Lessons Learned From Traveling With Senator Rand Paul
by Marc Lichtenfeld, Investment U Senior Analyst
Wednesday, January 23, 2013: Issue #1954
It doesn’t happen often, but every once in a while, you open up your email inbox and find a message that makes your day.
In my case, it was a note from Dr. Mark Skousen, who I’m sure you know from his frequent contributions to Investment U and his many books. I have enormous respect for Dr. Skousen and was glad to hear that he agreed with my column that Israel is a market investors should not ignore – especially considering it’s outperformed the S&P 500 by 1,305% since 1999.
He wrote:
“From: Mark Skousen
Sent: Wed 1/16/2013 12:55 PM
To: Marc Lichtenfeld
Subject: Fwd: Don’t Ignore This Emerged Market
I just got back from a one-week, fact-finding tour of Israel with Sen. Rand Paul and was going to write up Israel as an investment choice! Sic transit gloria mundi!
Mark”
Since I beat Dr. Skousen to the punch (probably only due to jet lag), I asked him if we could talk about his trip for the purpose of a follow-up article. He generously agreed.
Marc Lichtenfeld: What was the purpose of your trip to Israel?
Dr. Mark Skousen: A group of us went over with Senator Rand Paul on a fact-finding mission. Senator Paul met with Israeli Prime Minister Netanyahu, the mayor of Jerusalem, the King of Jordan. He was just appointed to the powerful Foreign Relations Committee. That’s quite a coup for a junior senator.
ML: What was your impression of the country?
MS: There’s still a lot of divisiveness. I was in the Old City of Jerusalem and wanted to buy some rosary beads. I went into a shop and said to the guy, “I don’t want beads made in China, I want some that were made in Israel.” The shopkeeper said to me, “We don’t have any. We have some made in Palestine.”
There were other stories that I heard about how divisive it is there, but it’s hard to argue against their economy.
ML: What do you mean?
MS: This was my third trip to Israel. My first was in 1980. The economic progress over the last 30 years is shocking. Especially when you consider the lack of progress in many of the other Arab countries that surround Israel. Egypt, for example, has had no change in their economy for over 30 years. But in Israel, there’s construction everywhere you look.
We stayed at the Mamilla Hotel in Jerusalem. It’s a really nice hotel. Right behind it is a huge shopping mall with first-class stuff from all over the world, and it’s in walking distance of the Old City.
ML: To what do you attribute the success of the Israeli economy?
MS: Israel used to be a socialist country. But now due to privatization, incentives and deregulation, it has grown tremendously.
I stayed at a kibbutz…
ML: You stayed at a kibbutz?! I have a hard time picturing you staying at a place that’s the epitome of socialism.
MS: Well, that’s just it. It’s really interesting how it’s changed. They told us how in the past everyone was paid the same no matter what the job was. It was socialism at its purest, but it just didn’t work. And they couldn’t keep the younger generation. So now they’ve moved to a being a private organization. They had to provide incentives, and those incentives worked.
ML: Does Israel’s problems with its neighbors discourage you from investing there?
MS: There’s certainly more risk, but no, I think there are some great companies there. They do really well in technology. They lead the world in biotech.
But there’s an arms race in the Middle East. If the United States sells 20 F-16s to Egypt, Israel believes it has to buy 25. The prevailing thought is that the arms race keeps a balance of power.
Additionally, we give more foreign aid to non-Israeli Middle East countries than to Israel, much of which is used for hate propaganda against America.
Senator Paul has introduced legislation to stop this and to eventually phase out aid to Israel and its neighbors.
I’m very excited that he’ll be speaking at this year’s FreedomFest. You can go to www.freedomfest.com for more details.
ML: Any companies that you want to mention?
MS: I’m still doing my research, but I think the ones you mentioned last week are a good start. Also, there are many laboratories engaged in agriculture research. I think that’s very interesting.
ML: Thanks for your time, Dr. Skousen.
MS: My pleasure. Thank you.
Interesting to note that yesterday Prime Minister Netanyahu was re-elected. Surprisingly, however, a new centrist party captured many more seats in Parliament than anticipated. It was believed that if Netanyahu was re-elected with a right-wing Parliament as expected, it’d be seen as a green light for war with Iran. Now, with this centrist party grabbing power, it should serve as a stabilizing force in the Israeli government – which would certainly be good for the economy.
As I mentioned last week, I am leading a biotech tour of Israel in April and will be staying at the gorgeous Mamilla hotel mentioned by Dr. Skousen. We will visit with innovative companies that are both publicly traded and private. We’ll also have an exclusive meeting with the Deputy Governor of Israel’s central bank.
For more information on the trip, click here or email Barb Perriello.
Good Investing,
Marc
Lessons Learned From Traveling With Senator Rand Paul,Any investment contains risk. Please see our disclaimer.
6 Responses to “Lessons Learned From Traveling With Senator Rand Paul”
Comments
By submitting your comment you agree to adhere to our Comment Policy and Privacy Policy.
Check out our selection of daily investment research:
 |
 |
Marc is a senior analyst at Investment U. His investment career started out at the trading desk of Carlin Equities in San Francisco, CA, where he executed dozens of trades each day for his clients.
Mark Skousen’s comments on Israel include some of the most naive, ill-informed…and just plain silly…remarks I have seen in a long, long time. He clearly didn’t learn much on his visits.
Jerusalem’s Old City was part of Jordan until 1967, when the Israelis took it over in the war that year; Mark almost certainly went to a shop owned by an Arab (Palestinian) who is not a “citizen” of Israel. The beads could well have been made in the West Bank or Gaza Strip, at some point meant (even by the Israelis) to be part of the future “state of Palestine.” The shopkeeper’s response was perfectly logical. And just the silliest “example” to use of “divisiveness” in Israel. You’d have to have lived on another planet not to know there are hugely contentious issues (the future status of Jerusalem being one major one) between the Israelis and Palestinians. And the “divisiveness” works on both sides: the Israeli Government has built huge walls, for one thing, to keep the Palestinians segregated in numerous areas, with checkpoints controlling their movements.
As far as Mark’s comment that “we give more foreign aid to non-Israeli Middle East countries than to Israel, much of which is used for hate propaganda against America”: That comment just boggles the mind: “much” of the aid? Nonsense…that couldn’t even possibly be quantified. Or “hate propaganda” defined. Any criticism…is that “hate propaganda”? And so what that we give “more foreign aid to non-Israeli Middle East countries”? We have more than one “ally” in the Middle East among the “non-Israel” countries. Mark should look up the Camp David Accords, which stipulate US aid to Israel and Egypt.
Clearly Mark should stick to financial/market issues.
Reply
hehehe.. it’s nice. someday I go Jerusalem, too
Reply
I think Marc’s planned tour of Israel sounds fascinating (I’ve lived in both Israel and Jordan)…and yet the itinerary is astonishingly narrow-minded in the most unfortunate ways. The tour of Israel is clearly designed to “officially” avoid any Arab/Muslim “taint”…when the benefits of having Americans learn (especially first-hand) more about the Israeli-Palestinian issues couldn’t be greater.
Pointedly avoiding Jerusalem’s Dome of the Rock, the third holiest site in Islam, and the al-Aqsa Mosque is just patently absurd. The itinerary notes, for one thing, that the Wailing/Western Wall is “one of the most sacred sites in Judaism outside of the Temple Mount itself”…then why not take the tour members to the “Temple Mount”? It’s only steps away from the Western Wall…and of infinitely more general “tourist” interest. Why not tour the Muslim Quarter, the largest, most populous, and frankly most interesting of the four Jerusalem Old City areas?
Hopefully, the time spent at the American Colony Hotel and some of the other areas to be visited will give the tour members a certain feel for the Arab/Muslim influence in Israel…since it is absolutely critical to the environment, investing and otherwise, in that country. But the lack of such tour planning is pretty incredible.
Reply
This article is so insulting to the reader’s intellect. I smelt fact twisting from the beginning of the article. The author mentions that us aids Arabs countriies more than israel (financially) so I did some research on us gov website. This is what I found: the highest aid to the Middle East is to Israel with 3.025 billion $ which represent around $389 per capita. second highest is Egypt with 1.558 billion $ 19 per capita. The third is Jordan with 0.682 billion $ which represent $110 per capita. So my question to the author is how did you conclude that the us gives more money to the Arab countries than Israel.
The second thing is that you say that Arab countries use the money to hate the us. While this money is very scrutinized to be spent on specific programs that are set by us congress. Please name one program designated to hate the us that congress is financing knowingly or not. I understand that the author is Jewish. But using a finance article as a racist propaganda is absurd. I used to read your magazine frequently but I will cancel my membership because I do not allow anybody to manipulate me or insult me intellectually in such a way
Reply
Jason,
Your “contrary” contribution is critically important as it presents a more comprehensive picture (with facts) that the original article did. As a fellow reader, it is important to have someone present the opposite picture, especially in an area where there is so much conflict. Thank you and please continue your membership and expressing your ideas.
Reply
Boy, the Antysemites are livid! Good for you, Marc- it was to be expected…
Reply