Whitney Tilson took a trip to Israel recently with Guy Spier. I have spent many years living in Israel and am quite familiar with the country. I wrote an article about Israel as a country that from a macro picture has a very favorable outlook for investors (I did not get into valuations). Click here to see an article on the Israel that I wrote several months ago. There is also a great book called Start-up Nation: The Story of Israel’s Economic Miracle; that explains how Israel became the Singapore of the middle east.
Below is Whitney Tilson’s interesting commentary from his trip:
1) I got back from Israel at 4am yesterday morning. The trip (sponsored by a wonderful charity, Beit Issie Shapiro (www.beitissie.org.il/Eng), which is doing pioneering work with people with developmental disabilities) focused on Israeli innovation. It’s astonishing how a mini-Silicon Valley has emerged there. As my cousin correctly put it: “Israel is the only other country that does start-ups right.”
My friend Guy Spier (Aquamarine Fund) joined me on the trip, and every day we felt like we were seeing the future.
On the first day (Sunday), we visited Iscar – pic #1 below is Guy and me in front of one of the Iscar buildings (unfortunately, no photos were allowed inside). It’s located near the Lebanese border in the far north of the country (which is only two hours from Jerusalem and Tel Aviv – the entire country is the size of New Jersey) and what we saw was remarkable: the future of manufacturing. Rather than a typical production line, the metal cutting parts Iscar makes were produced entirely by computer-controlled machines in big 10-foot cubes, with a computer screen and keyboard outside where a worker could program the machine to make a particular tool. Everything is automated and computer controlled, and parts are moved about by robotic carts, so only a relatively small number of highly skilled people are required.
That evening we met Iscar’s Chairman,
(see pic #2), the son of Iscar’s founder, Stef Wertheimer. He’s an incredibly nice, philanthropic person, and clearly a brilliant businessman.
Suffice it to say that, as Berkshire Hathaway shareholders, we’re even more pleased about Berkshire’s acquisition of 80% of Iscar.
Pics 3-5 are at the museum that houses part of Eitan Wertheimer’s antique car collection that’s part of the industrial park Stef Wertheimer conceived of and built next to the Iscar campus (there are now five such parks around the periphery of Israel). The guard let Guy and me climb into the monster truck – pic 5.
On Monday we saw what may prove to be the future of automobiles when we visited Better Place (pics 6-7), an electric car company that’s raised $700 million and will roll out a comprehensive electric car system/network in Israel and Denmark in the next two years (see this detailed 2008 article:www.wired.com/cars/futuretransport/magazine/16-09/ff_agassi?currentPage=all and this more recent article: www.smithsonianmag.com/specialsections/40th-anniversary/Charging-Ahead-With-a-New-Electric-Car.html). Here’s a video I took of the battery swap system they’ve developed (www.youtube.com/watch?v=eOMYGXVamZY), so if you have to make a long drive (the current range is 100 miles), you just pull into a station and in less time than it takes to fill your car with gas, you’re on your way… It was a truly remarkable company, and could be a HUGE game-changer…
On Tuesday we visited the Hatzor Air Force Base – very cool hanging with the pilots and walking around an F-16 (again, no pics – drat!) – and then we saw the future of how humans might interact with computers and other electronic devices when we met with PrimeSense, which developed and licensed to Microsoft the technology behind the new Kinect system (www.xbox.com/en-US/kinect).
On Wednesday, we saw the future of warfare when we visited Israel Aerospace Industries, which is developing the latest unmanned aerial and land vehicles. We also visited the Weizmann Institute of Science, which is Israel’s MIT/Cal Tech (that’s Guy and me with of Emerging Value Capital Management in pic 8).
On Thursday, there was a panel of the leading venture capitalists in Israel, followed by presentations by innovative companies in the areas of medical devices, wound therapy, homeland security, clean tech, and robotics. The coolest things we saw was a guy who’d been in a wheelchair for 23 years walk using a robotic system attached to his legs (pic 9).
Overall, an amazing 5-day trip!