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Investing in Israel: Alpha in Emerging Markets

Guest article written for AllAboutAlpha.com – the official publication of the  Chartered Alternative Investment Analyst (CAIA) Association Originally posted at: http://allaboutalpha.com/blog/2012/04/19/finding-alpha-in-israels-emerging-market/ Since the nation’s establishment in 1948, Israel has existed in a perpetual…

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There are a handful of families that own a very substantial degree of the economy including several companies on the stock exchange... The positive effect is through stabilising- it's very difficult for speculators to short stock here or to play tricks on the exchanges... there are simply not enough shares in free-float to do that.

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture

If you are a VC or into angel investing, you can come here and literally just set up a stand in a coffee shop with a sign saying 'looking for start-ups' and you would have a string of people coming in all day long... you could literally sit in that coffee shop from now until next year and you wouldn't get close to touching the sides.

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture

Bill Gates of Microsoft is on-record as saying, '...Microsoft would not function as a company in the way that it does without operations in Israel.' Intel also have a number of substantial R&D facilities here... All the chips also have Hebrew biblical names which are the original names of the chips as they are developed in laboratories here in Israel.

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture

Warren Buffet has only bought one business outside the USA and that's in Israel... During the due-diligence process, Hezbollah landed rockets in the car park of the main factory he was buying! The factory owners said to Buffet that they would totally understand if he wanted to postpone the due-diligence if he perceives a risk and he said, '...as far as I'm concerned any business that's up and running within an hour of having mortars land in their car park is a pretty resilient company...'

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture

What's remarkable about Israel's economy is that in the last few years we have situations which, in any other country, would have been totally disruptive. In the last couple of months alone we have seen literally hundreds of missiles and mortars fired at us from one of our neighbours... The incredible thing is that none of these threats have a measurable impact on our economy!

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture

Bill Gates of Microsoft is on-record as saying, 'Microsoft would not function as a company in the way that it does without operations in Israel.'

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture

As far as I'm concerned any business that's up and running within an hour of having mortar [attacks shows remarkable resilience].

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture

What's remarkable about Israel's economy is that in the last few years we have situations which, in any other country, would have been totally disruptive. The incredible thing is that none of these threats have a measurable impact on our economy!

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture

Israel is not called 'the start-up nation' for nothing. We have great statistics to show the number of start-ups per capita, the number of PhD's per capita, V/C Dollars per capita, Patents per capita and more. Israel creates a huge amount of innovative start-ups which are often bought out before they are even revenue producing!

— Michael Freedman

Mathematician & Topologist, Solved the 4-Dimensional Poincaré Conjecture