The entire interview with Cliff Goldstein of AMIDEX is part of our new subscription newsletter, Israel Opportunity Investor. You can find out more about the product and the opportunities we cover at www.israelnewsletter.com.

Can you tell us how AMIDEX got started?
Cliff Goldstein: I’m a lawyer by trade. In 1998 I saw some really compelling advances being made by Israeli technology companies. I decided to go to brokerage firms to see if I could find a way to invest in this ingenuity. I was specifically looking for a mutual fund that invested in Israeli companies. There wasn’t anything out there. After speaking directly to brokers, it was also clear to me that brokers themselves weren’t really knowledgeable about what was occurring on the ground in Israel. I then went to Israeli Economic Mission to the U.S. to complain about the lack of retail investment opportunities.

Why aren’t there Israeli investment products in the U.S.?
CG: I think part of the problem was that there was no benchmark for those Israeli companies trading in the U.S. There is really no comprehensive index because a significant portion of Israeli marketcap trades in the U.S. and in Tel Aviv. There were indices for the Tel Aviv Stock Exchange (TASE) but not one that included New York as well.We decided in 1999 that we could address this barrier and create our own index that included both U.S. and Tel Aviv listed Israeli companies. As this was a time before Exchange Traded Funds (ETFs) had really developed, we borrowed from the protocols developed by the WEB products. We created an index that included 60% of total Israeli marketcap. To get here, we needed 35 companies to get 60% of the total universe. Most of the companies in the initial index were Israeli companies that traded in the U.S. Given what’s transpired over the past couple of years in the U.S. and the growth of Israeli  businesses, we now see the inverse: about 60% of our firms trade in Tel Aviv and the minority in the U.S. It was these 35 companies that comprised the original AMIDEX35. We could then back test historically and when speaking to investors, this really looked good from a performance point of view. When we launched the actual fund in June of 1999, 68% of the companies traded in the U.S. and the remainder in Israel. We thought that the volatility and risk of political disruption would be highest in Israel so we were comfortable with this mix. It’s interesting to think that soon after we had the meltdown of the dot com boom. (Continue »)

Share with others:

Elbit Systems (ESLT) wins a multi-year contract from Lockheed Martin Aeronautics Company to supply new generation Head-Up Displays (HUDs) for the new F-16 aircraft.

Comverse (CMVT) wins Norway deal.

Amdocs (DOX) bought broadband cable solutions provider Jacobs RimellLtd. for approximately $45 million to build its operations support systems (OSS) offering.

El Al raising prices by about 9%.

Israeli firms are profiting on the Facebook phenomenon. Read the Globes story.

Share with others:

Aaron Katsman
www.IsraelNewsletter.com

With airlines around the world struggling with high fuel costs, labor disputes and continued client complaints about late arrivals, who would have thought that El Al, the Israeli  airline would actually be turning a profit?

Airline stocks like Continental (CAL), JetBlue (JBLU) have gotten pounded of late. El Al, which unfortunately only trades on the Tel Aviv Stock Exchange has held steady over the course of the year.

El Al reported earnings of of $40.7 million dollars for ‘07, a huge leap from the $33.9 million loss in ‘06. Revenues also jumped 16% in ‘07 to $1.93 billion.

How can the carrier be doing so well in such a lousy environment? The company was privatized a few years ago and the efficiencies that have been created by getting the government out of running the airline are starting to be realized. Also El Al has some very profitable routes, and they have been running at near full capacity on them. For example if you are thinking of coming to Israel from New York, it’s virtually impossible to get a ticket and if you can get one, you are going to pay a ton of money for it.

But if you want to know the real reason, it’s because they have VOD( video on demand) service on their new airplanes. This VOD is so cool. You can pick from a host of movies, TV shows, music, even play chess, on demand, whenever you want. All you have to do is touch the screen.

Disclosure: Author holds no position in any stock mentioned as of 3/27/08.

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.

Share with others: