social networking into their website and have readers submit and rate all kinds of recipes. Who cares about who is CEO, I’m hungry!

Disclosure: Author’s fund has a position in WILC, he has no position in any other stock mentioned as of 8/05/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

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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As we finally get to see some decent earnings coming out of Israeli companies that trade in the US, it seems that these companies have all read the same ” Prop up your stock” book. Can you say stock buyback? Companies like Commtouch (CTCH), Alvarion (ALVR), AudiCodes (AUDC) are among Israeli companies that posted good earnings, raised guidance and announced share buybacks.

I know that share buybacks are ‘tax efficient’ as well as they fatten EPS numbers, but how about doing something radical for investors?  Something like paying a dividend, or investing in growing the company. Doesn’t a stock buyback just mean that the company has nothing better to do with their money? Give some of your profits back to shareholders. Hey, there is an idea! For a great analysis of the pros and cons of buybacks, check out economist Stefan Karlsson’s blog.

All 3 aforementioned stocks have gotten nailed this year, so why not reward investors by paying a dividend. After all if we are only worried about being tax efficient, then just sell all your losing stock and take the tax loss. BTW nice article over at Bizzywomen.com, explaining tax losses.

After all I guess after the many Israeli companies that have provided lousy earnings results, we should just be happy that these companies beat estimates. That’s reward enough for investors.

Aaron Katsman, IsraelNewsletter.com

Disclosure: Author’s fund has a position in AUDC,ALVR. He has no position in any other stock mentioned as of 7/30/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

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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