When Israelis think of business people from the U.S., they often conjure up images of fast talking ambitious go-getters from New York or Los Angeles.

In fact, it is hard to find Israelis with any exposure whatsoever to a successful, soft-spoken, American Midwest businessman, let alone an entrepreneur who has turned over billions of dollars.

Ofer Petersberg, economics correspondent for the most widely read Israeli newspaper, Yediot Aharonot, was one of the first Israeli reporters to meet Warren Buffett. Petersberg was flown to Omaha last May, shortly after the deal was made for Buffett to buy the controlling 80 percent interest in the Israeli Iscar Metalworking conglomerate. Iscar, which produces equipment for the car and aerospace ndustries, was founded by Israeli Stef Wertheimer in 1952.

Iscar, based in the Tefen Industrial Park which is just a few miles from the border with Lebanon, exports technological products to no less than 60 nations, not all of whom are on the best of terms with Israel. However, business is business.

Petersberg remarked that when the other four Israeli reporters knew that they were flying to the U.S. on a private plane to witness a major business deal, the details of which were kept secret from them, they imagined that they would be landing in Rockefeller Center or on Wall Street. “So imagine the surprise that we had in store for us when we looked out the windows of the plane and saw the cornfields of Nebraska.”

What Petersberg did see was an investment of billions of dollars, yet something which he described as “simple, clear and business-like.” Buffett was a businessman who had never stepped foot in Israel, yet gave the Israeli economy an unexpected vote of confidence. The shrewd investor calculated the profitability and the potential of a leading Israeli enterprise, which led him to invest $4 billion to acquire 80 percent of the shares of the company.

Petersberg and the other Israeli reporters wanted to understand why Warren Buffett chose to invest in Israel. They were impressed that Buffett gave them time and paid attention to them, even more so than he did to the U.S. reporters.

During his short visit in Israel, Buffett spent a few hours with the media, reviewing his principles with the Israeli reporters: That the firm he was buying would be profitable, that there was to be no government interference and that the firm would have staying power.

All that fit the reputation of Buffett’s future business partner – Stef Wertheimer, whose industrial park complex has been the shining light of business success in Israel. Wertheimer has consistently defied the modus operandi of business in Israel, in that almost every business in Israel is somehow tied to the umbilical cord of the Israeli government, or dependent on some kind of Israeli government contract, subsidy or market assistance.

Instead, Wertheimer’s mantra has always been that he wants the government to leave him alone while he is making his international business arrangements.

What Buffett was surprised to learn upon his arrival was that “The Buffett Method” has been made into a household term by a young Israeli investment analyst, Udi Aloni. The analyst has compiled and translated into Hebrew everything that he could find of Warren Buffett’s lectures and writings.

For almost ten years, Aloni, now 34, has been giving lectures based on “The Buffett Method” for aspiring business students in Israel’s leading academic institutions.

Aloni has distilled “The Buffett Method” into 35 principles, almost all of which have to do with the fundamental human psychology of how to develop modest, capable instincts as a way to assure success in business.

Some of the principles of “The Buffett Method” that Aloni has compiled seem basic and logical:

* Invest only in something that you understand.

*Hire administrators who are credible, bright and energetic.

*Only work with people with whom you like to work.

*Circle the investments that you understand.

*Hold onto companies that produce cash assets.

*A company’s success does not depend on one person’s intelligence.

During his talks, Buffett gave clear reasons for his investment in Iscar and in Israel, commenting on the brain potential that exists throughout Israel. Buffett described Israel as “a nation with such a reserve of brains that it alone presents a logical reason for anyone to invest.”

Buffett told the media that accompanied him in Tefen that “One of the inherent solutions of the conflict is to encourage Israeli Arabs and Israeli Jews to work together productively, so that they would see how much they would have to lose if [the business goes] under.” Stef Wertheimer added that his vision was to “create the infrastructure of peace by creating jobs.” In the literature given out at Tefen, Wertheimer outlined his vision of a “Marshall Plan for the Middle East” that would stimulate industrial productivity in the aftermath of the Middle East Conflict.

Buffett was asked how he would convey to the media the reality of the Galilee after this past summer’s conflict, when Tefen was also under bombardment. Buffett responded that he had a “clear message for the media – to see and report first, hand a story that no one knows, of the development of the Galilee, of Arabs and Jews working side by side in a billion dollar industry,” and in Buffett’s words, “a message for Jews” – to see this aspect of Israel, which Buffett called the “unknown story” – even to the Jews of America.

Ofer Petersberg asked Buffett if he had reconsidered his investment during the war in the Galilee this summer. “I did not think for one minute of withdrawing or reconsidering or delaying my investment … I knew that I was investing in a country where not all the folks around here like you, and that conflict is part of the reality of Israel.” Buffett then exclaimed: “We will be here forever, and Israel will be here forever.”

In all of his appearances during his short visit to Israel, Buffett indicated that this would not be his last investment in Israel and that he waited for people from Israel to contact him. Buffett indicated that he would like to continue to invest in Israel, based on the country’s phenomenal economic growth

After all, the Israeli economy has grown at a pace far more rapid than virtually anywhere else. Israel’s Gross National Product in 1990 was 25 billion dollars. The GNP in the year 2000 was $102 billion. The GNP in the year 2005 was $150 – a 600 percent GNP increase in 15 years.

Buffett described some of the purchases that he has made in the recent past – 9% of the Gillette Company, 8% of Coca Cola – to indicate to Israeli business people the kind of blue chip investments that he is pursuing.

When a reporter asked Buffett about the “boycott of Israel” in some international industrial circles, Buffett’s remark was “that would be like biting off your nose to spite your face.”

Two Jewish business people from Omaha were present during Buffett’s reception in Jerusalem, Ron and Irv Blumkin. The Blumkins’ grandmother, Rose, sold 80 percent of her furniture supply outfit to Buffett back in 1983, the same percentage share that Buffett offered Wertheimer. A gentleman in the hall who hailed from Omaha came over to reminisce with the Blumkins about their furniture supply store. The man didn’t have a name tag, so it seemed quite a coincidence that an Omaha native happened to be at the King David Hotel that night. It turns out that the man was Richard Jones, the relatively new U.S. ambassador to Israel, a proud native of Omaha.

While Irv Blumkin had been in Israel once before, this was Ron’s first visit. Ron accompanied Buffett in the helicopter that traversed the country, and he remarked that seeing the proximity of Israel’s neighbors caused him to recognize the “miracle of Israel’s survival.” Until he saw the short distance with his own eyes, it had not sunken in for Blumkin that Israel’s hostile neighbors are so close. Ron Blumkin commented that Nebraska is surrounded on all sides by Iowa, South Dakota, Colorado and Kansas, none of which is committed to the destruction of Nebraska and all its inhabitants. Each of Israel’s neighbors, Lebanon, Syria, Jordan, Saudi Arabia and Egypt, has been at war with Israel at one time or another since the rebirth of the Jewish state in 1948.

At one point in Buffett’s presentation, he compared his own sense of human relations in the market place with the struggles of Jewish existence. Indeed, in his final remarks in Jerusalem, one of the few times that Buffett displayed any emotion whatsoever, Buffett said that he had learned much from the experience of a Jewish woman in Omaha who had survived the Nazi horrors. She had explained to Buffett that “making true friendships is the way that you will find out who will hide you when they come to get you.” Buffett remarked that this is one reason why Israel needs true friends.

©The Bulletin 2006

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David Bedein is an MSW community organizer and an investigative journalist.   In 1987, Bedein established the Israel Resource News Agency at Beit Agron to accompany foreign journalists in their coverage of Israel, to balance the media lobbies established by the PLO and their allies.   Mr. Bedein has reported for news outlets such as CNN Radio, Makor Rishon, Philadelphia Inquirer, Los Angeles Times, BBC and The Jerusalem Post, For four years, Mr. Bedein acted as the Middle East correspondent for The Philadelphia Bulletin, writing 1,062 articles until the newspaper ceased operation in 2010. Bedein has covered breaking Middle East negotiations in Oslo, Ottawa, Shepherdstown, The Wye Plantation, Annapolis, Geneva, Nicosia, Washington, D.C., London, Bonn, and Vienna. Bedein has overseen investigative studies of the Palestinian Authority, the Expulsion Process from Gush Katif and Samaria, The Peres Center for Peace, Peace Now, The International Center for Economic Cooperation of Yossi Beilin, the ISM, Adalah, and the New Israel Fund.   Since 2005, Bedein has also served as Director of the Center for Near East Policy Research.   A focus of the center's investigations is The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). In that context, Bedein authored Roadblock to Peace: How the UN Perpetuates the Arab-Israeli Conflict - UNRWA Policies Reconsidered, which caps Bedein's 28 years of investigations of UNRWA. The Center for Near East Policy Research has been instrumental in reaching elected officials, decision makers and journalists, commissioning studies, reports, news stories and films. In 2009, the center began decided to produce short movies, in addition to monographs, to film every aspect of UNRWA education in a clear and cogent fashion.   The center has so far produced seven short documentary pieces n UNRWA which have received international acclaim and recognition, showing how which UNRWA promotes anti-Semitism and incitement to violence in their education'   In sum, Bedein has pioneered The UNRWA Reform Initiative, a strategy which calls for donor nations to insist on reasonable reforms of UNRWA. Bedein and his team of experts provide timely briefings to members to legislative bodies world wide, bringing the results of his investigations to donor nations, while demanding reforms based on transparency, refugee resettlement and the demand that terrorists be removed from the UNRWA schools and UNRWA payroll.   Bedein's work can be found at: www.IsraelBehindTheNews.com and www.cfnepr.com. A new site,unrwa-monitor.com, will be launched very soon.

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