Bet on Growth With First Israel

This column was originally published on RealMoney on Aug. 17 at 10:16 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

There isn't enough Israel to invest in. But if you are like me, you are confident that the evacuation of Gaza will happen and happen peacefully -- despite the media's attempts to portray the departure as chaotic and violent -- and you want to invest in the country.

Israel's been a pretty terrific place to invest for the last couple of years, with the market on fire in 2003 and rallying again, though less strong, in 2004, but it's been totally stalled of late as the world questions whether Ariel Sharon can pull off this huge pullback.

Of course, it isn't just up to Sharon -- you have to believe the Islamic terrorists want to screw this thing up royally.

But if you are like me, and you think that the remaining Israelis will, in the end, leave without hurting anybody, you have to bet that Israel's market is ready to rock again. With low interest rates -- same as ours! -- and inflation dropping -- we can't say that -- Israel's got a great backdrop. And when a percent of any nation has to go buy new homes, you can bet the GDP's about to roar.

Unfortunately, the big Israeli companies that trade here are remarkably insensitive to this growth. You want to buy Teva (TEVA Quote) -- the biggest weighted stock in the Israel index -- if the evacuation goes badly, heaven forbid.

That's why I am thinking the best play is the First Israel(ISL Quote) fund, which owns Teva of course, but also has good stakes in a host of banks, techs and development companies that should do well if my political plan plays out. It is real small, at $65 million, and doesn't trade well. However, it sells at a 12% discount to the index, so if you used a limit order below $15.5 with a net asset value of $17 and change, you will be fine.