Right for the wrong reasons

I bought Tambour shares because of its real estate. Today it went up for a completely unexpected development: Tambour won a big contract in Greece for a water purification system.

TASE today started green but around 1200 AM Deutsche Bank lowered its rating of TASE to "Stay out!". Sentiment changed and the ended deeply in red. Except Teva and a few bright points such as Tambour.

Should I feel satisfied with myself because I bought Tambour cheap and just a few days before its sudden rise?

Sure, why not?

Bank Igud, Solomon Money Management or Suny Internet

During this weekend I worked on what to do on the TASE. I identified three investment opportunities:

(1) Bank Igud or its warrant 1.A small bank that is being swallowed by some unknown probably foreign financial group. The whole sector is being reorganized and nationalized banks have been sold. The last one to go was Bank Leumi bought by Cerberus, a New York hedge fund. There was much interest and the price paid was amazing, but Cerberus said that Israeli banks are the cheapest in their universe. Ergo, Igud is cheap, ergo, its price will go up.

(2) Suny imports Samsung phones and operates a small Hebrew portal called Tapuz (Orange). They are bringing it to TASE in April - May for 20 to 40 million shekel. I dont like importers but there is only other Hebrew portal on TASE, so it price may go up.

(3) Solomon is small but successful financial management firm, that has been bought by Markstone to manage its other adquisition the Pekan mutual fund business of Bank Poalim. Markstone is the name of a group of Israelis that collected about 800 million dollars in the US to invest in Israel. They paid 22 sh per share of Solomon, later the price fell to 14. A year ago, it was 4. "Investment Expert", a forum friend, says that Markstone is not stupid, Solomon is worth 50.

Israel's imbecile energy policy

Israel has 4 big electricity generations plants along the Mediterranean sea. They all burn coal. Coal is cheap and abundant, and it is not owned by Arabs.

But that was too good for my ex colleges at the Ministry of National Infrastructures. Their motto is - "If it works, fix it. "

Israel has no natural gas reserves. It has to buy them from Egypt, a non friendly country. Another source is Gaza, aka Palestinian Authority. Buying natural gas from them means putting money in their pockets so they can buy armaments and rockets to shoot to our cities and terrorize us. Since they have no other clients than Israel, only my uberchochem friends could present this project as good for Israel.

Israel has invested hundreds of million dollars in gas infrastructure. It is reengineering coal plants to natural gas. Yes, they are not so stupid, they know that gas is more expensive than coal, but it burns cleaner! Since we are a very narrow country, from 17 to 30 km width, with strong transversal winds, the air quality in Israel, coal and all, is excellent. Excellent but not enough for the uberchochems!

The world is changing its energy generation from natural gas to coal. What they know those goyim! "The future is not solar or wind or fuel cells. They could give nuclear a run for its money by 2015 -- if government subsidies produce enough of a market to drive costs down further. Nope. The fuel of the future is coal. For the next five years anyway. "

Coal is cheap, and the coal supply is stable.

Exactly how cheap is coal? Really, really cheap when you compare it with other fuels used to generate electricity. In December, according to the investment bank Natexis Bleichroeder, U.S. coal sold for the equivalent (taking into consideration the different energy content of the two fuels) of natural gas priced at $3 to $4 per million BTUs. In December, the spot price of natural gas hit $15.50 per million British thermal units. On Jan. 19, after a monthlong selloff, natural gas sold for $8.59 per million BTUs. Even if the price of natural gas falls further -- to, say, $7 per million BTUs -- coal will still be about half as expensive as natural gas.

Think utilities may have noticed? Last week, GE, Siemens and Alstom, which are three of the world's big makers of turbines for electricity generation, told The Financial Times that they were seeing a shift in their orders to steam turbines for coal-fired utility plants from natural-gas turbines. According to the three, coal-powered units will make up about 40% of all orders for electricity turbines in the next 10 years, with the share for natural-gas-fired turbines falling to 25% to 30% of orders.

But no. We in Israel know better and are basing our future on Hamas-supplied natural gas.

The Szatmár Hassidim are right. Left alone, we would not last a minute. But God loves us.

First step in financial shares

Thursday my portfolio ended higher, which is surprising in a day when the Fatah (the devil we know) lost the Palestinian elections to Hamas (the Muslim Brotherhood). All over the developing world fundamentalism is taking over and it is now in our very doorstep. I owe the growth in value of my holdings to Teva, which is a global corporation untouched by local politics, and Aaura which continues its upward trend (already I made 150% riding on it) and Igud which I bought this morning.

Igud was among the 5 recommendations of Leviatan, the guru of the Walla forum on Globes. I liked Igud because it is a small bank, like those being swallowed in the current privatization and reorganization of Israel's financial sector. Its stock exchange value is near to its book value, which is much less than the real worth of its real estate and banking licence. It has a high p/c rate, which is meaningless because the bank is so badly managed that it was losing money only two years ago. It is owned by an insurance company, and professional management shall turn it profitable in no time, in line with the banking sector of this country.

Leviatan said buy warrants, but I am not a TASE tiger and bought the share. It went up 4.5% till the end of the day, which is remarkable for these day of political bad news. The warranty went up 20% !

The guru said sell at the end of the day, but again, I am unable to sell such a good instrument. I wonder if the guru is a member of the Leviatan family, famous math professors and corp directors. He certainly seems to have a very good mind. Tomorrow I shall buy more Igud.

Fear in TASE

It was a day of nerves and fear in TASE. The portfolio ended 1% lower, due to losses on my "solid" investments: Machteshim Agan, ICL and Teva. My speculative mini-investments in AAURA (a phenomenal 25% up), RPC and real estate firms rose substantially. Internet Zahav rose 7 - 8 %, justifying my judgment.

Most of the money flowing out of my solid sector went to reinforce the banking and the real estate sector. Many believe that building contractors will be the hotties of 2006. Delek Real Estate jumped 4.64%, Azorim announced it had sold a building in London for NIS 260 million, giving it a NIS 31 million capital gain. Gazit Globe announced a purchase, via its First Capital Realty subsidiary, which is traded on the Toronto Stock Exchange at a market cap of $1.4 billion. The company bought three properties in Canada for $33 million. Gazit Globe shares rose 1.25% It could be that the building contractor (real estate developer) sector will be Israel's next global wonder, not Machteshim Agan as I thought.

The Battle of Eldan Technology - 45% up today

One of the small cap shares on TASE I am following with attention is Eldan Tech. It is a very unremarkable company with a few real estate properties that rents out, producing a very decent reurn. The total stock market value of the company is 1.17 of its book capital, which is nothing special for a real estate small organization. I was following it because the book value of real estate is imaginary, and the real value of the company must be much higher. This value has to be realized by the market sometimes in the future, so teaches me my guru Joel Greenblatt.

As I was meditating on the case (sleeping would be more precise!), a struggle for control of the company started to take place. The share leaped 7.5% today amid heavy trading in its bonds and options (45% !!!). Eldan, controlled since 2000 by CEO Yosef Bodenstein, who sold the original technical business and invested in real estate, issued convertible bonds and options for these bonds and for shares 10 months ago, raising NIS 47 million. As time passed, an investor, whose identity is not known, began buying options and bonds on the TASE on a scale that could presage his gaining control of the company, while shunting Bodenstein aside.

Bodenstein also began buying the company’s securities in recent days, and it is believed that he will continue doing so in the next few days in order to fortify his control, thereby forestalling the unnamed investor. These events caused lively demand for the company’s securities, and are increasing its market cap. Incidentally, it is believed in the market that the investor is a broker interested in selling the merchandise he has accumulated on the market to Bodenstein “at a handsome price”, not to mention a handsome profit.

I have no position in Eldan but I could profit by making a rapid a sivoov. Am I speculator enough to succeed? (may be continued).

Venture Capital Cafe: Israel: Waterworks for the World?

Venture Capital Cafe: Israel: Waterworks for the World?

I witnessed the creation of Israeli desalination industry

My former boss Dr Yossi Dreizin, fulfilling his mandate as Head of Water Planning Division in Israel, created one-handedly the Israeli water desalination industry. My office was in front of his office and we used to leave our doors always open. I saw it and witnessed it from the very beginning to the end. The first international public bid was prepared by Dreizin and it was very successful, achieving the low price of 0.52 dollar per cubic meter of purified seawater. Later the price was increased by 5 cents because the highly purified water needs hardness artificially added to be usable. Later, other seawater and brackish water treatment projects were designed and contract documents drawn up, published and bidded, so that these days Israel is signed on several very long term contracts establishing its obligation to purchase some 500 million cubic meters of desalinated water per year.

Que bestialidad, as we used to say at the beach of the river Aguazu, Argentina, circa 1977.

Israel receives some 8,000 MCM per annum - million cubic meter/year (river inflow, rainfall, undergroung aquifer streams) - and it captures about 2 - 2,500 MCM of it. Domestic and industrial use is about 750 MCM (2002) and growing only 3 - 4 % per year. People consumes little water in Israel, about 100 liter per capita per annum, and the demand is growing slowly, because many of our people hail from desert countries like Yemen and Bahrain, and is being submitted to an intensive indoctrination to save water and none the less, because water is very expensive. The rest (2,000 - 750 = 1,250 MCM) is sent to irrigation. Since the price of the irrigation water is expensive (1.5 shekel/cu m) and rationed, farmers are using cheaper treated sewage, to the point that today some 70 - 80% of the water requirements of the agricultural sector is met by municipal wastewater treatment plants.

The chronic problem of Israeli water economy always had been the interannual variation of rainfall, meaning that most of the years the farmers were unable to absorb and buy all the water available, and there were excesses that had to be left to flow unused to the sea. This is the little dirty secret of Israeli water sector, that we dont like to talk about, because it would kill the unceasing propaganda we are emmitting that water is very scarce, and then, well no one will read this anyway, investment in the water sector would be cut and the high salaries of Israeli water engineers would be reduced. Dreizin used to say that we need excess capacity for the dry years, that appear with a frequency of one very 8 - 10 years, and if the people gets the impression that water is abundant then we, at the state institutions, would be unable to build the infrastructure required for a 100% probability supply. He is an impressive egomaniac, no doubt, a very dominant big headed gnome. He is about my age and I always envied him because he was what I would have liked to be and am not, a forceful personality, able to impose his views in a debate, at the top of his specialty and living a well ordered religious life, with many children and grandchildren.

Israel's water administration was dominated for a full generation by Meir Ben Meir, a "simple" farmer from the Emek and a strong character. He was trapped for years in the problem that to the public he had to emphatize the scarcity and vital importance of water, in order to receive development budgets, and on the other hand, he knew and had to act on the knowledge that normally Israel is well supplied and every year excess waters had to be allowed to flow into the Mediterranean.

In the year 1998 - 2000 there were three consecutive years of draught and the level of the Kineret lake fell 4 - 5 meters (the Lake is 900 meter deep). Our holy people chosen by God himself became absolutely convinced that it was going to be exterminated en masse and suffer thirst, they imagined concentration camp scenes of demacrated skeletons fighting for a drop of water, they speculated that bloody survival wars were inevitable with our neighbouring countries for the remaining water resources (University professors wrote learned researches and large books on the coming, unavoidable, regional, worldwide, cosmic conflict, Gog & Magog, Apocalypsis), the public histery was incredible.

The Water Administration where I worked was inundated by inventors who proposed to tow icebergs from the Artic, plastic floating squids from Turkey, commisioning oil tankers (I was the one that killed that idea, saying it could not be done, the oil remants would contaminate the drinking water), capturing water from sea breezes, evaporating water with sunshine, compressing seawater, freezing seawater and so on. Ben Meir, el macho, resisted heroically the public pressure, the media called him Enemy of the People of Israel, doing nothing when water was getting scarcer by the minute and conducing us to a Holocaust, worse than Hitler. He said next year it will rain and no worry, we have enough water reserves for several years. Nothing helped, the already weak nerves of the Israeli public cracked and Ben Meir was shamefully sacked and his contract unrenovated and sent back to his meshek in the malarious swamps of the Emek. A tall, young, blond and bland engineer by the name of Shimon Tal was brought in in his stead.

Ha! That was the opportunity of a lifetime for our deep-voiced gnome genius: where I saw nothing, he recognized and seized with no hesitation the instant, without losing a split second he organized meetings and regaled his audience with the most learned Aramaic quotations from the Talmud, creating from nothing the Israeli seawater desalination industry. The rest is history.

It is so that now, 4 - 5 years later, we enjoy in Israel an enormous overcapacity of seawater desalination and we are paying 250 million US dollar per year (in the Ashdod project only, and there are a dozen more!) to produce water that 90% of the time we dont need and we dont know what to do with it. Since electricity generation in Israel is based on coal and natural gas in the future, the rise in oil prices does not affect us - yet. Should energy prices increase in this country, we shall have a situation of French water company producing rivers of extrapure water and losing tremendous amounts of money, while the Israeli state, always respectful of its international contractual obligations, buys and pays and wonders what to do with it.

By the way, this winter is very cold and rainy. The Ashdod Desalination plant is operating at full capacity, pumping seawater through its spidery white membranes, adding white chalky CO3Ca to the chemically pure H2O and pumping it to the nearby Mekorot monster pumping station. And the crystalline water running into the black sea mixes with rainy tears of Shomer Israel, the People of Israel's Guardian in Heaven.

Tambour Ecologia - An investment opportunity?

Tambour is one of Israel's oldest companies, founded in 1936 by German Jewish immigrants. It controls since prehistory the Israeli house paint business to the point that it is classified a monopoly. Only 15% of its shares are on the market, the rest is controlled by the holding company Carmel Granite. The share sells for about 4.00 shekel (0.87 US$) giving it a value of 252 million shekel (55 million $). The company owns industrial land near Haifa, which cannot be worth less that 100 million $. One lot had been almost sold to a British Mutual Fund for 50 mill. $ but the British withdraw. The share has been losing value in 2005 (starting at 1.5 $ and 0.9 $ now) due to financial expenses and the disappointment of the real estate sale, and of course the fierce competition that reduced earnings to half of the multiyear average, although sales increased in 2005 11% to 125 mill. shekel (aprox 30 mill.$). Net profit in 2005 was 16 mill shekel, = 4.5% of sales. So Tambour is not very profitable just now and the house paint market is unpromising.

All these years, Tambour had been trying to diversify. In Nov.27, 2005 bought Gesher Geves, a gypsum factory with complementary products to hers (but being a monopoly, they are forbidden to link the sale of one product to the other). A few years ago they bouth several small ventures in the environmental field and created Tambour Ecologia, a company trying to maintain and build wastewater treatment plants, which has Ezra Benun my friend as chief designer (batch SBR plants), but I think they are losing money consistently. They have, I think, bought Jonathan Wasserschtrum's business of activated charcoal for odor control (Somat). All in all, they are interesting businesses (in my specialty), but unprofitable.

Tambour is a classic value company, so says the analyst, the worth of its real estate is much greater than its stock market value. Although the management is searching for buyers, such as that unnamed British Mutual Fund, that value may never be realized by stock owners. The regular paint mixing and selling business is not very profitable in itself and has no growth potential.

The question is if in 2006 Tambour shall succeed in selling real estate, and if so, how much of the money will reach stock owners? When the land sale was almost a fact, the share was sold at 600 sh. The analyst predicted a price of 800. When the sale unraveled, the price became 400. So there is an upside of 100% and a downside of 0%.

I have to find a good investment opportunity - is this one?

****

PS.: I bought 20 000 sh (4,300 $).

Israel as the Silicon Valley of Water

Waterfront, a new front organization created by former Ministry of Finance budget director Uri Yogev, aims to duplicate Israel’s success in defense, venture capital, high tech and agriculture; fields in which Israel is considered a know-how and business powerhouse.

As a first step, the Ministry of Industry and Mekorot decided to finance strategic research by business strategy expert Trigger Consulting. The study aims at seeing how the government should support the water industry. Trigger’s study found that the global water industry amounted to approximately $400 billion, double the size of the semiconductor industry, and is growing 8% a year.

How can I become part and benefit from this initiative? Think.

Will Machteshim Agan shares rise after mutating into a global corporation?

Brokers and analysts are unanimous in recommending Machteshim Agan shares. Yesterday, Bank HaPoalim issued an an analysis that the company's shares were 25% undervalued. I have a position in Machteshim, but it appears to slowly losing strenght and height. In the last twelve months, Tel Aviv Stock Exchange rised 40% but Machteshim moved only 5 - 6%.

The Bank's analysis is based on pure imagination. Its arguments are all wrong and nonsense. The company manufactures and sells agrochemicals, mostly in the Brasilian market. The analyst writes that higher oil prices will improve sales, that higher oil prices increases the demand for substitutes such as bio ethanol, that soya yields are growing. I think oil is an input in agriculture, so higher oil prices actually harm the Brasilian agrochemicals market. Ethanol as fuel component is a viable proposition at current oil prices, but will it affect Machteshim's market? Soya yields are important since they consume Machteshim products, but a good year cannot increase the value of the company by a quarter. And high oil price is BAD for agrochemical companies.

********************************************

Brasil and China are developing a trade structure based on export of soya beans and other commodities to China for hi tech and industrial products. Machteshim has a strong position in Brasilian agriculture and on the other hand, is buying generic agrochemicals in China. In view of the growing environmental restrictions Machteshim faces in its factories in Ramat Hovav industrial zone and the Ashdod port industrial zone, and the possibilities of heavy punishment (see please note on Dr Alon Tal), the company is sourcing more and more of its raw chemicals in China. This structure is being formalized these days and I presume in 2 or 3 years Machteshim will be a global corporation with a rather tenuous connection with Israel. What will this movement do to the share?

That is the long time view. What is happening these days is that the management is selling its stock options in the Tel Aviv market. And at the same time, they are running a buy back scheme. Is this a co-incidence? Is this legal? Is it good for an investor?

I would welcome comments.

(Intelligent) Design Criteria

Your Client is chain of cheap furniture warehouses, that is renting a large area in the industrial area of a poor neighborhood. Which percentage of the surface should be assigned to exhibition, to warehouse, service, offices? No textbook I know of can help you here.

What is the first thing to do? You check the municipal taxes for different uses. It appears that you pay by area, square meters, but the rates are different according to use. Warehouse area is dirt cheap, sales area expensive.

So you design your furniture shop as one big warehouse.

Cosas veredes Sancho ...

Rothschild Prize in Environment to Dr. Tal

This year's prize in environment was awarded to a young American immigrant, with a law degree from the Hebrew University of Jerusalem and a Ph.D. in Environment from Harvard. He founded the most important NGO in Israel, "Adam, Teva ve-Din". In ten years alone, he introduced American methods of environmental activism and was the first to achieve material advances in Israel, specifically, the cleaning up the heavily polluted Kishon river.

In GLOBES, Alon Tal (Albert Rosenberg) says that after completing his studies, "began to look for a place where he could contribute his knowledge commitment. He discovered a small non-governmental organization (NGO) called Econet, founded by immigrants from the US who were active on environmental issues. Econet won the Knesset Speaker Prize. I was invited to speak before the Econet executive committee on recycling. One of the participants asked me how much money I needed in order to found and lead an NGO. I answered, ‘$1,000 a month,’ and he donated $12,000 on the spot for the first year. I founded the NGO, hired a small office in Tel Aviv, and slept on the floor of the office two or three nights a week for seven years” he recalls.

A few years ago, I answered an ad asking for a wastewater specialist and found myself sitting in front of Tal in a big oval table (probably he had been sleeping under that very table that night, maybe with that ugly girl at his right). They posed the classic "Please talk about yourself" and I described my experience as manager of a big wastewater treatment plant, and as chief planner in the Ministry of National Infrastructures. I could see how the overweight female was starting to literally change colors, how my words were painting a horrific picture in her mind. Her face became distorted with hate when she spew out: "You are part of the establishment!". I tried to stop and defuse her hysterical reaction: see, I told her, I have small childen to maintain and there few openings, in this country, specialists wishing to work on the big issues tend to gravitate towards the public administration. But already she had closed her mind: I was the enemy.

It is superfluous to add that I was not hired. Anyway, the salary was very low and sooner or later it would have become evident that I am not a "black or white" person and I would have been sacked for sympatizing with the adversary.

****

Another encounter - this time an indirect one - was in the Ketura Kibbutz in the South. Tal had founded an enviromental school in this dessert kibbutz, with academic interchange possibilites with neighbouring Jordanians. The kibbutz itself is an environmentalist settlement, growing organic crops and producing goat cheese. Across the road there is another kibbutz, and both carefully cultivate bad neighbourly relations. They have built a colourful hollow tower of some 25 m height from adobe, aimed at creating natural air conditioning (like the wind towers in the Gulf). The tower is very nice and originally decorated, and it was designed to house artesan workshops, a clearly anticapitalist (somewhat hippy) concept. Like all newcomers, our hippies had assumed that the problem of the dessert was the heat, while the real bottleneck is the cold of the winter. Beduins and dessert goats are black, because they need to absorb heat in winter nights. So they installed artistic gas heaters in the adobe workshops.

But the striking difference with American hippies was that this kibbutz's members actually worked, operated a commercial contracting building business and tried to exploit all available sources of financial aid (the Sochnut, the Keren Kayemet, etc.) available for new settlements in frontier and faraway places. I met them several times and got to admire them, mostly because they were all very slim and athletic, irradiating inner peace (you learn to do that) and working hard and purposefully. I liked their organic goat cheese and envied their skinniness, since it was hard for me to keep up with them in the dessert summer heat.

I participated in the design of the wastewater treatment plant of the kibbutz - a type of wetland - and helped to submit it for financing of the Ministry of Infrastructure I was working for. I championed their project to the point that the Ministry became anxious to get it done as a demostration that they were open, environmentally green, anti-bureaucrats, but apparently the kibbutz got better financing from another source - and the project was not started during my time in the Ministry.

Green Police interrogates my "Client"

I month ago, the Ministry of Environment made a surprise unannounced sampling of the effluents emitted by the Jewelry Electroplating Factory in Bney Brak. The factory is owned 50% by Delek, a local mini-conglomerate put together by Itzhak Tshuva, a former contratist from Netania. All my contacts are with P., a religious Russian immigrant, a friend of Gaydamak, Cherny and other oligarchs. He is a triangular caricature of a Jewish gnome, and a very nice person except for the fact that he is always broke and never pays.

He had informed me of the Ministry's surprise sampling, saying, dont worry, no problem, the factory is not working. Two weeks passed and all quiet. I thought - should I ask for the results and risk awakening our public officials's legendary laziness? Let the wild dogs sleep.

So it was a surprise that P. called me yesterday. He had been taken for interrogation by the Green Police, the enforcement arm of the Israeli Ministry of Environment. Their "jail" is not a cold, humid or obscure dungeon, but a pastel-coloured cubicle on the 13th. floor of a modern office building in the center of Tel Aviv. P. probably expected to face the Soviet KGB, and some of the interrogators did use Russian expressions to get better understood. There are concepts like Khuy, Prostityut, Kibinimat, etc. that sound better in the original Russian, it is not the same thing in Hebrew, the Biblical tongue of Prophets. All in all he seems to have been correctly treated, and he was shown the results (2 mg/lt Nickel when the maximum should have been around 0.6 mg/lt) of the analysis.

That did not change his conviction that he has been singled out because the Ministry of Environment people wants money and that is the sole reason they are persecuting them. I am making a serious effort to change his mind, that this is not Russia but Israel, please do not offer money to a public servant, you will go to jail! But P. and his crew are unconvinced.

I ask myself, what is the origin of the nickel in the effluent? The pipes and the manholes were never cleaned, so it is probable that still have heavy metal deposits that are slowly getting washed away. It may also be possible that some chemical operations are still taking place in the factory, emitting metals. That would not be very intelligent, because the environmental police is keeping a watch on the factory. Anyway, the fact that a plan of a treatment facility has been submitted and is being studied by the same Ministry, has saved his skin this time.

I am supposed to receive the 15% of the final cost of the treatment facility. At the end. Meanwhile, I am saving his skin from day to day, for free. My friends say I am a good person (while thinking "He is a f*c*ing idiot"). This is my life, Folks!

Chlorine Gas for Water Desinfection - Not in Israel

Mekorot, the National Water Company, dismounted its Chlorine liquid gas tanks in Ashdod and installed a system based on Sodium Hypochlorite 10%. The reason is that the Palestinians are bombarding from Northern Gaza and it was deemed dangerous to maintain them. Which is worse, Chlorine Dioxide (before) or Hypochlorite (after)?

Two successful investments: AURA and WALLA

Each of them jumped 10% on the Tel Aviv Stock Exchange today, making me more money than months of treating industrial and municipal wastewaters.

I bought AURA shares yesterday, after dedicating the afternoon to study/research. I had an amount of shares in an electronic factory in Migdal HaEmek, which was not advancing at all. What to do with the money? I read the comments section of Globes and other business portals, and there was a figure calling himself Leviatan (the Balleen) that seemed to know what he was saying. He said that AURA was a startup by Koby Misholy, founder of Comverse, and had just sold Fundtech, and had a wonderful set of projects in implementation somewhere in Europe. That it was to break out in no time. I went to the Bank and Haim, the investment officer, laughed me off - What, they stroke oil? Anyway, having no other ideas, I bought AURA. The next day there was a big optimist article in Globes, and the paper jumped 10%. Thanks, Leviatan.

Walla is a different story. Already I told how I got convinced that the internet was for real (I am a slow learner, apparently) and that publicity was migrating, not, stampeding to the net. Walla already made me 150% in a month.

These days, I am making much more on speculation than in the profession.

Hazardous Gas Plume from the Winery

A few years ago, I lectured in a refreshment course por working professionals, and one of my students, an old Hungarian Jew, invited me to consult to his employer, Israel oldest and biggest winery. The winery has two factories, one situated in Tel Aviv´s suburbs, Rishon Le Zion, and the other one in Zichron Ya´akov, a 300 meter high outcrop bordering the Mediterranean sea.

The relationship developed with small jobs such as giving the annual training to the factories´s personnel, and small - unpaid - consulting events, so when they needed a permit for ampliation, they contracted me. I did the presentations ("parasha technit") for both factories. The Rishon submittal was ipso facto accepted and the permit issued. The Zichron submittal was rejected because the analysis of the hazardous gas plume risk was not done according to the model preferred by one Morris S., the officer of the Northern Section of the Israeli Ministry of Environment.

Now, that is crazy, utterly crazy, because (1) wineries present absolutely no risk of hazardous gases. They dont use hazardous gases nor materials that can emmit hazardous gases, there is no case in the professional literature mentioning this risk. They do use small quantities of ammonia in refrigeration, and a bit of liquid bisulphate as preservative, both being relatively harmless, (2) the factory in the very center of a densely populated downtown was approved, while the plant on a high and windy outcrop with no population around, was rejected as dangerous.

I can write a letter to his boss saying that Morris thinks rejects and important project not because he thinks it is dangerous but because the presentation is not according to his stupid bureaucratic rules. Should I do it?

Postscript: I did it and I am sorry. I wrote a letter to Morris (not his boss) that because of not being paid by the winery, I am not going to satisfy his bureacratic requests. Moreover, the ampliation did not refer to the winery but to the addition of a tourism center based on the historic winery, and the winery will continue operating as it did for the last 70 years. So he is rejecting a tourism project for non-professional reasons, that is, for reasons nothing to do with some actual risk.

My project manager, Barak, was very much upset because of my letter. He said that I should have continued working on the project to the very end even without being paid, since I had to protect my prestige. He wanted me to talk to Morris, to explain to him that we had analysed the risks in much depth and our mathematical model was right and that Morris just failed to understand the submittal.

By the way, I had not been paid the fees agreed, partly because there was a change in the management and partly due to the precarious financial state of the winery. Foreign competition, Australian, Spanish, Argentinian, Chilean wines are killing it. That is why they want to transform themselves into a tourism - recreational business.

I know I should not write letters in the early morning. I wake up angry and aggressive and make irreparable mistakes. Maybe it was not a mistake, I am tired and fed up working for no money. I have to invest some 50% of my efforts in getting paid, I know that this is normal in the Israeli consulting scene, but I hate it.

Too much Boron in the Ink

One of my clients (I wonder if I it is right to call them so, since they maintain me busy now for almost a year but they never pay - it is my fault for sure, I was so anxious to become their guru consultant that agreed to be paid at the end... and that end is never close) manufactures security glass for VIP cars and military applications. They have the small problem that they never submitted a request for environmental permit and of course, their wastewater is possibly contaminated. I have to write the request, plan and build and operate the tratment artifact if required, and get the permit. Then, God willing, I may be paid.

I asked them to commission several samplings of the effluents produced by the different departments and the results were bad. The problem as I discovered was that they had no idea how their sewage system worked, since the factory was built in a long patchwork process and all former activities were forgotten. I discovered that the sewage of the painting department went trough an underground interceptor that has been asphalted over and forgotten. It had not been emptied in the last ... years, maybe never. So they emptied it and washed the entire pipe network of the factory.

Then we did a second sampling and analysing round. Since a 24 hour proportional sampling is expensive, I ordered sampling two times in the working day - 9 AM and 1620 PM. They had some parameters over the permissible limits, but not the same ones, so I presume in average they are OK. They have a problem with boron, the limit is 1.5 mg per liter, and they a bit over it and in a consistent way. They also made an analysis of the ink, and the ink contains 300 mg/lt.

Boron is absolutely harmless and no country except Israel is regulating it. Our problem is that some 70 - 80 % of the wastewater goes to recycling as irrigation water, and much of it for citrics. Lemon is very sensitive to boron, cannot tolerate it in the water nor in the soil. Great patches of lemon plantations are underproducing or dead because of the boron problem, which was unknown a few years ago. The wastewater of this specific factory goes to reuse in nearby fish ponds (fish pisses off the boron with no consequences) and rather boron tolerant crops, but I am afraid the regulatory p0wers will not agree with irrigating with boron-high water.

So we are contacting the ink factory in Holland to ask them to reduce the boron content of their ink. I am sure they never had considered the boron an environmental problem and never considered it significant. Boron - I hope - can be sustituted easily. When Israel forbid the import of boron rich detergents and washing machine soap powders, the manufacturers changed their formula for Israel and it has almost no boron. I hope it can be done also with this ink, and solve this problem.

In Israel we are facing issues unknown in other countries. A few days ago I was worrying about ritual baths, and now boron in industrial glass inks. This place forces one to be original and creative, there are no textbook solutions for our special problems (which are mostly self-created!).

Two bed deionizer

Deionization or demineralization removes up to 95% of dissolved minerals from water by ion exchange resins. Two separate tanks with different resins are used - the cation resin exchanges positive ions for hydrogen ions, and the anion resins exchange hydroxide ions. At the end of the demineralization process water is produced. Two bed deionizers produce water quality in the range of 50 000 to 200 000 ohms (resistivity) which is 8.5 to 2.0 ppm TDA as CaCO3.

As the two bed systems can be run in series or in parallel - and I dont know which is better for the electro plating situation I have in Bney Brak. I am going to design a skid mounted manifold to allow each kind of process and let them decide after teting both. The problem that may arise is that the regulator buraucrats want to see the process in complete detail - before it could be actually operated.

In summary, regulation is interested in a text book solution. I have to design a textbook story to satisfy them, and an actual efficient system to produce the results required.

The (Unborn) Recreational Fishing Project

I was contacted yesterday by an architect proposing participation in a French entrepreneur´s investment idea. He wants to create a recreational country club some 30 km from Tel Aviv, where people would come and pay for fishing in its 6 000 sq meter fish ponds. It is not a bad idea, lot of people likes fishing, and there are no natural rivers or lakes in Israel and the Eastern Mediterranean is a poluuted marine desert, holding almost no fish.

It is a sizeable project, requiring 6 000 sq m ponds, probably with geotextile covering to avoid aquifer contamination, a pumping station with building, an acclimatation pond for the small fry coming in, a management building, and some facilities for the fishermen and their families. The design and drawing is not difficult, but it requires building permits, use of water permits, wastewater connection permit, agricultural activity permits, and so on. I presume that the most difficult permit to get is the hydrology - possibly there are drinking water boreholes and sensitive aquifers in the area. I budgeted 4,000 US$ - half for planning and half for getting all the official permits.

The Frenchman said No and refused to continue talking. No project.

The downside (continued)

Well, I was right in my feeling of a coming downside, and the stock exchange crashed the next day. I have no idea how I got this premonition, but it is a gift I inherited from my father z"l. Not that I can make use of it.

Anyway, I had no money available to exploit the conjucture (I am fully invested) and this morning TASE (Tel Aviv Stock Exchange) corrected itself. The stock exchange crash caused by Ariel Sharon´s unexpected stroke was an hysteric herd reaction and Echud Olmert managed the crisis with sure hands. Nochi Dankner, one of the most astute players of the local scene, bought 80 million shekel IDB shares relatively cheap.

The TASE again is near its all time peak.

Rainfall harvesting

I consulted in China in a rainfall harvesting project and back home, in 2001 (?) I wrote an article in the local Water Engineers Journal. I received many calls from interested persons and also an architect interested in green buildings visited me. Later I consulted to Lior, a local entrepreneur who sold some 25 grey water reuse machines but they were not working. I tried but could not improve his design. Now I have this mikweh project (in fact, I dont have it yet) with a ritual need for rainwater. The field is very interesting, and I could become a guru in this interesting area. A note for myself.

Unproductive day

Sunday, the first working day of the week. It was raining at 6 AM when I took my daughter to the train station (she is going to her Army unit in the Lebanon border) and then, I continued to Ramat Gan. After almost 2 hs of nerve wrecking traffic, I arrived to the nice 50 seat restaurant that is requesting municipal and health ministry permits. We literally ran with the manager Moshe to the Municipality to meet with Boris, the engineer in charge of pre-approving plans. The plan has been approved a few years ago and the new submission was only because a change demanded by the public health people ) something to do with separating the hummus and the salad depts.). Nonetheless, Boris analyzed the drawing for 2 long hours and in the end we wrote down 7 small inconsequent comments. Like the WC wall venta (ventilator) was not shown in the drawing. I took the dwg back to Gera to make the corrections. I will have to come back at least two more times. I thought it was a cake walk.

At midday I came home to eat, and Inna came after me made a nervous wreck. She started attacking me because I was eating and fat, and no money was coming in and that I was a patetic person she could not talk to freely because she didn´t want to hurt me.

She was completely hysterical. I wondered what happened because the whole complicated wiring connections of my new fax machine were out of place and hanging in the air. I reconnected the computer, etc. and then she told me that she tried to send a fax to the bank to open a very old saving account in Petach Tikva. She needs the money for travel expenses to the Congress in Atlanta. She felt she was insulted by the banker that manages our account, and she was out of herself. I sent ther fax and quieted her down.

Then I went to Shfayim to the Ministry of Agriculture and Foreign Affairs, to receive the corrections to my book on water reuse. We sat 2 hours with the woman in charge and we spent the time discussing supposed spelling mistakes. In the end, I discovered that she has been reading and correcting the old version, while a corrected one was in the disk I gave her. She recognized her mistake and I made nothing of it, but a sense of futility and tiredness envolves me. It is also my fault, I did not recognize immediately that we were working on the old version. Am I starting to be senile? Worse of all she is not approving my payment, a miserable payment for ¨rewriting¨ old material. She is leaving for Nigeria and coming back on Jan.28th. I hoped it would be over by now and the money in the bank.

The architect of the mikweh project did not call me so I phoned him. There are some unexpected and undefined complications and he did not send me the file to work on. Meanwhile I should start to study the other project he sent me, he said. He didnt send me anything.

So, a bad day. Now I am going to the gym and to sleep.

The downside

The Likud party decided to retire from the government, leaving Kadima alone. Kadima is Ariel Sharon and his cronies. The situation of Sharon is difficult, as he had a small CVI and tomorrow undergoes some medical procedure, and the police has announced that there are indications that Sharon received 3 million dollar illegal campaign contributions. His son Omri is already indicted and going to spend some time in jail. Suddenly I woke up at 5 AM thinking that the TASE market may collapse, and here am I with no savings nor steady job. Fear.

How to design a Jewish ritual bath - a kosher "mikweh"

That is what I am doing now. The ritual bath is an important part of the Jewish religion and it serves to purify women after menstruation and to make them sexually permitted to their husbands, and to purify persons who had the bad idea of adopting the Jewish religion, and to purify new kitchen utensils, specially those that had been in the hands of non Jews. This specific mikweh is for males, that use to purify themselves before yom kippur and other fasts, and it will be under a new synagogue of the Moroccan community. The building architectual style is fantastic, it has all the elements of a Moroccan 1001 nights palace, a real Moorish dream. All in all, I rather like it. The bath will be 6 meters under the synagogue floor, a real mystic experience for those seeking kabbalistic purification.

According to the Ministry of Religions a mikweh has to be fed by maim hayim - living waters. The water has to flow in and out all the time. That is impossible in Israel, where there are no living springs nor fountains and rivers are treated sewage. This is a dessert, so Jews always used rainwater. But in Israel rains only in winter, so most of the year there is no rainwater at all. The solution is to have an "otzar" - a treasury of rainwater, at least 1 cubic cubits or 40 seah volume, and feed the water from the treasure hole to the bathing pool. A side comment for the ignorant (as I was till yesterday) seah is a vessel, but no one knows how big it used to be in Ancient times. Anyway, the chief rabbi ruled that the pool has to be 0.72 to 1.0 cu m. There is no need of actual water flow from the otzar to the pool, it is enough that they mitnashkim - literally, they kiss. The mystical power gets transmitted anyway.

Now there are laws in Judaism about tuma'a - ritual contamination. Wood and metals are sensitive to contamination, but stone cannot become ritually impure. I proposed to the architect to build the pipes from ceramic materials, that would be not only anticorrosive but anti-ritual-contamination and antique, nice and original all at the same time. He consulted with the rav and it appears that plastic pipe is OK and already there is a so called Tzinor Miriam from black HDPE on sale for this purpose. It has 3" outer diam. and "2 inside.

I did not yet understand how the rainwater will be collected and stored. If it is stored for a year, it should be chlorinated, which is forbidden. This is my first work for the religious market, I have to learn how thay actually think. Is it a make believe thing GOD-FORBID or how does it work? More later.

My Internet Gold investment pays off

Yesterday the TASE rised nicely and my Internet Gold investment jumped 4% making me a 25% paper profit in less than a month. The Ministry of Tourism announced that its publicity in Yahoo attracted hundred of thousands of potential tourists and a third of its publicity budget is going to be spent on the internet. Boy, this thing is taking off. I am searching for another investment opportunity.

Yesterday I met an architect and gave me to work on a mikve (ritual bath). It is a very small job, but interesting. The Yemeni architect I am talking about is an artist, and lives in a house with an olive tree and a waterfall in the hall, all in black hard wook. Impresive.

One good investment in the sack and one maturing on the tree

This internet portal Walla stock announced very good year end results and a 50% annual increase in internet publicity sales. Today some 15 - 20% of total publicity budget of Israel is spent on the internet. I know for ourselves that we are not watching TV anymore, we have 2 computers and internet. The price of the stock doubled overnight! So I made a limited research work wo see what other internet shares are on sale in Israel and what is happening with them. I found Bezeqnet, which is part of a big company, and Nana and two or three more that I could not identify on the TASE.

I found Internet Zahav, Gold Internet, which also engages in telephony and supplying internet connection. It is not an internet share netto, but somehow I felt that if the internet is becoming a serious communication media, then its price should reflect this situation. I checked what happens with internet shares in the Nasdaq and boy! there internet is considered a more solid investment than say real estate. So I bought some walla and internet zahav. Walla is very volatile, but internet zahav grew 25% in 2 weeks. The problem is that it is a very illiquid stock, daily movement is about 10 000 dollars. I made about 500 - 1000 dollars onpaper.

Machteshim is the world biggest generic agrochemicals company, based in Beer Sheba. It is a company I know well as it has insolvable ecological problems. They are building now a Kubota reverse osmosis effluent purification plant. My friend Wladimir is in charge of that project. The company had good results in 2005 and announced a buy back program for 160 million dollar. The total value of outstanding stock is about 1 000 million, so I reasoned that this demand will drive stock prices up. It is not happening. I hope it will mature and rise. Some person in a stock exchange forum explained: people buy onthe rumour and sells on the announcement. So the repurchase program may have been factored into the price when I bought. God forbid!

I bought a book by Joel Greenblatt. He made his money on special situations. According to the book, I seem to be on the right track but have to work more on research.

Ttomorrow I have meeting on building a ... mikveh ! Interesting.