Aaron Katsman
IsraelNewsletter.com

What could a horse with a 38-1 shot of winning, and a small country with only 7 million people surrounded by enemies, have in common? The answer: They are both longshots and underdogs that have prevailed and flourished despite predictions to the contrary. For those not familiar, the horse Da’ Tara, won Saturday’s running of the Belmont Stakes, spoiling Big Brown’s attempt at winning horse racings triple crown. Big Brown was considered a lock to be the first horse to capture the elusive triple crown in 30 years. Instead, he was upstaged by a horse that no one had paid any attention to.

Likewise, the tiny country of Israel, has flourished despite predictions of destruction. In a great article in The New York Times, Thomas Friedman asks the following question: “Question: What do America’s premier investor, Warren Buffett, and Iran’s toxic president, Mahmoud Ahmadinejad, have in common? Answer: They’ve both made a bet about Israel’s future.” (Continue »)

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Aaron Katsman
IsraelNewsletter.com

A few weeks ago, Zack Miller and myself were interviewed by CNBC’s Squawk Box. The purpose of the interview was to discuss Israel’s accomplishments over the past 60 years. During the interview, we focused on Israeli companies that are publicly traded in the United States, as well as up-and-coming technologies that could potentially make a global impact over the next two to four years.

Investment Destination
Over the last four years, Israel has become a very popular destination for foreign investors. Global giants like General Electric, Microsoft, IBM and Johnson and Johnson are only a few of the companies that have made large investments in Israel by buying local companies. In fact, Warren Buffet, perhaps the world’s most famous and successful investor, made his largest non-U.S. investment when he purchased Iscar, an Israeli company, for $4.4 billion. Buffett has since referred to the purchase as a “dream investment.” (Continue »)

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Aaron Katsman
www.IsraelNewsletter.com

While Morgan Stanley(MS) decides whether to grant Israel ‘developed’ country status for its’ global indices, this decision will confirm what many savvy investors already know; that Israel is a very hot investment destination. Over the weekend none other than Warren Buffett spoke about his Israeli purchase. Buffett said on Saturday that the company’s acquisition last year of the Israeli firm Iscar has worked out better than expected. Buffett said that he had very high expectations when Berkshire struck the deal, and that the metal-cutting-tool maker has “exceeded that in every way.” “It’s been a dream acquisition,” he said.

We all are familiar with the stats. Israel sports the most companies traded on Nasdaq of any country except the US, the billions of venture capital money that continues to flow in, the educated workforce, and I could go on and on. Not to mention the estimated GDP growth of 3.2% for ‘08, a number that most western nations would love to have. What’s so impressive is that all of this has been accomplished in such a short time. What started out as a dream by the country’s founders, has, I am sure, exceeded their expectations.

As Israel looks forward to the next 60 years, I think it’s safe to say that we can all expect more incredible innovation, as well as Israel becoming even more mainstream as an investment destination.

Disclosure: Author’s fund has no position in any other stock mentioned as of 5/5/08.

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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 Israel turns 60 this week, here are a quick few economic stats on the State of Israel:

• Forecast GDP growth in 2008 recently cut to 3.2%. 2007 GDP was 5.3%.
• 7.2 million citizens, per capita income reached about $21,000 in 2007
• In a recent study the IVC Research Center eports that the capital available for investment in the hands of Israeli VCs is now at $2 billion, making conditions ripe for the number of investments we’ve seen in the past couple of weeks. In 2007, Israeli venture capital funds raised a total of $1.1 billion (including venture lending), 21% more than in 2006.
• The Central Bureau of Statistics announced last week that Israel’s unemployment fell to a seasonally adjusted 6.7% in Q4/07, compared with 7.2% in the preceding quarter and 7.8% in Q4/06. This is the lowest rate of unemployment in Israel since the early 1990s and the first time it has fallen below the 7% level
• Spending by foreign tourists in Israel totaled US$2.4 billion last year, 16.5% more than in 2006. (Central Bureau of Statistics)
• Berkshire Hathaway Inc. Chairman Warren Buffett said on Saturday that the company’s acquisition last year of the Israeli firm Iscar has worked out better than expected. Buffett said that he had very high expectations when Berkshire struck the deal, and that the metal-cutting-tool maker has “exceeded that in every way.” “It’s been a dream acquisition,” he said.
• Israel has more companies traded on Nasdaq than any other country other than US. Here is a list of Israeli stocks traded in the U.S.

Zack Miller is Managing Editor of Israel Opportunity Investor, the only subscription newsletter focused on opportunities in Israeli stocks.
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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.

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