Israel: Farewell

No other city has so shaped this earth’s history and destiny as has Jerusalem. Many of the world’s greatest empires, nations, and individuals have concerned themselves with Jerusalem. Egyptians, Hittites, Assyrians, Babylonians, Persians, Greeks, Romans, Byzantines, Muslims, Crusaders, Turks, British, Arabs, and Israelis have all paraded through the pages of Jerusalem’s history.
— Jerusalem: The Eternal City

Whether or not you invest directly in Israel, it seems likely that your investment portfolio will be impacted in future by events that happen in Israel.  I have visited many countries and cities, but I have never visited a place quite like Israel.  Tel Aviv and the old city of Jerusalem seem like completely different countries, but both were compelling.  Israel has the most unique blend of “old” and “new” of any place I have visited.

Calling Israel “old” does not do it justice—Israel is ancient.  It seems like every rock has an interesting story.  It is symbolic and sacred for Jews, Muslims, and Christians.  The contrast, tension, and coexistence is remarkable to witness.  We visited Jerusalem’s Old City on a Friday, during Ramadan.  It was an incredible experience to be swept up in the mass of humanity moving through the narrow streets to Friday prayers.  The smells, the sounds, the foods—Israel is completely unique.

Ten measures of beauty descended to the world, nine were taken by Jerusalem.
— Talmud: Kiddushin 49b

So what about Israel as an investment?  It is impossible not to be impressed with the economic vitality in Israel.  The economic/scientific/cultural contribution made by this tiny country has been and will be significant.  Israel has a highly credible central bank that controls inflation.  Israel values foreign investment.  If Israel has so many positive investment features, then why is there concern about investing in Israel?  Israel exists in a difficult neighborhood to say the least.  Much of the concern boils down to concern about security.

My conversations in Israel point to a people and culture that are resilient.  They have overcome a difficult history, geography, and climate.  They flourish despite constant threats.  A prominent business leader described making phone calls, then being interrupted by air raid sirens, and then going back to the phone call as if nothing had happened.  Economic, political, and cultural resilience are attractive attributes for long-term investing.

Israel’s history is filled with conflict and conquest, and this continues to this day.  I could fill pages from interesting conversations about the current security situation in Israel.  Just as in times of old, the world has its eyes on Israel.  Interestingly, the eyes of Israel are on the United States.  More than any other country, I have been asked by locals about the upcoming U.S. presidential elections. 

Israeli mother and son

Israeli mother and son

In a place of such historical conflict, it is worth highlighting the extraordinary kindness shown to us by so many in this country.  A quick story—I left the Bank of Israel in the Givat Ram neighborhood of Jerusalem.  We had the intention of walking to the famous Mahane Yehuda market.  Our map and GPS took us through a beautiful park, but the GPS was unable to direct us through the maze of paths to the correct street.  I saw a young mother with two boys playing in the park, and I asked her for directions.  It was quickly obvious that she spoke only Hebrew, and we could not communicate.  I tried to thank her and move on, but she communicated enough that we should follow her.  She continued to insist, and we followed her through the maze of paths out of the park.  Once out the park, I was able to find our location on the GPS.  I again thanked her, and was ready to move on.  She stopped someone on the street and had them translate to us that she wanted to show us a short-cut that would save us time and distance.  We walked through alleys and neighborhoods (all very safe) right to the market.  A quick thanks and she and her two boys were gone.  She could have easily allowed us to move on, but she literally took us to the market.  A kind act of a young Israeli mother provided a glimmer of hope in a troubled part of the world.

One Israeli joked to me that if you talk to two Israelis, you will get three opinions.  My opinion—Israel will be an important country and financial market for all of us in the coming years.