How bad did I do in 2006? (Corrected)

I want to analyze my financial performance and to extract useful conclusions. I have no secrets, and certainly not for Mas Hachnasah (Israeli Income Tax Authority), which has access to every bank account and business transaction, and their computers can and do cross check every single farting with the tsoulent that caused it. In addition, they receive 23.4 million anonymous letters per annum, each on supplying detailed information on the indecent, pornographic money the neighbor, the boss or the collegue, the friend or the enemy, the husband or the boyfriend is making. It is also vox populi that they operate a 7.2 million strong network of eager voluntary informers in a population of 7.1 million (some work two shifts). This I cannot avoid, but from there to indiscrete blogging a distance must be kept.

From Jan 1, 2006 to Jan 1, 2007 the portfolio I am analyzing grew by 28.5 % in US Dollar terms.

This growth was formed by: 9% appreciation of the Israeli Shekel as against the US dollar; 9.66% increase of the shekel value of the portfolio on TASE, and 9.84 % growth be addition of fresh monies (dividends paid by portfolio stocks, fresh savings and so on).

In the original note I was satisfied with the 9.66 % growth of the portfolio. But I was misleading myself, and not the first time. Since the beginning of the year, the TA-25 Index has risen by 12.5%, rounding off a gain of 180% in the past four years. The second, more sober overview of my peformance that I am doing now, shows that I did worse than the index.

Which of my investments failed? The worst was TEVA Pharmaceuticals. Teva has ended 2006 as the worst of all the Tel Aviv 25 Index stocks, and one of the six poorest performing stocks on the Tel Aviv 100 Index, with a surprisingly sharp negative return of 35%. This means that it has underperformed on the index by almost 50%. A quarter of my money was invested in TEVA.

The second worse was Makhteshim, which lost 11% of its worth in 2006. Since its price went down so much, I actually increased the number of units I hold. The new CEO Mr Bigger has a good record as resucitator of agonizing companies. It was a hard year for Makhteshim and its investors.

Thirdly, I held all year a Mutual Fund based on Israeli industrial stocks. It gave very little and two weeks ago I sold it.

My active management of the portfolio intensified along 2006. I added some 10% fresh money, making investments that were successful. Early the year I bought Walla which doubled its value in no time. Understanding the potential of the internet, I actively searched for exposition and bought Internet Zahav, which also is a success.

I also invested early in Ormat, an alternative energy company, much before the current interest in the field. It also doubled it value.

Three or four months ago I started to experiment in the derivative market, the optziot. I was lucky and now I have about 1% of the portfolio invested in optziot. I intend to increase this percentage, but the management of optziot requires work, sometimes three or four hours a day. It is very demanding.

Two weeks ago Arik, the bank adviser, called me to say that I need to refresh my portfolio. We sold the mutual fund and bought two index funds: Kesem Sin, linked to Chinese companies (which already earned 17%) and Kesem Yeter, linked to TASE's second rank companies (which is losing 7%). I have also some 1.5 % in cash, ready for opportunities.

My strategy in 2007 will be re-evaluate my TEVA and Makhteshim positions, both are in the generic business, and to develope my high-risk derivative operations up to the 10% of my portfolio. I read that if a speculator sleeps well, he is not risking enough. I do sleep well, so 2007 should be a year when I start sleeping less and taking more risks. And not only with regards to this portfolio, but in general. Already I am reducing my alcohol and food intake, and looking around for larger and more difficult engineering commissions.

No New Year resolutions, I said yesterday and already I am making them by the dozen.

I have a bad cough, so I am going to bed. The pic is the class visiting Raanana Wastewater Treatment Plant, with Chaim Kokosh explaining its operation. That mighty bald head is me.

Trade-Off Key between Today vs Tomorrow

Certainty decreases exponentially along the time axis. Ergo, to delay the enjoyment of time, resources, relationships, etc. is a very risky proposition, the more we postpone the less sure (exponentially less) we can be of actually enjoying it.

(Given my prodigious age, having lived more than any person in my family except my Mother and Aunt, anything further than 2016 is pointless, absurd, meaningless.)

Another point is the trade-off value of our time and effort today as against the future. Everything points towards improvement of human health and economic efficiency, things will be better and cheaper, our work - thanks to better organization and better technologies and better machines - will be much more productive, and we will be able to trade off our work for more value. This trend has been in effect now for 500 years at least and it is accelerating, so it makes sense to enjoy today and work tomorrow.

The trade-off actions between different point in time are risky and as said, exponentially more risky and uncertain along the time axis. I know what can I get from one thousand dollars today, but it is difficult to know how much I'll get from the same thousand dollars (interest included) ten years from now. Probably, much less than today.

Having convinced myself of the truth of these reasonings some ten years ago, I decided to work and to save less. I pondered that in the future, I and everybody else will be much better off. Moreover, it makes no sense to sacrifice in benefit of future generations, as they will be much better of than I am today. The ideology of sacrificing this generation for the future of humanity has been a tremendous failure.

All is right, I made that resolutions and I gave up easily steady employment (I considered it was not worth fighting for it) and employed myself in writing books and private engineering practice. I also took some vacations, touring Great Britain, Scotland, Hungary, Germany, Austria.

The fact is that I was unable to behave as I understand was my best interest, and keep working too much and saving too much and amassing capital, exactly like my Grandfathers did in Hungary. It seems that I am wired to do that, work+save+amassing capital, and it is not a rational decision that I can make. In fact, I enjoy doing it and would do it even if it unnecessary. How can a rational person behave in an irrational way? I can. For example, I overeat and cannot do better.

This girl is the Queen of the Constanza wine producing region. Conclusion: If you cannot do else, enjoy it. I am working and saving and hoarding capital, not because it is the best thing to do, but because there nothing else I can do. I like fish and red dry wine, so I enjoy it. In fact, I am drinking Murfatlar Cabernet Sauvignon Red Wine, made in Constanza, Romania. It is the cheapest wine sold in Kfar Saba, and in my opinion, it is the best one. I have very pedestrian tastes. When in Costa Rica, I became hooked on cigars. I was very rich and could afford the best cigars, but I discovered that I liked the cheapest, smelliest, "worst" cigars smoked by the poorest costarrican people. I used to go to San Jose's central market and befriend the poorest and drink their cheapest aguardiente and smoke their blackest, alquitran cigars. I also loved the cheapest 10 $ girls. I am not a miser, and the most expensive girl was maybe 50 - 60 $, the difference was meaningless for me. I truely, honest-to-God have popular, vulgar, cheap tastes.

I am quite content with my life as it is, so most probably 2007 will be like 2006 and 2005 before. No New Year resolutions here. I shall now drink another glass of this reddish-black acidic, fruity Murfatlar, while enjoying Chava Alberstein singing in Yiddish. Le Haim!

The illustration is the bridge-dragon money, one of the earliest in Eastern Asia.

The Shocking Korrherr Report

Surfing the internet I hit this Korrherr Report and saved it to read it when I have more time. Which normally is never. The Korrherr Report is a secret statistical evaluation of the Final Solution by The Inspector for Statistics at the Reichsführer-SS. The first thing that hits the reader, 64 years after its writing and in an environment then unimaginable, is the seriousness with which the issue was treated. Nothing to do with the charlatanism of the German "Race Science", at least as it is perceived today. Korrherr's method is scientific and quantitative, the presentation is dry and emotionless, and shows a paranoid degree of control in the detail and the execution of the "solution". Reading the Korrherr Report, the argument that the Holocaust was a more or less spontaneous development, is untenable. Moreover, even the thesis of "Hitler's willing executioners", that the Holocaust was carried out by low-quality, undisciplined troops that were happy to have been assigned riskless mass murder campaigns instead of front service against Russian troops, becomes ludicrous when examining the report. There was nothing unplanned or unattended in the de-Judeization campaign under Nazi power, that they executed a very consistent policy designed to produce a Jew-free Europe in the shortest time. The Nazi State controlled and followed paranoidly what the Jews were doing, to the point that German State Statistics registers movements at the individual level (for example, number of Jews released from Auschwitz concentration camp = 1.0).

THE FINAL SOLUTION OF THE EUROPEAN JEWISH QUESTION
==================================================

Statistical Report

C o n t e n t s:

I. Introduction
II. The Balance of Jews in Germany
III. Jewish Population Weakness
IV. The Emigration of Jews from Germany
V. The Evacuation of the Jews
VI. The Jews in the Ghettos
VII. The Jews in the Concentration Camps
VIII. Jews in Penitentiaries
IX. The Use of Jewish Labor
X. European Balance of Jews

-----

I. INTRODUCTION

In order to make a balance of the results on the way to the solution of the Jewish question it is necessary to determine the number of Jews and its development. The contradictions in the data about the number of Jews, however, make necessary an introduction in the sense that numbers about Jewry are always to be taken with special reservation and can lead to wrong conclusions without a knowledge as to their source and as to how they came about.
The sources of mistakes lie mainly in the nature of Jewry and its historical development, in its millenary restless wandering, the countless admissions and withdrawals, the efforts at assimilation, the mixtures with the host peoples, the efforts of Jews to avoid registration and finally the wrong or wrongly interpreted statistics about Jewry.

Furthermore statistics – partially as a statistical makeshift, partially due to the wide coincidence between Jewish faith and Jewish race, partially in ignorance of the idea of race, partially due to the religious thinking of the respective time – have until lastly recorded Jews according to their religious confession and almost never according to their race. The recording of the race requires a training of many years and also ancestry research. It also turned out to be difficult mainly in the southern and eastern countries, given that despite all coincidence a uniform Jewish race was difficult to delimitate. The adhesion to Mosaic or Israeli faith in turn is no fully valid proof, given that due to the former Jewish missionary movement with its taking in of heathens and Christians, and also due to "conversions" to Jewry and mixed marriages in more recent times, there are not a few confessional Jews of non-Jewish race, while on the other hand forced christianizing and the number of baptized Jews that again increased in the last century, together with the number of non-confessionals of Jewish race, brought down the number of Jews. In 1893 Leroy-Beaulieu estimated the loss of Jewry to Christianity at four to ten times its present-day adherents; according to Maurice Fishberg and Mathias Mieses three times the actual number of Jews have merged with Aryan Europe. Even Hans Günther estimates the number of Jews in Germany at double the number of Jews of Mosaic faith who have German citizenship. The Lithuanian Jew Brutzkus even goes as far as to consider the Jews of Berlin as more pure Europeans, according to the composition of their blood, than the Germans of Berlin.

.

This introduction rises several issues. Korrherr states that four to ten times of "Jewish blood" was running diluted in "Arian bodies" than concentrated in "Jewish bodies". Exterminating the Jews, therefore, would have affected only a quarter or so of Jewish genetic presence in Europe. Moreover, the mention of Jewish missionary movements in the past, and mass conversions into and out of Judaism, gives the impression that Korrherr thought that Jewish genes (he did not use this concept, quite unknown at his time) were distributed unevenly, in many cases more represented in the "Christian" than in the "Jew". It is incredible that this position is so clearly set out in an official SS report, when Nazi ideology and propaganda maintained that Jews were something very peculiar, easily identified, an evil totally different from good European stock to the point of being opposite - warring in fact - races, to the point of the Jewish not being fully human. Apparently, the inner circles of the SS did not believe in racist nonsense and were prepared to accept an official report that contradicted the Party's public position. I can also imagine that not only Heydrich (and Hitler) were suspected of having Jewish blood, but many other "good" Nazis and Korrherr is trying to protect them.

III. JEWISH POPULATION WEAKNESS

The balance of Jews in Germany shows an extraordinary excess mortality that is due not only to a very high mortality of the Jews, but also to the marked scarcity of births. Thus the natural population development in the Old Reich including the Sudetenland from 1933 to 1942 has been as follows (according to the estimates and data of the Reich Association of the Jews in Germany, given that the counting by confessional Jews is much more complicated and unreliable x:
____________________

x Without Lemberg district with around 700 000 Jews.


Births and Deaths of Jews in the Old Reich (calculated and estimated until 1939)

Years Births Deaths Excess mortality (-)

1933 3 425 8 925 - 5 500
1934 2 300 8 200 - 5 900
1935 2 500 8 100 - 5 600
1936 2 300 8 000 - 5 700
1937 2 100 8 000 - 5 900
1938 1 000 7 448 - 6 448
1939 610 8 136 - 7 526
1940 396 6 199 - 5 803
1941 351 6 249 - 5 898
1942 239 7 657 - 7 418

1933-1942 15 221 76 914 - 61 693

The excess mortality from the day of taking over of power (30.1.1933) until 1.1.1943 in the Old Reich including the Sudetenland is 61 693; this is the result of 14 921 births versus 76 114 deaths. While the migration on the one hand and the absence of recording in the first year and deficiency of recording since especially in regard to deaths in the concentration camps by the Reich Association of the Jews on the other hand leave room for many errors, the approximate overview shows a constant number of deaths despite the reduction of the number of Jews. Jewish mortality thus amounts to 80-85(against the European average of 10 to 15) in 1000 (in the calendar year 1942).
What is further to be noted is the decrease of births, which by far anticipates the decrease of the number of Jews. The Jewish birth rate in the Old Reich thus amounts to only 2 1/2 in 1 000 in 1942. Also in the Ostmark between 1.3.138 and 1.1.1943 there were 15 188 Jewish deaths for only 679 Jewish births. In the Old Reich there were only 14 Jewish children born in December 1942, 7 and 8 in January and February 1943, respectively. It must in this respect be taken into account that Jewry has topped the civilized Western states in lack of births since decades, as can be seen on hand of the confessional statistics of births. The Jew Felix Theilhaber already in 1911 pointed to the “Demise of German Jewry” resulting from this, which was only covered up by the constant influx of Eastern Jewish blood. This phenomenon was only partially related to the over-aging of European big city Jewry: It was mainly due to a real lack of life strength.

This "real lack of life strength" was very evident not only in Germany but in Holland, Italy, France, Austria and Hungary, where Jewish population had been falling since 1900. From anecdotical evidence I dare to extend this catastrofic decadence to the Soviet Union, to the fastly assimilating Jewish centers of Warshaw and other big cities. Orthodoxy was retreating fast all over Eastern Judaism. But the numbers quoted by Korrherr show a total collapse of the will to live, and the development of suicide as the first cause of death among Jews. The picture painted by the Korrherr Report shows a demoralized "aboriginal" people that has lost its self-respect and will to live, much like the picture described the Spaniards after meeting the native American peoples. I am not convinced that the Holocaust was, partly, an internal Jewish collapse, given the unbelievable, passive acceptance of fate by the victims, the scarcity and weakness of organized emigration and hatzalah projects, and the almost inexistence of armed resistance. The killing of six million persons by arms was not done in one day, and it was not done at night and underground. The extermination project was publicly announced several times, the concentration of the Jews was done in an orderly, bureacratic manner in plain daylight, and it was no secret that mass killings were being carried out. In many place, the Nazis asked the Jews to meet in the central plaza of the village or town, and they walked them down on the Main Street to the cemetery or a natural depression like in Kiev, and gunned them down. Yet armed resistance was minimal, in the Warshaw ghetto and some partisan bands. Dont misunderstand! Auschwitz was not a Jewish project. It was a Nazi, a German, project. The Jews were the victims, unarmed and unresisting victims of savage extermination.

But the internal collapse of European Jewry did not start nor end with the Nazi regime. It surely continued in the Budapest Jewish population (it would be unexact to call it a community) after Liberation to even today. My own milieau was marked by unwillingness to reproduce: I am an only child, as were most of my schoolmates. People of my parents age stopped voluntarily having children, and I heard many times that "it is an irresponsability to bring children into this world". In fact, the silent dyeing out the Jews continues forcefully in Ukraine and Russia, where Jewish deaths dramatically outnumber Jewish births, in the same order of magnitude registered by Korrherr in the Old Reich during the Nazi regime.

X. The Balance

The total number of Jews in the world in 1937 is generally estimated at around 17 million, thereof more than 10 million in Europe. They concentrate or concentrated (!) mainly in the former Polish-Russian areas occupied by Germany between the Baltic Sea and the Gulf of Finland and between the Black Sea and the Sea of Azov, further in the centers of commerce and the Rhine area of Central and Western Europe and on the coasts of the Mediterranean.

From 1937 to the beginning of 1943 the number of Jews in Europe, partially due to emigration, partially due to the excess mortality of the Jews in Central and Western Europe, partially due to the evacuations especially in the more strongly populated Eastern Territories, which are here counted as off-going, should have diminished by an estimated 4 million. It must not be overlooked in this respect that of the deaths of Soviet Russian Jews in the occupied Eastern territories only a part was recorded, whereas deaths in the rest of European Russia and at the front are not included at all. In addition there are movements of Jews inside Russia to the Asian part which are unknown to us. The movement of Jews from the European countries outside the German influence is also of a largely unknown order of magnitude. On the whole European Jewry should since 1933, i.e. in the first decade of National Socialist German power, have lost almost half of its population.

I qualified the Korrherr Report as "shocking", among other things, because it manages to conclude with the above statement ("half of the Jewish population off-gone") without ever mentioning the fact that then and there, the Nazis were fanatically persecuting and assessinating the Jews. But I conclude this blog note qualifying my own qualification, because it is well possible that then and there, Korrherr's Introduction was a courageous thing to write and its purpose was to undermine Nazi policy of extermination. I dont know, and it is irrelevant.

Eichmann as Seer

Some words get stuck into the mind and circulate there for decades till they reach their meaning and are solved. Adolf Eichmann, the demon who almost singlehandedly killed 500,000 Hungarian Jews when the war was already lost, snatching their death from the jaws of survival, said (I forgot in what context if any) that Israel, if established, was the worst danger to the world ever. Now, in 2007, we may say that Israel is solidly established, it is firmly rooted in reality, it is not the passing dream of febrile bands of kuenteniques and buhoneros (travelling salesmen). And the force inherent in this entity is slowly emerging. Israel is very different of what it appears to be, what it announces to the world that is and what sincerely strives to be. Israel is not a dumping ground for European Jewry's bleeding remnants, as Europe and the Arab world insists in seeing us. Israel 2007 is not the just society of farmers and construction workers that its founders strived to create. Israel 2007 has emerged as the unstoppable force that is rebuilding the Jewish people itself and the Temple of Jerusalem. It is a force that is denying the successive nightmares of destructions we underwent from Titus to Eichmann. Israel's population has grown 1.8% this year and this rate does not hide an average of a fertile tziganer or African minority and a sterile majority ethnic, as is the case of Europe. Here it is the Ashkenazi elite that is growing. And interestingly, the Jewish communities of Europe, which a generation ago had been given up as good as dead and gone, are coming to life with force and establishing kindergartens, schools and yeshivot. The American situation is very confused, people will not allow themselves to be nailed down in an ethnic identity, but it is becoming increasingly clear that a carbon steel hard core has emerged and is pulling in the vast, multi-layered, floating "Jewish" population created by 500 years of continuous immigration. Eichmann saw all these in the early seventies, this thing will deny the Holocaust and remake the Jewry for whose destruction he was being hanged, only that this time we will be more experienced, rustic, hardier, stronger. I for one see it happening in front of my eyes.


Above you see the pic of our respected President Moshe Katzav and his wife. The President is currently disgraced because of the accusation of having made advances to his secretary. It would be more than cruel to upload here the pic of that 27 year old hottie with the blond pony. No, I dont believe in it. What has this girl that Katzav's wife does not have, and in greater abundance?

PS: I couldnt resist.
PSS: I can resist anything, except temptation (Groucho Marx).

Vietnam - Should I join the horde?

Israeli businessmen have made lots of money in the new post Communist Eastern Europe, starting with the pioneer Motty Zisser, who built the region's first mall in Budapest. He started an avalanche of developers that are building from Kazakhstan to Berlin, causing Tel Aviv Stock Exchange's Real Estate Index to rise 60% in 2006. This was the year of real estate in TASE, while I was invested mostly in Teva and Makhteshim !!! I made about 100% in my speculative sub-portfolio, but the overall gain was much less because of the failure of my long-term dont-look dont-touch value subportfolio. Anyway, Eastern Europe is about to join the European Union and digested to & assimilated into the regular stolid/solid German economy. And even back-line Israeli developers such a the Yemenite firms like Dimry from Sderot and Boney haNegev from Yeruham are now getting rich in Romania and Bulgaria.

The ever-famelic Israeli businessman has locked his viewfinder on Vietnam. It is a bit far (8 - 10 hs air trip), the food is strictly un-kusher and the people looks like underfed E.T.s. But what! We are ready to go to the very end of the world for another fistful of gold. Vietnam, be prepared, here we come. The world's first Vietnam Investment Fund was recently launched in Israel.

Vietnam's gross domestic product is expected to expand by 8.2 percent this year and the government is targeting an 8.5 percent growth rate for its economy in 2007. "Our economy is expected to grow at nearly 8.2 percent in 2006 despite numerous difficulties and challenges which have had a bad impact on the economy's growth such as diseases, natural disasters and soaring prices on international and domestic markets," the Tuoi Tre (Youth) newspaper quoted a government report as saying. Vietnam's export volume is expected to reach a record of nearly US$40 billion while the country is also expected to attract record pledges of more than US$10 billion in foreign direct investment this year, the report said. Foreign investments and exports are expected to get a further boost after Vietnam joins the World Trade Organization next month.

The country was facing foot and mouth disease, which killed thousands of animals and the reemergence of bird flu outbreaks among poultry earlier this month in the two southern Mekong Delta provinces in the first reported outbreak in the country in a year. Less importantly, diseases kill uncounted amounts of people.

Last year, manufacturing accounted for 41 percent of the economy, services 38 percent and agriculture 21 percent. In recent years the manufacturing and services sectors have increased their contribution to Vietnam's economy as the contribution of agriculture to the economy has decreased.

The pic shows two bottles of the famous Vietnamese snake wine. Hundreds of dead snakes coiled up in a vat of rice wine have been rotting for months to produce this delicious bloody mixture. It tastes better, so I am informed, than it looks. It is claimed it has aphrodisiac qualities but all attractions are lost when you see a cute Vietnamese girl crack open a duck egg and swallow a raw living embryo, beak and all. Next, elephant fish and phu pho. Elephant fish doesnt resemble an elephant, and phu pho doesnt resemble phu pho or anything else you may have eaten before. Snake wine, elephant fish, Phu pho! how do you say in Vietnamese "Start heating the pots, the hungry Fatman is coming!"

Delete or not to delete the blog?

One hour ago I felt like deleting all and disappearing from the internet. I had worked 20 hs to finish the Monje designs, and had received a letter from the taxman demanding imaginary payments. I felt that I was too tired, that writing so much about stock exchange may impress someone malignant with my presumed undeserved richness, that I could never use the excuse that I cannot do something because I have no time (Ah, but you have time for the blog!) and that in general people were bad, evil, angry at Creation and always searching for and prepared to make harm, that the blog excessively exposed me to revenge from those who hate me as I come through the blog. Who knows whom I may be offending with my halfbaked & unthought words? In fact, this blog was started with a purpose: to sell my book and to promote my business, and it never achieved any of those goals nor anything at all. Who needs it?

Now I ate three fried eggs and drunk a glass of Romanian red wine (it is the best: rich deep-red fruity body, quite acidic so it matches heavy, fatty foods. And is unexpensive.) Did nothing for one hour and now I am feeling somewhat more optimistic. It is all biology. Another Marfutlar glass and go sleep a bit and I shall be good as new.

Who are the Israeli Finance Sector Coming Comets?

Part I

That fat, swarthy, sweating lady at the Bank told me that in 2007 the finance sector will the most successful one so I must focus my portfolio on it. Buy Bank Index Fund. Coming from a bank employee, the order was expectable. But I dont like assertive Yemeni women. She did nothing to me, true, still I am entitled to cultivate in private my prejudices. (The pic is not she. Yemeni Jewish women do not hide their faces but they sport them framed by gold coin pendants.) She argued that the bank industry had had a bad 2006, its value did not grow, so it may converge with the rest of the TASE in 2007. Is that an argument? It makes sense to invest in a sector that is a retard (Borat is talking through me) as compared with the market as a whole. It makes less sense to invest in a segment that advanced further than the market. Or is the reverse true?.). In 2006, the finance industry has done exceedingly well all over the world. It is the largest industry in London and in New York. It is the best paying industry all over the world. Goldman-Sachs gave out bonuses of 600,000 dollar per employee. Why in Wall Street and not in Echad Ha Am Street? Are the Jews here less Jewish than the Jews there?
I feel the advent of good times for the Israeli finance industry now for almost a year. I had invested in Anter Holdings of one Amit Berger, but the firm underwent unexplained transmutations and its price is down (see chart). I am losing some 25% of my money, moderated by a juicy dividend.

So I am actively searching for vehicles to ride the coming wave. Applying the trans-fat Yemeni lady's wisdom, having done so terribly in 2006 is a sign that it will do extreemely well in 2007.

Part 2

This is Ilan Ben-Dov, an Israeli businessman and playerboy, a former partner of Amit Berger. He too is mentioned in the Landau Report, a private analysis (normally you have to buy these quality things), which someone uploaded on the net, explains in detail what happened during the Bachar Reform.

Salomon Capital Markets, a small investment house recently acquired by two aggressive young entrepeneurs, Amit Berger and Ilan Ben-Dov, announced the purchase of 45% of Ilanot, a large mutual fund management company in which Israel Discount Bank held the other 55%. The seller of the minority stake in Ilanot was IDB Investment Corp. which owned, inter alia, both Clal Insurance and the Batucha Investment House. IDB actually offered its stake to Clal Insurance, but the latter declined to buy at what it considered too high a price. This price-tag was NIS230m, equivalent to some 3.6% of Ilanot's current assets under management (AUM) of Ilanot, and most of the initial reaction to the deal, in the press and in private conversations, tended to the view that this was a high valuation – and hence a rash acquisition, especially since the purchase left the buyer without a controlling stake in the company. Once again, the consensus was quickly proved completely wrong. On September 8, 2005 Israel Discount Bank stunned the market by announcing that it was exercising its right of first refusal with regard to Ilanot’s shares, and would buy the IDB stake at the price offered by Salomon. This extraordinary and rather ironic development – a bank buying more mutual fund assets, when it was supposed to be selling those it owned – also suggested that Salomon's offered price was actually reasonable, and not absurdly high, as many were claiming. Further confirmation of the valuation came a week later, when Bank Leumi sold the smaller of its two mutual fund groups, PIA, to Harel Insurance Company, for a price reflecting a slightly lower valuation, some 3.3%, in terms of AUM. Thus by mid-September, several things were already clear: there was serious interest in buying the companies on sale, to the point that it now seemed that moving quickly was advantageous and indeed necessary. Furthermore, three separate deals (IDB-Salomon; Israel Discount Bank–IDB; and Leumi-Harel) had now established a price range for mutual fund assets. This price level proved to be the floor for future deals, rather than the ceiling or the mid-point. One or two minor deals between smaller banks and smaller insurance companies in late September and early October, hinted that there would be no “holiday
season” in a sale process that was quickly gathering momentum. But the next major event still took everyone by surprise, since it was announced on October 16, the eve of Yom Kippur and normally the slowest period of the business year. Once again the buyer was Salomon, which had been foiled in its attempt to buy Ilanot -- whose NIS14 billion of assets represented an 11% share of the mutual fund market. This time the minnow was aiming even higher, at the leviathan of the industry: Bank Hapoalim's PKN, whose assets totalled some NIS20.7bn and whose market share was above 15%. The price Salomon was prepared to pay, NIS954 million,represented a valuation of 4.6% of AUM, and hence a significant increase in the price level from the 3.3-3.6% level established in the previous deals. Once again, most pundits poured scorn on Salomon for having overpaid, accusing Amit Berger in particular of being on an ego-trip – and once again they were quickly forced to eat their words. At the end of October, the Markstone private equity fund bought a 60% stake in Salomon, thereby becoming the ultimate owner of PKN and also providing Salomon with the funds it needed to finance the PKN purchase.

Many legal and regulatory changes that will only take effect later and that create a need or incentive to delay closing the deals until they are finalised and in force. As a result, for example, the Markstone purchase of Salomon Capital Markets is entirely 'on paper', since the latter has not actually bought any of the mutual funds and provident funds it has committed to buy. Berger and Ben-Dov have thus created a company, 'bought' NIS60bn of financial assets, 'sold' most of their holding in their company to Markstone at a large profit – all without having invested any hard cash, or borrowed additional resources.

I want to be like Amit Berger. (I know, I can only be me, and at my age, even that's very dubious).

Part 3

The Markstone Capital Partners bought a small fund operating within the Bank Poaley Agudath Israel, the haredi bank. Money under management of 3 million shekel. Peanuts! I didnt know funds so small even exist. Markstone sees place for these small niche markets, and intends to take over them. The next is the Russian immigrant market. 3,000,000 shekel paying 3% annual management fees = 90,000 shekel = 7,500 shekel p.m. = a salary. Why not me? Eytan Mizrahi, my fellow engineer from Tahal, managed his own inheritance of 1 M and had two family clients of another 1 M. He moved the money between state debts, Mexican bonds paying more and inflation, etc. He didn't work as employee, this is what he did. Amit Berger's Anter Holdings sold debentures to pay for its acquisition of Tiv Tam supermarket chain. The papers pay 13% interest, 2.5 years, in indexed shekels. The Chinese savers receive a miserly 2 or 4 % in yuan, linked to the inflationary US dollar. How an arbitrage or minorist business could be built? Without going far as China, many Israeli niche savers get miserly yields. The small haredi savers are one group. The Russian immigrant pensioners are probably another. What about Arabs? Palestinians?

The Reform of the Israeli Milching Sector

Israel is compleating its reform program which was designed to make the milk sector competitive on a global scale, so we could enforce free trade agreements within the WTO and the GATT. I had some participation in the Reform - in fact, it was my first step towards leaving the Ministry and becoming an independent design engineer. Today I wrote a short article in Spanish for Dos Pinos Milk Cooperative of Costa Rica.

The illustrations show new barns built in the Maabarot Kibbutz (producer of Materna milk substitute), financed by the 500 million dollar reform. The Reform also tries to stop environmental contamination caused by the milch sector.

The milch sheep is a a good solution for small operations, such as the Ahihood kibutz. The mid pic show the opening ceremony of the Sarid kibutz infrastructure, with the tzinoon detail (ventilators for the milch cows, sometimes with water foggers to refresh the air).

Rainwater Decorations

I always wanted to design and build rainwater based decorative elements, for example, for a mall. I offered the idea to Shirly, the Kfar Y. mall chief architect, but she had never seen such things (me neither) and had no time to entertain the idea in her busy mind of a hottie-architect. My dream is to bring down the downspout rainwater in an acrylic transparent pipe into the center of the mall, and build mobile/dynamic visually interesting "science projects" for the public. I want also to use running water to generate sounds, an infinitely variable natural "music". The music of Nature. I am still in the phase of collecting ideas, and the object of this note is to start giving them some substance. .

Above is a tornado vertex machine, made from two 2 lt transparent plastic pop bottles, connected by a rubber band. The water forms a vertex where the outer border has high presure and the internal one low pressure. The air moves through the central rotating hole, allowing the water mass to move into the lower bottle. The second idea is an internal water fountain, also produced with two 2lt bottles, connected by a straw. The straw will create a water+air bubbling fountain, allowing the water mass to move to the lower tank.I know of a few building projects with grew water recycling elements, but they didnt catch up. Environmental and health authorities de facto discourage them. People very much would like this water saving elements, they are ready to pay, but there are no safe ideas or artifacts. Unmaintained water artifacts can easily be a focus of infection. Or can they? I dont know. The Arab sector in Israel traditionally had rainwater tanks in their houses (they was no tap water) but they tended to get dirty and unsafe for use. Nowadays everywhere there is tapwater connection and the technology is fading away. Local Greens promote the idea of greywater reuse, and even publish addresses of suppliers: שנות בצורת רצופות ושימוש יתר במשאבי המים גרמו למשבר המים החמור ביותר שידעה מדינת ישראל מעולם. משבר הגורם לירידה מתמדת של מפלסי הכנרת ומאגרי מי התהום אל מתחת לקווים האדומים ולתופעות של המלחה וזיהום הולכים ומתפשטים. אחד הפתרונות למשק המים הוא מיחזור מים אפורים ביתיים - "דלוחים" - שמקורם ממי מקלחות, כיורים וכביסה. מים אפורים אלו יכולים לשמש להדחת אסלות והשקיית הגינה. בעולם ובארץ קיימות חברות המתכננות ומשווקות מערכות מתקדמות לטיפול מקומי, טוב ולא יקר, בשפכים ובמים האפורים באמצעים הנדסיים ואקולוגיים. באמצעות מיחזור המים האפורים ניתן לחסוך עד כ-50% מצריכת המים הביתית, כ-25 מטר קוב
לנפש לשנה בממוצע. בכדי למנוע זיהום וסכנות בריאותיות חשוב להתקין מערכת מיחזור מים אמינה וטובה. לצערנו, משרד הבריאות מסרב בשלב הזה לאשר מערכות למחזור מים אפורים (טובות ככל שתהיינה) ולא מוכן לגבש תקנות הנחיות בנושא. סירובו נובע מהחשש לתחזוקה לקויה ותקלות שתגרומנה לזיהום. אנו קוראים למשרד הבריאות לא לטמון את ראשו בחול ולהשאיר את הנושא פרוץ. על המשרד לבדוק את הנושא לעומק ולגבש תקנות מחייבות בדומה לטיפול בחשמל ובגז. לקבלת מידע ויעוץ ניתן לפנות לאתר מרכז הבניה הישראלי המפרסם מאמר בנושא.
מצ"ב רשימה של מספר חברות העוסקות בתחום מיחזור מים אפורים:
1. חברת אד רום
2. עפרה צמחי מים - טלפון 04-6566291; פקס: 04-6568923
3. חברת מיי רב - משרד 03-9045066; שיווק (עמי) - 0544-780005; ייעוץ טכני (דוד) - 0544-780005
4. א.א. מהנדסים - ת.ד. 1360, ק.טבעון, 36000. טל': 9930049-04 aaeng@netvision.net

I happen to know personally all of them, and I am unimpressed. After my last consulting in China, I wrote an article on the rainwater collection, generating much interest, but I didnt have the persistence to develope the idea, which could have been my specialty. In Israel (and Australia and so on) people has been indoctrinated to save water so recycling is in great demand. But there is no supply of good ideas. Well, hereby I am starting to collect ideas in a systematic way.

Cultivating My Over-Taxed Portfolio

About May 1999 my dear wife decided to get rid of me since she was convinced that I was about to run away with a Russian mail-order bride. First thing, her lawyer froze our bank account. I needed a lawyer and had no money. After the crisis was solved, on January 2000 I started a separate fund to cover these personal eventualities. During the next seven years the fund grew tenfold, that is at a rate of 38 % per year, including maintenance fees and mas hachnasah - the ever-alert Israeli taxman's take. Substracting the monies I injected from time to time, the portfolio achieved circa 20% annual net yield (after tax and before additions). Nice, but I can do much better. I need to cultivate the portfolio to achieve even better results. In Hungarian sounds better: Tornasztattni fogom penzecskemet.

Illustration: Another kind of Sidonian Shekel.

The V'ger Meets its Maker

The best ever scifi film, one that made a lasting impression on me, is the V'ger Star Trek story. A monstrously large living energy cloud approaches Earth and is about to destroy it. The Enterprise receives the task of saving Earth, so approaches the entity and tries to understand what it is. V'ger, so it is discovered, is the original Voyager 6 space probe launched in the late 20th Century and lost in space. The object had been badly damaged but "somehow" cured and rebuild itself, and continued what it interpreted was its mission: to learn about the universe and bring back that knowledge to it Maker on Earth. Its name plaque had been burned (see pic), so interpreted its name as the V'ger. The object had evolved and developed powerful self defense organs and accumulated a fantastic amount of information and had returned to Earth to meet its Maker.

The Enterprise crew penetrated to the very center of the V'ger cloud and found, in its oldest parts, the original damaged Voyager 6 (lower pic). Using its antiquated radio communication system, they were able to establish contact with V'ger and convince it that they were its Maker.

The climactic solution of the story is not of my liking, since it is pure Rodenberry mysticism. The creature merges with a human and evolves to a higher level of consciousness and gets the fuck out of here. Nonsense. I cannot forget and my mind is still working on V'ger because of this Deus Ex Machina pissy warm-wet ending violates my sense of esthetics. V'ger will return to Earth to meet its Maker and the story has to find a satisfying solution.

Feeling Unhappy with Barcarola

Ha Aretz paper published this culinary note on calamari tubes with berry sauce, which we (wife + blogger) actually ate at Barcarola. The Restaurant's owner offered us this special plate and served it personally. I would like to believe that the Chef made an extra effort for me, since I had worked on and succeeded in achieving the municipal and Ministry of Health licence for the restaurant, including the changes they made to the original building. One thing Ha Aretz's gastronomist does not mention but I would, is the fact that the Barcarola kitchen is the best designed, best equipped and the cleanest of all the restaurants and food factories I have known during this last year. But sorry, the calamari tubes thereby described were very bad. Exotic, but terrible. Whitish, tasteless, chewy poliethylene, with the consistence of cold white chewing gum stuck under the chair. The berry salsa was acidic and sweet and unidentifiable. My wife is an expert in Russian berries but this was unknown. Also the whole thing was about 100 gram, less than a mouthful. I understand we didnt came to eat, but to give two or three calamari tubes to a 1xx kg very fat man, can be interpreted as an insult. The baked pear (see illustration) could have been almost eatable, but again, to present one half miserly, microscopic, measly, underdeveloped, stunned, anemic, "conceptual" shadow of a pear in an empty half meter wide plate can be construed as an insult or a joke. I never heard of the spiced wine offered and for good or bad, had fruit juice.Having set down my expert opinion, I'll let you have Daniel Rogov's one.

Playful hedonism by Daniel Rogov/

I wrote a very positive review of Kfar Sava's Barcarola when it first opened in 2003. Although set in an industrial zone, not far from what appears to be the end of the world, the restaurant had great charm, and the considerable skills of chef Itay Shalev made this place well worth visiting. About two weeks after my review was published, the chef decided to wander on, as is his wont.

Now that chef Noam Dekkers has been there for 18 months, I thought it would be safe to return. Dekkers garnered experience at some of the best restaurants in the country, including Mul Yam, Raphael and Chloelys. I must say I am delighted that I did, for Dekkers' cuisine can be playful, but it is never outrageous. He is most assuredly a Francophile, but he knows how to add a personal touch to the aromas and flavors of the Mediterranean.

Our meal opened with three appetizers. The best was calamari tubes seared on a hot, barely oiled surface and served with something between a sauce and a soup of apples and juniper berries. The succulent calamari and the delicately sweet sauce came together beautifully, and the other appetizers did not disappoint, either. One contained a soft, just sharp enough sheep's cheese placed on thinly sliced roasted beets and sprinkled with walnuts, making for a flavorful, refreshing offering. The other dish contained fine-quality beef carpaccio served with St. Maure cheese, endive and a halved pear, a simple but good combination. No less important, our waiter's suggestion of a glass of spicy Gewurztraminer wine was much appreciated

Who is this Mr Rogov? "Let us start off by saying that even though I taste more than 1,500 wines monthly and dine in restaurants anywhere from 6 - 10 times weekly, I am neither wealthy nor fat. Nor do I have a red, bulbous nose." Well, eating at Barcarola will not make you wealthy, and certainly not fat. And we better leave uncommented the proboscis.



The illustration above is a Sidonian Double Silver Shekel.

Mekorot Water Company Sells Debt

Ronen Wolfmann is the new manager of Mekorot Water Company. The Treasury has persistently pressured the company to stop operating on a cost-plus basis, and go commercial. There is plan to divide the company into three different commercial companies, one of which will own and operate the large water carrier infrastructure, the other will provide water contracting services and the third will be a business development startup. The only force stopping this change is Mekorot's strong workers union, which draws the country's highest salaries and consequently counts with the worker's ferocious resistance to any progress towards privatization. They allowed the sale of debt because they didnt see it as menace to their own position.

The debt has been offered in two alternative routes: the long term (13.7 years) and the short term (6.6 years). Both pay 4.9% interest. It has been qualified AAA (State guarenteed). The 250 million dollars they received will be invested in development projects.

Why must a State company sell its debt in the Stock Exchange and pay higher interest rate than the State? Till now, Mekorot's development budget was financed directly by the Treasury, which has access to foreign very cheap loans. The answer is the will to force the company toward commercial markets as a first step toward its privatization.

The (Jewish) Private Equity Creature

This Creature lives by (1) buying up a productive asset (factory or whatever) capable of taking up debt, (2) the debt finances acquisition of more indebtable assets, (3) the Creature distributes good dividends to the investors (and salaries, bonuses, compensations, etc. to the Maker) (4) paying quality dividends, the Creature attracts even more private equity capital. And so on without end and on till the Creature, like the V'ger returning to meet its Maker, becomes monstrously bulky and complex. The Maker treats all the constituents members of the Creature as trading assets, objects always on the basta, on show and on sale, since the Creature has no vital parts that cannot be easily relinquished. Therefore, the Creature is always changing, everything is on its way in or out, in formation or in dissolution. The Maker's sole criteria is the efficient use of the capital, that intangible abstraction. The Creature can be envisioned as a bodyless, formless, unfeeling amoeba, that produces nothing tangible or understandable, but rules everything within or around it. The Creature definitely supplies something that causes its current and potential parts to operate more efficiently. Moreover, it is possible that without the Creature, the parts would lose their elan vital, and decay and die. The Creature is eminently Jewish. An example: Cerberus Capital.

The Creature is perceived by most human beings as sacrilegous. People invest a third of their lifes in getting an education and acquiring a trade, then invest much of their mental and physical resources during adulthood in exercising this trade for a living. Such dependance and focus causes people to consider their trade a sacred mission, but for the Creature, trades are meaningless. An example: a man who spent his life till age 30 studying physics and from 30 to 60 working to design and manufacture, say, internal-combustion vehicles, believes that he is doing something important, significant, good. The Creature shares no such sentiment and will terminate the whole activity - with its specialized knowledge, its hierarchical structure, its century-long tradition - if it becomes even marginally less advantageous. The Creature does not feel pain even if termination means the death of a whole town, country, civilization or race.

The silver coin is Cartagenian (Kyria Ha Hadasha) Hasdrubaal shekel.

TSEM Struggling

Tower Semiconductors is advancing steadily while its price is declining. The latest is that

Synopsys, Inc., a world leader in semiconductor design software, and Tower Semiconductor Ltd. (Nasdaq:TSEM - News; TASE:TSEM), a pure-play independent specialty foundry, today announced that Synopsys' Hercules(TM) Physical Verification Suite (PVS) rule files are now available for Tower Semiconductor's release of 180-nanometer (nm) high-voltage technology. The availability of Hercules rule files for both design rule checking (DRC) and layout versus schematic (LVS) on this specialized process is the result of close cooperation between the two companies. Hercules rule files are also supported in Tower's standard logic technology processes.

What the meaning of this announcement is, I dont know, but seems progress toward profitability. The price is 1.77 $ down from 2.0 $ and my paper profits are steadily being eroded. I sold my options with zero profits, and I am thinking of erradicting TSEM from my portfolio. But my investment adviser(ess) said TSEM was interesting and I should have it in my portfolio. So there it remains.

The illustration shows Old Egyptian currency.

Upcoming Projects in Israel

In the 2007 budget there are several large water projects upcoming:

(1) Sludge Incineration Project, withing the framework of the Shafdan WWTP, near Palmachim (South Tel Aviv). The environmentally-preferable (maybe) alternative is a compostation plant, which has the NIMBY issue and what to do with the compost, which is unneeded & unloved by farmers.

(2) Sea outfall of the Haifa Bay Industrial Area. Oil refinery and other large chemical plants are unable to purify industrial wastewaters to the degree required by law. The outfall is a solution but the Greens want the factories to purify.

(3) Ramat Hovav Industrial Area, which was established to house "dirty" industries, has become a focus of environmental protest. Each factory will treat its wastewater which will be evaporated in a central pond. The pond leaks and the vapour is toxic. No solution.

(4) Conventional wwater treatment + agricultural reuse projects, to the order of 2 B shekel (500 million $). This was my area during the last ten years, but it has become a normal, organized industry with younger people with PhD credentials, so competition is strong.

(5) The Inbar Committee's Recommendation to Enforce Tertiary Treatment. It would require the upgrading of some 200 WWTP but its financing has not been established. The idea is that the agricultural user pays 0.15 shekel more for tertiary water, as it allow him to irrigate higher price crops. The report that shows that tertiary treatment is profitable is based on that premise. I think it is nonsense, and the thing is advancing very slowly.

(6) Rehabilitation of Crashed WWTPs. Many WWTPs erected in the Arab rural sector with 100% subsidy are not being operated nor maintained. Last year there were two cases of drinking water well contamination in the Galilee. There are in Israel a great number of failed Arab (and a few Jewish) municipalities that are unable to pay their employees and much less to maintain environmental infrastructure. Only direct budgeting activity can put them in operation, but the central government stopped doing projects and avoids turning failed municipalities into eternally dependent of subsidies.

(7) The Dead Sea Protection Project, pumping seawater to maintain its level. It is a complex project since three enemy entities are involved: Israel, the Palestinian Authority and Jordan. For more than twenty years the project is being studied and searching for a workable political framework. Since the world is actively seeking something to accuse Israel, and this environmental thing would be ideal for them, the whole green world would paint us black. The Dead Sea, I presume, is condemned to continue dying.

What is in all the above for me? At first look, I am done with water infrastructure. I made a satisfactory living in the water sector since 1976 and it's enough. At a second look, lets think it a bit more.

Wastewater Field Day

This morning I took my class to visit water and wastewater related infrastructure in the neighborhood. This is a special small course for adult, working technicians who strive to complete their civil engineering degrees. Their employers contribute to the tuition. Some work for the Israel Electric Corporation, others are in the process of being pensioned off by the Army (at age 45), the rest are building contractors who need the title of dipl. engineer.

The first stop was the Barkan Industrial Area Wastewater Treatment Plant, built and operated by Termac-Kal Binian. Very good impression, clean, silent, odorless, well managed. Slava, the operator in charge, is the same fat rosy-cheeked Russian of four or five years ago. In the meanwhile he had learned Hebrew and gave us quite a coherent presentation. A few days ago someone had opened a mazut (heavy fuel oil) tank and three tons flooded the plant. The black marks were still visible. They have an COD and Mineral Oil analyzer at the entrance and lots of new electronic equipment. The treated water feed the Shilo River, that flows into the Shilo Natural Reserve and then to the Coastal Aquifer.

The second stop was the main sewage pumping station of Kfar Saba, the "Brosh" station. Simple, silent, clean, well maintained. Shlomo from the Municipal Team (all of them small black Yemeni Jews) received us and was very self assured and professional. I had worked them seven years ago, they had matured and became quite impressive. The new station, "Albar", whose planning and erection was supervised by me, is yet to become operational. Typical of the Ministry of National Infrastructures, they cannot keep a timetable nor a budget.

The third stop was the Raanana Municipal Wastewater Treatment Plant, an SBR system. I had a strange feeling, since I was involved in the Steering Committee that guided the planning, the bidding process and the erection of the plant, ten years ago, participating in the dilemmas and decisions. Chaim, the O@M manager, explained the concept and workings of the plant as something natural, and the tertiary treatment program. The plant is working very well, it produces water for the citrus plantations in the area. We stole some sweet red grapefruit.

The general impression is that the "heroic" era of the wastewater treatment is over and that it has settled into a normal industry. The plants we saw can be compared to their European equivalents, which is surprising to me. I am among the founder generation, but now the industry has settled down and has passed into the hands of younger people who takes its concepts as granted and natural.

Time for me to search for greener pastures.

The Poligon Adventure

A personality that calls himself The Daytrader in a stock exchange board reported that had bought a certain option. The next day, the option had doubled and tripled its price and he announced that he had sold it at a great profit. Somewhat kidding, I wrote that me too wanted to take part of his party. Next early morning he wrote that he had bought Poligon Zchuyot 4 (Poligon Rights 4). I too immediately bought 1000 shekel worth of the paper (240 $). On the computer, it is very easy. Then started to study what strange animal I had acquired.

The paper was in sale in the stock exchange only for that day. Paying a few more cents, it granted the right to buy 8 new Poligon shares (each with a nominal value of 0.001 shekel - a real sub-sub-penny stock) and to receive 10 options and other merchandise. The current price of a Poligon share is about 50 shekel, so each new share may be worth about 50 : 8 = 6.25 shekel. The announcement was so complex that apparently no one had read it and understood its meaning and could calculate its real value, so the price fluctuated wildly the whole day. I asked The Daytrader what he was doing, holding the paper or selling it? He answered that my investment was so insignificant that made no difference if I hold it and take the eight new shares or sell it.

Today he wrote that he had sold them at a reasonable profit. I didnt, so now I have about 10,000 new shares of Poligon. What the hell is Poligon?

Poligon it appears is a financial creature that owns the Tzomet Yarkon industrial area and its income proceeds from renting the land and the structures. Nice! I had worked on the permit for Night Sleep bed and matress company there so I knew the place. It is a very well situated land, near a crossroad, near the Segulah (Petach Tikva) industrial area, near the train station. But...

the land was classified as agricultural land, and therefore all the structures and buildings were illegal, and all the rents collected were illegal. Poligon was being sued for illegal use of the land, and the case was near completion, with a heavy fine and the judicial order to destroy buildings and so on. The area is in the Yarkon River floodplain, so it is heavy and unsuited for agricultural use. Anyway, agriculture is a losing business in Israel. There had been talk on the boards that Poligon was being going bankrupt and liquidated. The stock had fallen from 250 to about 50. But...

digging even more, I discovered that paralelly and independently of all the above, the land was being replanned and re-assigned as industrial zone (these imbecile things - two opposite processes - are very common in Israel). A re-planning of this kind means winning the lottery, because land with building permits is extreemely scarce and extreemely expensive. Israel is the world's most densely populated country, and Tzomet Yarkon is in its very center. Poligon owned in fact a potential gold mine, the possibility of building wonderful malls and entertainment centers and whatnot in the strategic center of the country. So it must be a good long term investment. And from yesterday, I am have the right to own 1/1,000,000,000 or so of Poligon! Hopefully, some day it will be worth something. Let's see in a month, when the dust settles down and the visibility becomes clearer.

The illustration is the Mesopotamian silver wire money, one of the oldest financial instruments known.

Freshening the Portfolio

I spent two days in bed because an ankle strain (as in the pic). This morning I went to the bank to refresh my portfolio according to the strategy I wrote down below. Sold half of Teva and Machteshim ("Industry? It is dead") and bought Israeli developers of real estate that start projects all over the world. I also invested in Israeli high tech, maintaining most of Tower Semiconductors, and added some very risky options like Strauss and Poligon. I also diversified risks (first time) to a Chinese index fund. The yuan will revaluate, the shekel will continue rising (we are having surplus - first time in history) and the dollar is doomed to sink. The investment expert in the bank praised my portfolio, few people dares to be invested 100% in stocks and options.

HydroFlow - Does It Work?

Pazgas 1993 Ltd. is an Israeli energy group that is expanding its activity to other countries where it will focus on water technologies rather than its core business. The company’s subsidiary, WaterPath recently signed a contract worth an estimated NIS 5 million with Romanian gas company VitalGas for the marketing of the “HydroFlow” water purification system. The technology works through WaterPath’s “Avenix” device, which is fitted onto water pipes and transmits a signal directly into the water. The device treats the water all the time, preventing the build-up of limescale on pipes and heating elements.
Pazgas launched WaterPath last year at an investment of $1 million. The HydroFlow technology was developed in the UK by the Israeli Dr. Danny Stefanini, technical director of Hydropath UK, who worked together with WaterPath CTO Avigdor Paldi. The technology is marketed throughout the UK by BG Group (NYSE: BRG; LSE: BG). Pazgas has so far signed a series of agreements for the installation of the device in a number of kibbutzim.

I know the accesory, I have it installed on the water feed of my washing machine. The installator would not sign the washing machine warranty if it was not installed. So I am a forced customer. It cost me 80 dollars and it is not clear to me if, why or how it works, and I suspect it was a trick to extract extra money from me, the washing machine customer. Israeli water is very hard and does a lot damage to washing machines.

The inventor says that the thing creates seed nuclei for the formation of calcium and magnesium crystals in the water, avoiding the deposit of these minerals on the inner walls of the pipe. The seed is created by electro-magnetic action, caused by the flow of ion rich water through (within) an electromagnetic ring, which also, somehow, also affects the ion nuclei flowing in the water. I never learned about crystallization by electromagnetic fields, so I cannot say if it is plausible. Apparently, it is. You can see the drawing, and judge for yourself and tell me. By nature, I am quite sceptical of these miracle things. The fact is that it is being marketed here for a number of years and it did not replace industrial softener systems but it is being sold for home users (presumably to people who has no idea but are panicked about Israel's water quality), compulsory customers (like me) and ... aha! Romanian State-owned companies.

Ideas for an Investment Strategy in 2007

I have some half-baked ideas that point towards abandoning the US dollar and to invest more in smart startups in Israel. The phenomenal success of startups demonstrates that there IS a new economy, where vast sunken costs in buildings, machinery, organization, etc. are actually a burden, and good ideas and developments can and do make irrelevant whole industries in almost no time. This was the concept of the internet revolution, where it was thought that Amazon has eliminated the book-shop industry, and that Slate was going to end The Washington Post. I think it is happening. I realized that this morning when I was to directed to a The Marker video interview: the quality is excellent, the cost - nothing, this thing is better than TV and is going to kill it. That's why YouTube is worth billions. The same with drugs (remedies), an invention can kill large companies like Pfizer. Agricultural land, factories, etc. are the traditional economy, and money is not there. I know I just "discovered America" but better now than never.

Truth is I have realized the profitability of the startup industry seven years ago, in the middle of the "bubble". I bought a closed investment fund organized by Bank HaPoalim and lost at least half of my investment. I am still holding it because it cannot be sold. I discovered that the Fund was no good when learned about the salaries of the managers and the operational costs (about 5% per year), and the specific enterprises they had put my money: for example, an internet fax (which never took off) and the Alphie imbecility, a University of Tel Aviv startup of internet for 2 - 3 old babies. I had had some former contact with the Alphie people and I was amazed by the illusion that it was interesting. These people never had children and they had no idea of what they were talking about.

The conclusion is that Fund Managers are stupider than me and I can manage my savings better than they, without management fees.

This year I shall put an effort to locate promising startups, and instead of giving 6 or 8 % to "crazy" investments, I am going to give at least 15% of my saving to new ventures.

Second, I am getting older and children are selfsustaining, so I can risk more and invest in riskier things. I have to be careful of learning what I am investing in (see the Poalim Venture Fund fashla) and use my own sense.

The pic is just decoration on the wall. I like it.

A year after

This blog is almost a year old. A year ago I was starting to focus my attention on the stock exchange and managing a bit more actively my savings. Some ideas had reached my conciousness up to the point that I wrote them down in the blog, such as real estate stocks like Gazit Globe were becoming world wonders and possibly great investments for 2006, and that Makhteshim was a dog, important analysts were advising to sell it while insiders were selling it. But I did not transform knowledge into action, so I was stuck all year with Makhteshim, losing money. Another signal that I should have obeyed was about Teva, having its main competitor sold out to Perrigo saying that the generic business was finished. I am also losing on Teva.

On the other hand, I selected 5 - 6 small cap stocks and sold mutual funds. My stocks all went up over 25% except one: Bank Igud, which is down 25%. My mistake on Igud was to calculate that it would be sold, but its owner, Binno Zadik, is holding it out.

Tower Semi was a highly speculative investment, which is not the success I expected, but made some 15% in the year. It is now falling and I am thinking of finishing it off.

My best investment was, doubtlessly, Israel Chemicals, a potash company. It suffered all the year because of Mr Doyle's strategy of holding up sales and building up stores, to improve prices, which succeeded spectacularly. Since I suffered the prolonged period while there were little sales and the stock price was down, I got to know Doyle and watch his speeches and announcement, and I had the privilege of learning how a real business leader operates.

I also made five or six small speculative operations, sivuvim, with warrants and illiquid stocks, and in all I made money.

All in all, my portfolio went up 35% which about a quarter was fresh savings and the rest stock exchange profits. Taking into 20% tax on profits and a 10% appreciation of the Israeli shekel, my estimate is that the portfolio made 25% this first year.

On other fronts, I failed to finish my book and to sell it. The reason is that I am so busy with my activities as consulting and designing water engineer. I have learned the ropes (including autocad and regulations) and have made about ten successful small projects. I worked very hard, but sold my work very cheap, about half of the market price, and only now I am starting to learn the business and getting better projects and better prices. Till now I did not register myself with large suppliers of good work, like the Army and the Ministry of Housing, but I had no time.

I keep teaching in the university and got another course. Teaching is a prestige building activity, brings no money in. I love it, it is very good for my ego during hard times.

My Mother went through two operations and almost died. She was interned in geriatric hospital almost 4 months. I am healthy and content, but feeling heavy. I am not making a new year plegde of losing weight, because I always failed. But that is another area where I need to take action.

Next year's program is more of the same, only much improved. Hoy mejor que ayer.

Nothing ... (Episode III)

The mazah - backflow preventer - is installed. NOW, all is right.

A Water Fund

I was wondering what were the investments of those famed water funds. I found one interesting one: the PHO - Water Resources Portfolio. Its investments are as follows>

Health Care
6.63% MIL Millipore Corp. 3.63%
IDXX IDEXX Laboratories Inc. 2.99%

Industrials
59.60% WTS Watts Water Technologies Inc. (Cl A) 4.58%
PNR Pentair Inc. 3.90%
MWA Mueller Water Products Inc. 3.89%
DHR Danaher Corp. 3.55%
LAYN Layne Christensen Co. 3.55%
PLL Pall Corp. 3.44%
INSU Insituform Technologies Inc. (Cl A) 3.39%
FELE Franklin Electric Co. Inc. 3.39%
ITT ITT Corp. 3.39%
LNN Lindsay Manufacturing Co. 2.69%
BMI Badger Meter Inc. 2.64%
SYGR Synagro Technologies Inc. 2.59%
URS URS Corp. 2.55%
VMI Valmont Industries Inc. 2.51%
TTEK Tetra Tech Inc. 2.37%
ROP Roper Industries Inc. 1.49%
IEX IDEX Corp. 1.44%
AMN Ameron International Corp. 1.44%
SI Siemens AG (ADS) 1.41%
MMM 3M Co. 1.38%
FLS Flowserve Corp. 1.37%
EMR Emerson Electric Co. 1.36%
GE General Electric Co. 1.28%

Information Technology
1.13% ITRI Itron Inc. 1.13%

Materials
6.95% NLC Nalco Holding Co. 3.52%
CCC Calgon Carbon Corp. 1.84%
ASH Ashland Inc. 1.58%

N.A.
0.42% Cash Money Markets 0.42%

Utilities
25.29% UU United Utilities PLC (ADS) 3.55%
WTR Aqua America Inc. 3.47%
CWT California Water Service Group 3.37%
SBS Companhia de Saneamento Basico do Estado de Sao Paulo (ADS) 3.29%
AWR American States Water Co. 3.14%
VE Veolia Environnement (ADS) 2.59%
CWCO Consolidated Water Co. Inc. 2.26%
SWWC Southwest Water Co. 2.21%
SZE SUEZ (France) (ADS) 1.40%

There are no pump manufacturers or tube makers. Half the money is in the electric business, like General Electric and Siemens, and a quarter in utility management. I for one cannot see the glamour or growth potential or whatever in this field, but I am too close to the trees to see the forest.

How big fortunes are made

Theodor Herzl, the founder of the Zionist movement that imagined and produced the State of Israel, was son of a Budapest banker and a rich man on its own account. Among its first actions to organize the movement, he founded a bank, the Jewish Colonial Trust.

Colonialism went out of fashion, so the bank changed its name to Bank of the Nation - Bank Leumi. From the financial instrument of a political movement, the bank has became today Israel's largest commercial bank with branches in many countries and 50 billion dollars in portable assets. Bibi Netanyahu, in his privatization drive, sold the bank to the highest bidder to a thing no one ever heard of in Israel: Cerberus.

Cerberus is a Wall Street giant in the hedge fund/private equity business. Cerberus manages 16 billion dollars in assets. Cerberus is a very recent phenomenon, and just only 14 years ago it was a small time vulture fund with only 10 million dollars under the management of Stephen Feinberg. Even as late as 2003, Cerberus had less than half the assets that they have now.

Cerberus has been on a buying binge. It remains to be seen if they can digest all the deal flow without indigestion. Acquiring assets in all industries and selecting good managers without any background at all in running companies, is insanely ambitious. With so many recent mega purchases will Cerberus be able to devote time and manpower to its stewardship of Bank Leumi? Hedge funds are in the business of making profitable exits for their clients. They are not long term managers. What happens will they want to sell? Who then will be responsible for daily oversight of Bank Leumi? Will the depositors be left holding the bag?

In my opinion, Bank Leumi has fallen in the hands of Wall Street wildly daring speculators and is in its way to be dismembered, sold and dispersed. Some people is going to emerge very rich from this muddy process. No institution lives forever nor should. The Bank was founded with a definite purpose and in its 100 years plus career it has fully executed its mandate. In my view, it is only bahooving that it shall end its life making rich a bunch of Jewish people.

Nothing is Direct or Simple Here (Episode II)

Yesterday called me the manager of a chain of supermarkets informing me that they had a surprise inspection and they had found that my plans did not reflect reality, that the mazah (backflow preventer) that I wrote it was installed, in reality was missing. What kind of professional would miss such an important detail and bla bla bla.

I answered that I have taken pictures and the blackflow preventer was there. No, that was not a preventer, it was a simple backflow check valve. From the pic I could not judge if it was so. May be. I was depressed all day. Then a friend, an architect, told me: Dont you know? These people have several supermarkets and they use to dismantle the preventer after inspection and move it to another branch. So they save 2 or 3 or 4 backflow preventers, each costing a thousand dollars. They blamed you, since you are so soft, of course, they cannot tell the truth.

To improve my mood, we went with my wife to see "Borat" and forgot a bit about the incident. Now back to my depressing reality.

The pic above is a Kassam rocket, one of the thousands the Palestinians shoot to us daily. This one missed. Our reality.

Biorremediation Startup

BioPetroClean (BPC), a provider of commercial grade bioremediation systems for oil contaminants, today announced that the company had closed on $3 million in Series A funding led by its sole institutional investor, New York-based 21Ventures LLC.
BPC closed the round late last week and will tap this financing to support operations, specifically sales and marketing, and to augment research and development activities.

The company also announced the installation of its technology at the Eilat Ashkelon Pipeline Co. Ltd. (EAPC), which transports crude oil from the Red Sea to the Mediterranean.

EAPC is the first commercial company to adopt BioPetroClean’s technology, developed by Prof. Eugene Rosenberg, of Tel Aviv University, who is co-founder and chief scientist at BPC. Rosenberg, together with Prof. Eliora Ron, pioneered the use of naturally occurring bacteria to clean up oil pollution in oil tankers, pipelines and on beaches in the 1970s, including the infamous Exxon Valdez oil spill off the Alaskan coast.

Nothing is Direct or Simple Here

Yesterday, at 0900 PM a new client visited me, Y. He is planning to build a private house in Kfar D., a new development. Y, like others who bought a 500 sq.m. plot in Kfar D., is a youngish (30+) hi tech employee. He want to build a den (martef) with separate entrance, which in fact will be a separate living compound. Which is not allowed. OK, so we will make him two designs for the price of one: the official one to be submitted to the Vaada, and the real one, that he intends to build. But Y. doesnt stop there, he want the underground apartment not to be underground, so there is no need for a sewage/drainage pump. Y contracted Mr L., the retired head of the Vaada, calculating that he will have the right connections to achieve a building permit with the necessary change in levels. The trick is not working, as L., because he knows the people and the regulations, refuses to submit the request. Y. came to me and asks me to find a reason to elevate the building and that I do the request. He said that street level was higher than the OO.00 of the house, which cannot be true. It is higher than the den. Yesterday we checked the levels and according to the topographic map, the street is lower than his future home. If dear reader thinks that that's all, you doesnt know how our mind works. Y contracted this morning a moded, to make a new topographic map, which - I assume - will show that the street level is higher than the 00.00 assigned to him by the Vaadah. So he has to elevate the house. If he brings me a map that shows that things are so, I'll have no choice but to request a change in the elevation. Quod erat desideratum. What is what Y. wanted.

In addition, the Vaadah "allows" up to 50 cm "error" in elevations, which Y takes into account in his calculations as a fact. I am afraid that in his dreams, he pictures his home as a scyscraper.

Another Electric Healing Machine

Life Wave Hi-Tech Medical Devices Ltd. plans to raise the minimum amount allowed for an R&D company on the Tel Aviv Stock Exchange (TASE): NIS 7 million at a company value of $25 million. Life Wave is an unknown entity on the capital market. The company’s flagship product helps heal chronic wounds by using electrical pulses, which facilitate the division of skin cells, thereby speeding up the healing. There are a number of current treatments for chronic wounds, but none are considered a real solution to the problem.

Chronic wounds is a huge market. The only device on the market for treating chronic wounds, vacuum assisted closure (VAC), has sales of $900 million. Life Wave compares its device to VAC.

Life Wave’s prospectus says Smith & Nephew plc (LSE:SN; NYSE:SNN) had been interested in marketing its device, but, after trials, decided that its effectiveness was not proven. Life Wave is now seeking a new distributor. The company has EU CE Mark certification for its device, but no US Food and Drug Administration (FDA) approval.

After years of researching the neuropathophysiology of wound, LifeWave introduced an innovative electrical stimulation medical device. LifeWave™ BST (Bed Sore Treatment) is a sophisticated medical device designed to treat chronic wounds using unique technology that leverages the body's natural healing powers by stimulating “life signs” that renew blood flow in order to induce local cell regeneration and wound healing.

LifeWave’s BST includes a device and a pair of electrodes that are placed directly on the skin surrounding the affective areas and are connected to the device. LifeWave BST delivers a unique patented waveform signal transmission that mimics the naturally occurring pulses of healing wounds (“normal wounds”) and creates an electric induction field around the hard-to-heal wound. This in turn accelerates the healing rate. The electric induction field facilitated by BST ensures therapeutic success for chronic wounds where deterioration of the tissue is so severe that the electric potential is cut off and as a result, no healing process in induced. As such, BST is positioned to treat severe stage 2 and stage 3 wounds including pressure ulcers, diabetic ulcers and venous ulcers.


The nervous system interprets the transmitted pulse from the damaged area and in turn, initiates healing activity to the necrotic tissue. The healing of the chronic wound is visible as the necrotic ulcer dissolves and new skin and muscle tissue are generated within the first days of treatment. The development of this patented device is predicated on the observation that the electrical impulses that were measured during the natural healing process of healing wounds are absent or weak when the body sustains chronic pressure ulcers.

Treatment with the LifeWave™ BST device is non-invasive, painless and efficient. Tried successfully in multi-center, controlled clinical trials, use of the LifeWave BST has effectively accelerated the closure and area reduction of non-healing pressure wounds stage 2 and 3 of 10cm2 or smaller among a significant number of patients.

BST device is designed for both hospitals oriented treatment as well as nursing homes treatments. The device includes a software and hardware system, and storage capabilities to document patients’ protocols and results.

Buy?

Mall Project: Approved

The Mall Project received the last permit: Ministry of Health. All the official permits (that were in my area) are in: Fire Control, Ministry of Health, Rishuy Asakim (Business Register), Vaada Mekomit (Local Planning Commission). At this point I can submit the second bill.