November 4^th 1995

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On November 4^th 1995, when I was just eleven years old and in the 5^th grade, Prime Minister Itzhak Rabin was assassinated at the end of a peace rally in Tel Aviv by an Israeli citizen.

That murder shook Israel to the core, exposing the deep factions within its society and the very complex nature of the various tribes that comprise the country’s many ethnic and religious groups.

The assassin was an Israeli student, not a foreign enemy, but one of their own.

The following day, a Sunday, I was in school and the teacher came into the room and asked to speak to us about what had happened.

She began crying; I still remember it to this day.

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Courtesy: wikipedia.org

On the far left is Jordan’s King Hussein, on the far right is Itzhak Rabin, Prime Minister of Israel and in the middle is Bill Clinton, President of the USA. They’re signing a peace treaty between the two countries, in an era that looked to be the golden period of bringing people together: The Berlin Wall had fallen, the Soviet Bloc collapsed and the global village entered hyper-globalization.

I was just a kid, thinking in very linear terms: Peace = life, and war = death. Little did I know that an entire faction within Israel’s population was not only resentful of the peace agreements, since they required too great a sacrifice in terms of concession, but also marked Itzhak Rabin a traitor.

A 4-minute walk from where I currently reside, an Israeli came from behind and shot him. There were concrete intelligence reports and credible threats on his life for months, including failed attempts, yet Itzhak (Hebrew for Isaac) refused to wear a bulletproof vest to a peace rally and that ideological – rather than pragmatic – decision cost him his life.

Courtesy: Zerohedge.com, Bloomberg

There’s a lot more to this story and I plan to speak about its many lessons on Sunday. It was a pivotal moment for the Middle East, but I want to focus on what a pivotal moment even means, because we’re in one now.

What this chart shows is that the rational thinker ought to realize that, on aggregate, equities are priced in a way that we last saw in the Mid to Late 1990s.

A 6-month bond now yields more than the pace at which businesses grow earnings (inverted P/E ratio), which means that stocks are expensive.

From a logical point of view, it’s a threat and one should put on a bulletproof vest, instead of playing it by ear.

It’s not a life-and-death situation, but why not treat it this way and fortify one’s portfolio with the ultimate businesses only?

That is the reason I have concentrated my portfolio, which you can see HERE, from a more diversified one to a highly refined one, which only includes these: (Part 1 of 8)

• Roper Technologies (ROP) – think of it like a mini-version of Berkshire Hathaway. It’s a holding company that specializes in acquiring niche leaders.

I personally purchase shares when the company trades below $450, so I actually like it here and have been adding, as of late.

• Gartner (IT) – a straightforward business, it is regarded as the dominant research and consulting company for IT.

I like it at around $300/share.

This is a world-class business and a household name, where it needs to be.

These are two of the 16 or 17 companies I’m about to feature in the coming days.

Collectively, they comprise around 50% of my portfolio and I intend to raise that to about 70%, when all said and done. 

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Best Regards,

Lior Gantz
President, WealthResearchGroup.com