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June 25, 2016 / 19 Sivan, 5776

Posts Tagged ‘investment’

What You Need in Order to Retire (Podcast)

Wednesday, February 6th, 2013

When should you start planning for retirement? In your twenties, or in your fifties? In the second part of this week’s Goldstein on Gelt show, Doug meets Terry Savage, a well-known expert on personal finance. Terry, author of The New Savage Number: How Much Money Do Really You Need to Retire? tells us why time is more important than money and why you need to start planning for retirement even when you’re still young. Find out more about what you need for your golden years and when you should start teaching your kids about money.

Doug Goldstein, CFP®

Israel’s Economy Endures Global Economic Meltdown

Sunday, January 6th, 2013

1.  Israel’s 2009-2012 economic growth of 14.7% leads the OECD countries, ahead of Australia – 10.7%, Canada – 4.8%, USA – 3.2%, Germany – 2.7%, France – 0.3%, Euro Bloc – 1.5% decline.  Israel’s growth was undermined by the stoppage of natural gas supply from Egypt, which requires the acquisition of more expensive sources of energy (“Israel Hayom”, Jan. 2, 2013).

2.  Israel’s 2012 economic growth, 3.3%, leads the OECD countries which average 1.4% growth, ahead of the US (2.2%), Canada (2%), Japan (1.6%), Brazil (1.5%), Germany (0.9%), France (0.2%), Britain (0.1% decline), Spain (1.3% decline) and Italy (2.2% decline), trailingIndia’s 4.5% and China’s 7.5% .  Israel’s growth per capita, 1.5%, exceeds OECD’s average of 0.7%.  Israel’s unemployment, 6.9%, is lower than the OECD (other than Germany’s and Japan’s) which averages 8%.  Israel’s private consumption increased 2.8%, compared with the OECD average of 1%.  Notwithstanding the global meltdown, Israel’s exports grew 1% at a time when most countries experience a substantial decline in exports (Globes Business Daily, December 31, 2012).

3.  Israel’s 2012 tourism – all time high of 2.9 million tourists, compared with 2.8 million in 2011.  American tourists lead the pack, ahead of Russia, France, Germany and Britain. Domestic tourism grew 3% (Ma’ariv, December 25).

4.  Australia’s $30BN Woodside Petroleum (WPL) is acquiring 30% of the rights of Israel’s Leviathan offshore natural gas field licenses for $696MN upon signing the agreement in February, 2013, $200MN upon launching exports, $350MN upon final decision to invest in liquefied natural gas export facilities, 11.5% royalties up to $1BN and $50MN for immediate oil exploration underneath Leviathan.  Woodside explores investment in additional Israeli offshore natural gas licenses (Globes, Dec. 4).

5.  The $1.6BN Minnesota-based Stratasys merged with Israel’s $1.4BN Objet (3D printers manufacturer), a week following the acquisition of Israel’s Retalix, by NCR, for $800MN. Objet’s market value before the merger was $634MN (Globes, Dec. 4).  The $10BN Wollingford, CT-based Amphenol acquired Israel’s Tel-Ad for $65MN; the US storage giant, EMC, made its 5th Israeli acquisition, More IT Resources, for $15MN.  EMC employs 1,000 persons in its Israeli research and development centers (Globes, Dec. 3).  Israel’s CrossRider was acquired by an overseas unidentified company for $37MN (Globes, Dec. 17).  The Menlo Park-based Greylock Venture Partners and the Palo Alto-based Norwest Venture Partners led a$12MN 1st round of private placement by Israel’s ScaleIO (Globes, Dec. 11).

6.  Google inaugurated its Israeli Start Ups Incubator, signaling its aim to expand its Israel operations (Globes, Dec. 11). The Holland-based Philips announced the establishment of a new research & development center in Israel, which will employ scores of scientists and engineers.  Philip’s research & development center in Haifa – which coordinates special applications developed in Israel the US, Holland and India – employs 600 persons, specializing in CT 3D imaging (Globes, Dec. 13).

7.  Electricite’ de France’s (EDF) renewable energy unit inaugurated its first three projects in Israel’s Negev – a $65MN investment.  EDF plans additional ventures in Israel, demonstrating its confidence in the viability of Israel’s economy (Globes, Dec. 19).

Visit The Ettinger Report.

Yoram Ettinger

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®

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/are-your-investment-decisions-rational/2012/09/28/

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