A Robust Way to Play the New Economy
If you have read my book, The Israel Test, you know that there are many reasons to love Israel and invest in it.
Take Gerard Frigon, founder of Taylor Frigon Capital, for example. He is a faithful Catholic with a fervid belief in Israeli technology.
It reached a recent peak when he needed to refurbish his company’s web site. After sampling US solutions that cost some $20,000, he discovered an Israeli company called Wix.com. Wix’s software as a service enabled him to do his ecommerce site himself in a more resourceful and engaging way for between $20-50 per month.
“The tools that they gave me make it absurdly simple to run everything from a basic display site to an ecommerce bazaar,” Frigon told me in his home on a hill in Paso Robles, CA.
Then he invested in Wix (NASDAQ: WIX) for his fund, and it went up 555.32% in three years. Like 70 other Israeli firms, from AudioCodes (NASDAQ: AUDC) business Skype calls to Tower Semiconductor (NASDAQ: TSEM) analog chip fabs, Wix turned out to be readily purchasable on the NASDAQ.
Bountiful Opportunities Lie in Israel
With such investments, Frigon has created a lucrative outpost of Israel deep in the vineyard country of the central coast of California. A spearhead of his Taylor Frigon Core Growth Fund (TFCGX), it dramatizes our belief in the prophecy that every investor should have an Israel strategy.
If you have a tumor, or a need to circumnavigate traffic, or a desire for artificial intelligence (AI), or are in need of merely a fast, easy way to imprint your t-shirt, Israeli companies have unique solutions for you.
Or to sum it up, if you need to turbo-charge your investment returns, Frigon has an Israeli solution for you.
Most US tech companies already use Israel as a secret sauce. From Intel’s leading microprocessors to Microsoft’s Kinect interface, from Google’s Waze navigator to IBM’s Watson artificial intelligence, and now to Nvidia (NASDAQ: NVDA) and its impending Mellanox Technologies (NASDAQ: MLNX) chip company purchase, key assets of US information technology come from Israeli labs and acquisitions.
Just by buying the shares of these US companies, you end up with a significant stake in Israel. Even just living in America you benefit from Israel’s ever advancing “Iron Dome” missile defense components and systems or from its multiple contributions to American fighter jet designs.
But since its 2015 inception, Frigon’s fund has outperformed the vast majority of other US mutual funds by plunging deeply and directly into an array of Israeli companies. Israel is central both to its growth fund and his company’s unique Israeli-only separate account strategy.
Israeli winners tend to be generalists, combining into breakthrough syntheses the key advances of the day, from 5G wireless to the internet of things (IoT), from information theory to biotech, from analog chips to the Cryptocosm of blockchain and smart contracts.
Even Vitalik Buterin formed the global blockchain smart contract leader, Ethereum, after a visit to Israel.
Beyond Wix and web pages, consider Novocure (NASDAQ: NVCR) and cancers. Novocure tunes the electromagnetic spectrum to disrupt cancer cells. Founded in 2000 in Haifa by Yoram Palti, an expert in electrophysiology and biophysics, Novocure has become a stock market star by developing tunable tumor-treating fields.
Adapted to specific cancer cells, Novocure’s radiations drastically retard the processes of cell division in a wide variety of solid tumors.
With a market cap of $4.5 billion, up three-fold in less than a year, Novocure seems richly valued. But its technology has a long run ahead, keeping deadly cancers like glioblastomas at bay while new cures are being developed around the world.
Novocure is relatively far along in its career, but Frigon also has invested in a number of earlier stage ventures. Disrupting the one trillion-dollar global textile manufacturing market, for example, is Kornit (NASDAQ: KRNT).
A public company since April 2015, Kornit has developed advanced — but radically simplified — methods for digital printing on textiles. Reducing the usual process from five steps to two steps and obviating pre-treatment machines, Kornit enables dynamic customization of fabric printing without blowing up the cost.
To take advantage of a global technology boom manifested in rapidly declining prices for all major commodities (see previous Daily Prophecy’s on the “time-price”), successful investors will increasingly turn to opportunities in China and the Cryptocosm.
These investments tend to require considerable sophistication to buy.
But as the Frigon team has proved, if you seek a simpler more robust way to play the new economy, you simply cannot beat a series of investments in Israel.
We will be exploring this paradigm in future prophecies.
Editor, Gilder’s Daily Prophecy