Iran bets on dinosaurs, Buffet bets on Israeli brains
Posted on June 10, 2008 • By Miriam Schwab
Category: Financial View Comments
Thomas Friedman posed a question to his readers earlier this week in The New York Times:
What do America’s premier investor, Warren Buffett, and Iran’s toxic president, Mahmoud Ahmadinejad, have in common? Answer: They’ve both made a bet about Israel’s future.
Yet again, Ahmadinejad announced that Israel would be wiped off the map. Friedman says that ironically, he heard this declaration while exiting Iscar’s headquarters in northern Israel – Iscar being Warren Buffett’s first and largest international investment.
The deal to buy 80% of Iscar closed a few days before Hezbollah started bombing northern Israel in July 2006, putting the company at serious risk. Friedman asked Iscar’s chairman, Eitan Wertheimer, what Buffett’s reaction was to the rockets landing in the vicinity of his new investment.
Buffett just brushed it off with a wave, recalled Wertheimer: “He said, ‘I’m not interested in the next quarter. I’m interested in the next 20 years.’ ”
Why is Buffett betting on Israel? Friedman lists some impressive details about Israel’s economy, including the fact that tiny Israel attracts the third-highest amount of venture capital after the US, coming in after China and before India. On the other hand, Friedman says that Iran has invented nothing of importance since the Islamic Revolution.
So who should you bet on? Friedman says he’d long Iran, and short Israel, since Iran’s might depends solely on dwindling sources of fossil fuels, while Israel’s strength is entirely dependent on a sustainable, endlessly renewable resource: its people’s brains.
So who do you bet on?
“I’m with Buffett,” Friedman ends off, “I’ll bet on the people who bet on their people – not the people who bet on dead dinosaurs.”
[Via Israel Newsletter]
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Buffett is spelled with two t’s. Buffett.