Now Is the Time to Invest in Israeli Companies

Habima Theater Plaza, Tel Aviv

In our 2024 Q1 newsletter “Rhetoric vs. Reality: Israelʼs Remarkable Resilience,” we outlined the challenges the Israeli economy faces in the near term. Despite a rebound in economic activity during the first quarter of 2024, Israelʼs economic disruption remains substantial, and the looming threat of a more destructive conflict with Hezbollah in Lebanon persists.

We believe these risks are reflected in Israelʼs very low stock market valuations. The recent bond auctions and the stock market rebound in the first quarter suggest that investors anticipate Israel’s economic growth engine remains fundamentally intact over the long run.

The Wall Street Journal’s article dated August 13th, 2024, “Now Is the Time to Invest in Israeli Companies” mirrors our sentiment, particularly when the authors state, “We have dedicated our careers to Israel investing, and our reasons start with business fundamentals.”

As long-term investors, we focus on the big picture. When we look back in the future, we believe that most of our portfolio companies will have generated revenue and earnings growth, even if the coming years are challenging. The substantial recovery since October 7th indicates that most Israeli stock market investors agree. At a more granular level, we believe sector performance hinges on whether long-term opportunities outweigh near-term uncertainties.

Israelʼs detractors may be loud, but those with real financial power are quietly placing their bets on Israel and the country’s future.