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May 2, 2016 / 24 Nisan, 5776

Posts Tagged ‘investment’

Microsoft CEO: Israel Is the High-Tech Country

Tuesday, November 13th, 2012

1. “[Australia’s] $30BN Woodside Petroleum is looking at taking an interest in the giant Leviathan gas field off the coast of Israel…. The Leviathan field, discovered in 2010, has an estimated 17 trillion cubic feet (TCF) of gas, making the biggest deep water gas discovery of the past ten years. 50-75% of the gas is slated for export….  Woodside Petroleum Ltd. bids for 30% of the rights to the Leviathan licenses. It is 50% higher than their market value. Woodside is one of the finalists in the licensees’ choice for a strategic partner.

“Woodside’s bid reflects a value of $7.5 billion, compared with analysts’ estimates of $4.7-5.5 billion for the gas field…. ‘Petroleum Intelligence Weekly’ reported that [Russia’s] GazpromWoodside and apparently South Korea’s Korea Gas Corporation (Kogas), are finalists in the Leviathan process…. [The Houston-based] Noble Energy [which controls 39.66% of Leviathan] prefers a Western partner for Leviathan.

“Woodside would fit the bill for Noble Energy: it is a veteran company with deep water expertise as well as building liquefied natural gas facilities for gas exports from its fields off Australia’s northwest coast. This area is considered the most developed in the world, attracting hundreds of billions of dollars in investment in onshore and floating LNG facilities” (Globes Business Daily, October 22, 2012).

2. Steve Ballmer, Microsoft’s CEO 4th visit to Israel: “I’ve arrived to Israel, the high-tech country…. The integration between Microsoft and Israel is natural, because Israel’s high-tech industries are among the global leaders…. I’m energized and inspired by Israel’s innovative capabilities, which have made Israel an important arena for Microsoft….” (Globes, November 2).

3. Intel Corp. CEO Paul Otellini is in Israel: “We are perhaps the largest private employer in Israel (about 8,000 employees in the company’s development and production centers), and most of those employees have technological know-how. Some of our most sophisticated engineering efforts are carried out in Israel…. We have been in Israel for 40 years and we have done many things. We’re here for the long term and we will decide next year regarding our next factory.”

Otellini visits Israel in order to launch the company’s $5 million investment in Israeli high schools over the next four years, in partnership with the Ministry of Education. The project’s aim is to double the number of high school students completing their science and technology matriculation certificate (Globes, November 2).

4. According to the $56BN Swiss bank, UBS – which is currently expanding its Israel wealth management operations – Israel is among the top five promising economies with the highest growth potential.

5. “The UK law firm Berwin, Leighton Paisner (BLP) LLP, Britain’s fifth largest, with 1,000 attorneys worldwide, is expanding to Israel, opening an office in Tel Aviv as part of the expansion of its international operations. The firm’s customers include 59 companies on the Global Fortune 500 list. Its decision is a vote of confidence in Israeli economic growth…. ‘We’re here because the Israeli business world is heading in directions which we see as markets of the future, like China and the Far East…. BLP sees the steady business growth of Israeli companies’ activity in international markets….(Globes, Oct. 30).’”

Visit The Ettinger Report.

Yoram Ettinger

Bank of Israel Restricts Mortgages Severely, Looking to Avert Future Real Estate Crises

Tuesday, October 30th, 2012

The Bank of Israel’s Supervisor of Banks David Zaken on Monday published a draft directive limiting the loan-to-value (LTV) ratio in housing loans, as of November 1, Globes reported.

The new directive stops banks from giving mortgages with an LTV of more than 70%, with an exception for first-time buyers, who are allowed mortgages of up to 75% of the value of the apartment.

Mortgage customers who buy an apartment for investment will be limited to 50% LTV. The directive will go into effect after a discussion in the Advisory Committee on Banking Matters.

The Bank of Israel announced:

“In recent years, we have seen negative developments in the housing market and the housing credit market. The draft directive has been published against the background of the marked increase in recent years in the balance of housing credit and the increase in home prices in Israel. Recent trends in the housing market indicate an increased number of transactions, an increase in the monthly level of mortgages granted and an increase in investors’ volume of activity, among other things against the background of the low interest rate environment in mortgages.

“These developments impact on the risk level inherent in the banks’ credit portfolio – the accelerated increase in the housing credit portfolio on banks’ balance sheets is liable to include risks to the stability of the banking system, primarily in light of the correlation between the housing credit portfolio and the construction and real estate credit portfolio. These represent, as of June 30, 2012, about 40 percent of total balance sheet credit risk.”

According to the Bank of Israel, many of the recent financial crises in foreign countries began with granting housing credit at terms that did not reflect the risks developing in that market.

The new directive is intended, says the Bank of Israel, to reduce the effects of a crisis in the real estate market by reducing the risk inherent in taking out a housing loan with a high loan-to-value ratio.

Jewish Press Staff

Gold Buyers Beware: Fraudulent Gold Found in the Marketplace

Monday, October 22nd, 2012

A fake gold bullion bar makes a fine gag gift, but think twice before making it part of your investment portfolio.

What would happen if the gold bars you bought from a reputable dealer were “salted” with tungsten?

Word has been spreading that some gold experts have cracked open the gold bars that they bought only to discover tungsten (a metal worth about one-fifth of the value of gold) inside. Since tungsten has a similar density to gold, it’s easy to confuse people, amateurs and experts alike. With bars of gold that weigh ten ounces or more, using regular x-rays to determine the chemical composition of the metal doesn’t work well since the x-rays don’t penetrate deep enough.

Some alarmists have referred to the recent findings as evidence of a possible market-shattering conspiracy. What if there are hundreds or thousands of counterfeit bars of gold sitting in the vaults of companies and governments? If you can’t trust that the gold you buy is genuine, would you really buy it? Regardless of the veracity of the possibility that gold supplies are tainted, if people simply think that they are, the price of the commodity could start tumbling.

An additional way that falsified gold bars can affect the price of gold is that it also increases the cost of ownership of gold, as there may be increased costs involved in higher level testing for purity.

Regardless of how you purchase your gold, beware of the possibility that the whole gold marketplace might be affected by some bad eggs… just a reminder that you shouldn’t put all your eggs in one basket, no matter how shiny it is.

Buying novelty fake gold coins or a 24K gold dipped real rose is fine if that is your aim, but before you buy gold for an investment, you might want to read my previous post on buying gold.

Doug Goldstein, CFP®

Israel on Campus Coalition Joins Up with Student Investment Group

Wednesday, October 17th, 2012

The Israel on Campus Coalition announced a new partnership with the student-run TAMID Israel Investment Group, connecting American business students with business and investment opportunities in Israel.

The program began at the University of Michigan in 2008 and is now estimated to have 300 members at UC Berkeley, Brandeis University, Harvard University, University of Maryland, University of Illinois, University of Miami, University of Michigan, Penn State University and the University of Southern California.

TAMID makes participants managers of investment funds or consultants for Israeli startups after a semester of educational seminars.  Students complete the program by interning in Israel with the TAMID Fellowship Program.

Malkah Fleisher

Are Your Investment Decisions Rational?

Friday, September 28th, 2012

As a financial planner, I often ask new clients why a particular investment is included in their portfolio. One answer that I find somewhat worrying is: “I don’t really know how to explain it, but I just had a gut feeling that this stock was going to be a winner!”

Often the stock in question is anything but a winner, but that isn’t the point. If you were to fit a new kitchen, would you simply walk into a builder’s showroom and say that you wanted the kitchen cabinets that are in the storefront window because you had a “gut feeling” about them as soon as you saw them, or would you first visit several showrooms, research the types of materials used and other factors that are important to your decision? Of course you wouldn’t order home renovations based on gut feelings, because thousands of dollars are at stake, as well as the fact that you will have to live with the results of your decision for a very long time.  Just like investing.

Yet very often, investors base their financial decisions on irrational reasoning.

The way that emotions affect investing has become a science and much research is conducted into various phenomena such as loss aversion, mental accounting, and herding. Emotions influence investors’ decisions in many more ways than you would expect. Sometimes fear drives an investor to sell a stock because a sudden dip in the market makes him afraid he’ll lose everything. And, at the other end of the spectrum, is the person who did well with a certain small investment, and figures that because he did well once, he’s bound to do even better if he does it again. He continues to invest in something that might not be appropriate at increased levels, just because he wants to duplicate his previous “win.”

On my radio show, Goldstein on Gelt, I interviewed several researchers who study behavioral investing, including Professor Terrance Odean of Berkeley University, Nobel Prize Winner Professor Daniel Kahneman, and best-selling author Professor Dan Ariely (click on their names to watch videos of these interviews). Watch the videos and let me know if the research on behavioral finance jives with your investment decisions.

Doug Goldstein, CFP®

The Four Most Common Financial Mistakes

Monday, September 24th, 2012

As a financial adviser I notice that certain money mistakes are very commonplace. Are you making these kinds of errors that can destroy a fortune?

Instead of learning from your own mistakes, try learning from other people’s mistakes. Below is a list of some of the most common mistakes in financial planning:

1. Putting off buying life or health insurance. Even if you are still young and you belong to the mindset of “it will never happen to me,” the truth is that you never know. Accidents, terror attacks, and sudden illnesses are all in the hands of the One Above, and although no one should ever go through life in a constant state of fear and worry, it’s important to be prepared for any eventuality. Think of your insurance policy as “risk management.”

2. Passing up tax breaks. When considering whether to buy or sell an investment, don’t only look at the figures. Find out what this means in terms of tax. How will the dividends/interest be taxed? Does the investment have any kind of tax deferral or tax-free status? While tax status shouldn’t be your sole concern in purchasing investments, make sure to keep tax liabilities in mind.

3. Buying or holding stocks for the wrong reasons. Are you holding onto a stock out of sentimental reasons, because you inherited it from a loved one? Are you thinking of buying a stock simply because you enjoy the company’s products? Don’t base your decisions on emotions. Do your homework, and only buy the stocks that make the most financial sense for you. If you are not sure how to work this out, consult with a financial planner.

4. Not taking enough risk. Some people are very cautious by nature, and they would prefer to invest their money with the least risk of loss. Although this might sound prudent because it minimizes the chance of loss, the other side of the equation means that your gains will be limited. Of course, the appropriate level of risk for you depends very much on your personal situation, so speak to your financial adviser about what is appropriate for you.

Keeping these four points in mind should help you avoid some of the most common money mistakes. Don’t make these mistakes, and if you do, visit a qualified Certified Financial Planner (CFP®) for help in fixing them.

Doug Goldstein, CFP®

How to Avoid Being the Next Ponzi Scheme Victim

Tuesday, September 11th, 2012

One of the main headlines in world financial news this August has been the fate of ZeekRewards.com, an online company that offered investors the chance to get rich quick. Interestingly enough, I heard about ZeekRewards before this company hit the headlines, when one of its salespeople contacted me and asked me to represent them. The very pushy salesman nagged me to set up a meeting, but the more he pushed me, the more uneasy I felt. So I decided to follow my mother’s adage of, “If it sounds too good to be true, it probably is,” and I didn’t meet him.

Reading the headlines, I’m very relieved with my decision. ZeekRewards offered promises of returns such as 1.5% of the investment at the end of each day and shares of 50% of the daily profits. Wouldn’t everyone want that kind of deal? However, this August, the Securities and Exchange Commission (SEC) filed an emergency action in a North Carolina federal court because this investment project was yet another Ponzi scheme.

The owners of ZeekRewards must have realized that many of these potential investors were going to ask questions. So, in a bid to protect themselves they added a clause for new users stating that they were not purchasing stock or any kind of “investment or equity,” and they even labeled the whole thing as an “e-commerce subscription.” The SEC saw through their ruse and said that this was not the case and in fact the company was offering its subscribers false securities. However, the average investor did not have the knowledge to understand what they were getting into, and the abovementioned clause probably sounded fair enough.

As people kept subscribing and playing the company’s game, investing and reinvesting, the company’s cash outflows began to exceed its total revenue, leading to a collapse and many unhappy subscribers who were left with nothing.

This time, there are more than 1 million victims of the scheme, making this the largest such bankruptcy case, with around $600 million at stake.

Interestingly, many observant Jews, both in Israel and America, have fallen prey to this scheme. It’s not the first time that Jews have been hit hard by Ponzi schemes (think Madoff).

This raises the question of why Ponzi schemes such as ZeekRewards are tempting to the religious Jewish community. One possible answer is that many religious Jews have large families and in this economic climate finances may be tight. Offer a person who is trying to find legitimate ways to support his family a way to make some extra money, and it’s tempting to find out more.

Sadly, as stated above, ZeekRewards is not a one-off story. Apart from desperation to make more money, another possible reason people fall for these schemes is that the scammers may have gotten smarter.

However, there are three basic measures that you could follow to protect yourself from falling victim in a financial scheme:

1. Remember my mother’s rule: “If it sounds too good to be true, it probably is.” ZeekRewards offered high gains for pressing a few buttons and looking at some ads. This is the first sign of something suspicious. When something sounds too good to be true, ask yourself, “What’s the catch?”

2. Do your research. One potential investor who decided against investing with ZeekRewards said that when he heard about it, he did his homework. He discovered that the company’s securities offerings were not registered with the SEC as required by U.S. federal law. Recognized authorities monitor investments for a reason; their absence speaks volumes.

3. Don’t feel pressured. If the company/salesman/friend keeps nagging you, saying that the investment opportunity will be gone if you don’t “buy now,” it may be wise to let the opportunity pass.

While there are no guarantees in the world of finance, taking these three steps will provide a basic level of protection against becoming a victim of the next Ponzi scheme that rears its ugly head.

If you are interested in hearing more about the biggest investment fraud in history, watch this TV interview that I did on the subject of Bernie Madoff. Although this was four years ago, the points remain the same. If anything, there are more frauds out there and we need to be more careful than ever. So be wary and tread with caution.

Doug Goldstein, CFP®

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/how-to-avoid-being-the-next-ponzi-scheme-victim/2012/09/11/

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