Warren Buffett Wants You: To Buy Israel Bonds
22 Junio 2017 - 4:59AM
Noticias Dow Jones
By Nicole Friedman
Warren Buffett, the world's most famous stock picker, has a new
sales pitch: buy Israel's bonds.
The billionaire investor and Berkshire Hathaway Inc. chairman
hosted a lunch and dinner in New York last week to encourage
investments in Israeli bonds. The events raised about $150 million
in investments, according to the Development Corp. for Israel, the
broker-dealer that sells Israeli bonds.
Mr. Buffett, of course, is better known as a booster of stocks.
He recommends that nonprofessional investors put their wealth in
low-cost stock index funds and often says the stock market will
continue to rise in the coming decades.
But he said many wealthy people hold bonds, because they are
more concerned with maintaining their wealth than achieving the
highest returns. The wealthy are whom Mr. Buffett has targeted with
his pitch.
"I do not tell them that bonds are a place to put your money
generally, but I will tell them that you're going to get paid back"
by investing in Israeli bonds, said Mr. Buffett in an interview.
When Mr. Buffett was seven, he requested a book called "Bond
Salesmanship" for Christmas.
He said he likes to invest in Israel because it is a success
story, similar to the U.S. Both are relatively new countries that
have been founded on open markets and an entrepreneurial
spirit.
"From the standpoint of accomplishments beyond the financial
returns...I think that it's an excellent choice."
Mr. Buffett's ties to Israel and to the American Jewish
community go back decades. His first wife, Susie, had Jewish
friends and traveled to Israel, he said. Mr. Buffett told attendees
at last week's dinner that many of the most important mentors in
his life were Jewish, said real-estate developer Larry Silverstein,
who attended the event.
The yield on the benchmark 10-year Israel government bond was
2.055% Wednesday, according to Thomson Reuters, down from 2.063% at
the end of last year. Yields fall when bond prices rise. Israel's
economy grew 4% last year and is projected to grow 3.25% this year,
according to the Organization for Economic Cooperation and
Development. Israel's currency has risen against the dollar this
year, and the country's central bank opted last month to keep its
benchmark interest rate at a record low.
Mr. Buffett's connection to Israeli bonds started last year.
Berkshire Hathaway Guard Insurance Cos., a commercial insurer in
Wilkes-Barre, Penn., that Berkshire acquired in 2012, held Israeli
bonds that were set to mature. Development Corp. for Israel, which
is commonly known as Israel Bonds, couldn't confirm whether the
company wanted to reinvest. The corporation's regional director
wrote a letter to Mr. Buffett, who called back, agreed to reinvest
and invited Israel Bonds officers to visit him in Omaha.
"He really liked the fact that he could support Israel...through
the purchase and investment in Israel bonds," said Stuart Garawitz,
Israel Bonds' vice president of sales, who visited Mr. Buffett in
Omaha in April 2016.
Mr. Buffett subsequently hosted a dinner for 40 in Omaha in
November, which raised $60 million for Israeli bonds, including $5
million of Mr. Buffett's personal money.
Berkshire invested $4 billion in Israeli metalworking company
Iscar in 2006, the conglomerate's first foreign acquisition, and
Mr. Buffett traveled to Israel to see the operation. He later
toured Europe with Iscar executive Eitan Wertheimer to try to drum
up more overseas deals.
Mr. Buffett also donated $10 million to a hospital in Israel in
2013, according to press reports at the time.
Write to Nicole Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
June 22, 2017 05:44 ET (09:44 GMT)
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