April 11, 2002
Gold’s Hot Tip:Invest in Israel
For people who like to make money -- and who take the long-range view -- now is the time to invest in the Israeli economy, despite the current situtation, according to Stanley Gold, president and CEO of Shamrock Holdings, the investment arm of the Roy Disney family.
For some time, Shamrock has been the largest private investor in Israel. With a new capital-growth fund of $170 million fully subscribed, of which $65 million is earmarked for Israel, Gold is looking for new opportunities.
"The combined effects of the intifada and the world recession have stopped the kind of Israeli economic growth we saw in the mid-1990s, and a lot of investors got scared and ran away," Gold says. "We look on this as an opportunity to buy at bargain prices and reap the rewards later."
Putting his money where his mouth is, Gold has invested $700 million to $800 million in Israel on behalf of Shamrock over the past 15 years.
Gold's confidence in the basic soundness of Israel's society and industry is based on three factors, which, he says, underlie all economic growth:
- The intelligence and educational level of the population.
- An incorruptible judicial system.
- A modern, cutting-edge technology that yields world-class products.
Because Israel rates high in all three categories, its economy will come back stronger than ever, predicts Gold.
One of Shamrock's first major investments was to buy a controlling interest in Koor Industries in the early 1990s, which was sold two and a half years later in 1997, resulting in a total profit of $130 million.
Currently, Shamrock has a 46 percent interest in Tadiran Communications, which makes military communication systems, with Gold as the company's chairman. Shamrock holds 50 percent of Pelephone Communications Inc., Israel's second-largest cellular phone service, and 10 percent of Paradigm Geophysical, a geoscience software firm.
The company's extensive real estate holdings include a substantial interest in the new Tel Aviv bus station, which is being remodeled as a retail shopping center and transportation hub.
One project Shamrock is not into, despite recent reports in the Israeli press, is the development of a $135 million Israeli Disneyland. "That story was made up," Gold says.
Worldwide, Shamrock has invested some $2 billion since its founding in 1978, and its Israeli investment decisions, like all others, are based purely on economic considerations.
"I don't have a job unless I make money for the Disney family and our private investors," Gold says. "My Zionist impulses have nothing to do with it."
Participation in a Shamrock investment fund is not for the average Joe Blowstein, with the minimum stake running between $5 million to $10 million.
Gold, the profit-oriented capitalist, is also a self-described socialist, and when a visitor questions the apparent contradiction, he quotes Ralph Waldo Emerson that "A foolish consistency is the hobgoblin of little minds."
He attributes his "philosophical socialism" to his parents, both good union members, and to growing up, 59 years ago, in South Central Los Angeles, when the population was one-third black, one-third Asian and one-third white.
"That [environment] was the best thing that ever happened to me," reminisces Gold, chewing on an unlit cigar while sitting in his sunny office in Burbank, a stone's throw from the Warner Bros. studio lot. "I sold the old Los Angeles Mirror for 7 cents at the Coliseum, I got 3 cents per customer and a 1 cent tip."
He holds as his credo that society must provide a safety net for the less fortunate, and, even more importantly, a ladder to enable poor minorities to climb up into the middle class.
"If that doesn't happen, if the gap between rich and poor keeps widening, then, ultimately, our society will be torn apart," he says.
Gold does not like to talk about his own community and charitable activities, but his support of the Hebrew Union College-Jewish Institute of Religion (HUC-JIR) is well-known.
He created a considerable stir in 1997, when as outgoing chairman of the HUC-JIR board he addressed the graduating class on the Jerusalem campus. In an impassioned speech, Gold warned of the danger facing Israeli democracy by the Orthodox insistence on dictating religious practice and he has since sought to "counterbalance this kind of poisonous attitude."
He is also recognized for his strong support of The Jewish Federation of Greater Los Angeles' Tel Aviv-Los Angeles Partnership program, especially the three-month exchange program among Israeli and American high school students.
"This program gives Israeli youngsters a chance to witness the religious pluralism practiced here," he says. "They get the perspective that you don't need to be a Chasid to be Jewish."
Given Israel's current problems, Gold was asked what Los Angeles and American Jews can do to help the state.
"After 54 years, Israel has less need for charity and more for working partnerships on the economic, social, religious and cultural levels," he responds.
"If American Jews can find ways to participate on any of these levels, they will do significant good for the Jewish people."