Belated Happy B-day wishes out to Zack “Juiceman” Miller. We were a bit late with this one but with all the volatility in the markets it sort of slipped my mind. For thsoe of us who take a birthday seriously, it’s a time not only to reflect on the past, but more importantly, to look ahead to the future. What do you want to accomplish in the upcoming 12 months?
For investors the previous 12 months have been a disaster with major market averages off about 25% in the US, and some Israeli averages down more than 50%.
Obviously no one can predict the future, but let’s hope that this coming year for Zack will also be a blessing for investors.
Back when I was in high school, I worked for a company in sales and we used to go around to businesses and sell books. We used to have a sales/motivational meeting each morning before heading out to our territory. At the end of each meeting we started doing a chant. The theme of the chant centered on the word juice. The word juice was an acronym for ‘join us in creating excitement.’
Let’s hope that we can get a bit of upside excitement this year. Happy b-day.
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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.
With prices of Israeli stocks that trade in the US getting nailed along with the broader market, the potential exists for a pick up in M&A among these companies. But a problem exists. It’s not about what price a company may or may not want to pay to buy a company, rather, there is a technical problem. Will there be any investment banks left that can bank the deal? With the demise of Lehman Brothers, by far and away the busiest investment bank in Israel, and the constant rumors of other large US investment banks on the verge of collapse, who is going to be able to fill the void, penetrate the local market and do the deals?
The last time the market experienced a bursting bubble, back in 2000-02, when the hi-tech bubble burst, Israel had an exodus of investment bankers, and as a result, little in the way of M&A took place. Two large firms stayed during that crisis, Lehman and Citigroup. The impact was devastating and it took a few years before we had an upswing in M&A. Let’s hope that the current crisis isn’t deja vu all over again.
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.
IsraelNewsletter.com had the chance to sit down with an amazing, young pair of college students who are leading an innovative initiative that will give college students hands-on exposure to the Israeli economy by learning and by doing. The TAMID Israel Investment Group at the University of Michigan is just the tip of the iceberg for this pair.
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Tell Us A Bit About TAMID Israel Investment Group.
Eitan Ingall, President: This whole idea started because Sasha Gribov and I are both the Presidents of Pro-Israel groups on campus at University of Michigan. Sasha is head of the Hillel group, American Movement for Israel and I am currently heading up a pro Israel political advocacy group called the Israel Initiative for Dialogue Education and Advocacy. We have both noticed a serious void in hasbara (Israel advocacy) on our campus in that there is a serious lack of sustained and substantive interaction with Israel. Sure, anyone can go hear a lecture or seminar for two hours, but what about interacting with Israel in a way that runs a bit deeper?
We also noticed that for all the hummus and pita we were providing the students and for all the guest speakers coming to campus to talk about Israel, no one was talking to the business students. No one was talking about Israel’s economy and speaking directly to the future Jewish business leaders of the world.
So, those two things—the combination of the lack of substantive and sustained interaction, coupled with a serious lack of interaction with Jewish business school students—were what drove us to establish this fund.
What we also understood, however, was that in order to attract business minded Jewish students to Israel, we had to reach them in their space. What are they interested in? What makes them tick? And how do we align these interests with the greater collective of Israel and the Jewish people?
What are their interests? investing and finance. So we came up with quite a simple way to align these interests with Israel—we created a student-led investment group that manages a portfolio of Israeli companies. It’s actually quite simple. These students are all joining investment clubs anyway. They want something they can slap on a resume and something that will give them real life experience with the investment landscape.
So, we said, how about we have them do all this while investing in Israel? Its quite a simple solution.
And so we created the TAMID Israel Investment Group.
The structure of the group is also very simple and is designed to target the specific interests of each student. The Executive Board is made up the fifteen most talented Jewish business minded students at the U of Michigan. We shouldn’t say only Jewish, we do in fact have a non-Jew on the board as well.
How does the board work?
EI: The board is broken down into 4 teams: investing, marketing and PR, IT and fundraising. The investing team has students who are incredibly well-versed in investing—some of them have already begun to manage money professionally. The marketing team is currently led by a girl who recently had a job with Walt Disney’s Marketing department. A member of the fundraising team was the president of his regional USY chapter and has raised tens of thousands of dollars.
The IT team has a few kids double majoring in Computer Science and business—they’re designing a highly advanced and interactive website for the group.
As you can see, we’ve made it a priority that each student is working in an area that interests him or her. This isn’t the usual, mundane form of Israel advocacy. What we’re trying to say with TAMID is, “This is Israel and all that it has to offer you. This is Israel’s economic environment.” Plain and simple. In a way that students can relate to and enjoy. TAMID brings a perspective on Israel that these students can fit in with their professional aspirations.
The board also has the opportunity to interact with four support bodies.
The Advisory Board is made up of top Israeli executives and fund managers who have commitment to interacting with students once every financial quarter. This gives students an opportunity to interact with Israelis who have built the economic culture of the country and will leave a lasting impression on the students.
The Resource board are American and Israeli lawyers and accountants who are working to establish and maintain the infrastructure of the organization
We are working with three U of Michigan business school professors who are overseeing the general operations of the group and are assisting with the educational curriculum.
We will also be working with Israeli students at Israeli universities to align our generation of business minded students. Students will have the opportunity to interact through various forms of media and will work together on various projects.
Please explain a bit about how it all works.
EI: There are three phases to the fund: Education, Investing, and Fund Management
During the educational phase students are engaged in a curriculum that teaches them about general investing and Israel-specific investing through a series of seminars, lectures, guest speakers and interactive activities. It is during this phase that students will have their first interactions with Israel’s economic landscape in an effort to prepare for investing.
Next, the students make the initial investment, and thus begin investing the portfolio.
We are in the process of raising $1,000,000 [ed. Fundraising activities are taking place through TAMID's channels. IsraelNewsletter.com is not party to these activities]. Professional Israeli account managers will manage half of this in order to reduce risk. These account managers, however, have committed to maintaining a high level of interaction with the students in order to teach them about the Israeli economic environment.
The other half of the portfolio will be managed by the Executive Board, led by the investing team. They are working to create a conservative growth investment strategy that will allow the students to interact with Israel’s economy. The students will use what they learned from the educational phase of the program coupled with their interactions with the professional account managers, to successfully manage this half of the fund.
For the duration of the program, students are actively managing a portfolio of Israeli companies. They are making day to day investment decisions while interacting with Israeli company executives to be constantly learning about Israeli markets. The Executive Board thus becomes fully engaged with Israel’s economic environment.
So if the principal of the fund comes from tax-deductible donations, not investments, what do you plan to do with the returns?
EI: The fund is a perpetual fund, hence the name TAMID. It stays on the college campus and the money stays in the Israeli market. Therefore, a large portion of the returns are re-invested in order to grow the fund.
The remainder of the ROI will be used to establish the TAMID Business Scholarship Fund, where we will be providing financial compensation for business minded students to work in Israel. We have begun working with Israeli companies to set up infrastructure to house 1-2 business students for an internship. Our dream is that instead of working one summer for an investment bank in Manhattan, students will come work in prestigious financial internships in Israel, which they can use to further their own professional aspirations.
How did you elect students to the board?
EI: We sent out an initial press release in February of 2008. After receiving an overwhelming number of inquiries, we set up formal interviews with the most qualified students over the course of the following two weeks. We then selected 15 of the brightest, most experienced students for TAMID’s Executive Board. It is a prestigious group of students. These are the students going on to top jobs in the American financial sector and working their way to becoming business leaders and top executives.
How is this an answer to divestment?
EI: The initial idea for the group actually came out of a response to divestment. As two leaders of campus pro-Israel organizations we knew resolutions calling for the divestment of Israel are brought before the regents of the University of Michigan. To counteract these resolutions in the past, students have launched pro-Israel flyering campaigns and invited high-profile speakers to campus to speak about Israel. However, we felt none of this was enough and we felt we could come up with something more creative and more effective that would have a profound impact on our generation of Jewish college students.
So, at 4am in the study lounge, we looked at each other and said: if they want to divest from Israel, we are going to invest in Israel. Not only are we going to invest in Israel financially, but are also going to invest human capital in the future of the State of Israel.
Do you see this as something that could work beyond the University of Michigan?
EI: Absolutely. We have purposely created an extremely scalable model—TAMID Michigan is just the pilot site. Within the next year there will be a TAMID UPenn, TAMID Harvard, and TAMID Northwestern. Within the next five years, there will be a TAMID National Organization which will be setting up sites at top universities across the U.S., each site managing its own $1 Million portfolio of Israeli companies. We are talking about millions of dollars being invested in the Israeli economy and hundreds of students having sustained, substantive interaction with Israel in a way that has never been done before.
What’s the end game?
EI: TAMID will lead a paradigm shift by creating a new status quo where business students across the nation are active stakeholders in the economic growth of Israel. This organization will be a bridge between the passions, interests and aspirations of American business students and the Israeli economy which, until now, had been inaccessible to these students. As such, TAMID will realign the mismatch of personal and collective by engaging the personal and professional goals of American Jewish business students. TAMID has made Israel’s economic landscape accessible to the full time student by utilizing the tangible incentives of professional opportunities, experience and success.
We are building a massive network of business minded Jewish students and exposing them to Israel in an unprecedented way. Our vision is create a sustainable, highly interactive ecosystem of businessmen working in symbiotically with Israel’s economic landscape. We are thus opening direct access to a pipeline of the next generation of Jewish philanthropists and cultivating the next generation of investors in Israel.
Why invest in Israel/what makes Israel interesting as an investment destination?
EI: Israel has a flourishing economic landscape. Whether it is in high-tech, life sciences or consumer goods, Israel is pioneering a business culture of entrepreneurship and innovation. Our goal is to get people to recognize Israel beyond just a distant place to support through donations and activism.
How do motivated college students in Ann Arbor research small cap technology firms in the Middle East?
EI: Thanks to research vehicles, companies and organizations on the ground in Israel that we have partnered with, the research will be easy and engaging for the students. Additionally, the University of Michigan has a state of the art virtual investment lab with advanced research programs, which the executive board will be using during the educational phase and to assist in fund management.
Disclaimer: IsraelNewsletter is not affiliated with the TAMID Israel Investment Group and this interview should not be construed as an offer or a solicitation for TAMID.
Of late, the Bank of Israel has maintained that due to slowing global growth, they believe that inflation will be kept in check. Many market participants have accepted that view. Now along comes the Economist Intelligence Unit (EIU), and challenges that assumption.
According to a report in Globes, ” ..But the EIU believes inflation in Israel will remain high, and says that “the Bank of Israel’s monetary policy will continue to be contractionary.”
While to many this may seem to be an argument of little importance, it actually may potentially determine the direction of both local interest rates and where the shekel trades in both the near and mid-term.
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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.
