I play on the Tel Aviv Stock Market on a miniature scale and I am happy with myself. I am so sure of my luck that offered my daughter Ayala to invest her savings for her. She is 18 and works hard as a swimming trainer for children. It is a good trade in Israel as parents invest in the education and training of their children. It is especially good for children with motor problems. She gave me 5000 shekels to invest and garanteed her 7% profit. I offered her to buy Walla or Machteshim stock. Walla is a portal, the biggest of Israel. Machteshim is an Israeli chemical company that dominates the international generic agrochemical business and has a few patented products too. My offer was based on the idea that Walla was underpriced compared with American counterparts while internet use in Israel is higher than in the US. Effectively, a few days later a report came out that in 2005 some 10% of the publicity money went to the internet, meaning some 50% p.a. growth. Walla jumped 100% and doubled its value.
But we had bought Machteshim. This share was due to jump too, I thought, as it had announced that will spend 160 million US dollar in repurchase of its own stocks. I calculated that this will create demand for the share and increase its value. But in fact, the price went --- down! Not much, but is got stuck and I owed my girl a 7% increase! I wondered for days what the heck was happening - how can these be... On a board, someone ansewered me: People buys on the rumors and sell on the announcement. Meaning that the market already had discounted the stock repurchase plan, and rised the price, and stock market manipulators were selling on the actual announcement of the plan.
Two months have passed, and Machteshim got approved a new product, Rimon insecticide, in Italy and that caused the price to move up a bit. Already we are 5% over purchase price, we need 2% more. Pity I missed Walla by a second! But instead, bought Internet Gold - which is slowly moving ahead. Slowly is the world.
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