The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage. The opinions expressed are those of the author and do not represent the views of TheStreet or its management.
"If Moses had taken a right instead of a left, we'd have the oil and they'd have the sand." -- Old Jewish proverb
NEW YORK (TheStreet ) -- Four words define investing in the Middle East: Israel, oil, and hazardous and opportunity. Israel defines such investing in two ways. First, Israel is a principal in one of the two major conflicts in the region, specifically, the Israeli-Palestinian conflict (the other being the conflict in Iraq). Second, whereas Silicon Valley used to be the international center of innovation, Israel has begun to displace the Valley as that center.
As for oil, while not omnipresent in the Middle East, it is present in sufficient amounts that it's difficult to discuss Middle East investments without considering the impact of oil. Hazardous and opportunity go hat in hand when one considers investment in the developing world.Having organized and run many Israeli investment clubs on the East Coast during the 1990s, I developed a lot of interest not only in companies in Israel but also those elsewhere in the Middle East. This series of articles will explore investing in one of the more volatile parts of the world. Is the potential reward worth the risk? That's something every investor has to assess for themselves. Many might view investments in the developing world from the perspective of the stability of a given country's government. Israel ranks as the region's long-standing stable democratic government, but what about in countries in which a western-style democracy isn't present? There are, after all, a number of such countries in the Middle East. (Egypt, anyone? ) In the past, one might have looked at Middle Eastern countries by their affiliation with the West, either Europe or the United States, with the mantra of avoiding those countries lacking such affiliation. During the past half century, that view has been frequently tested and found to be wanting. How, then, can one assess the "investability" of a given Middle Eastern country. One approach may be found in the work of economist Hernando de Soto Polar. Based on his observations, de Soto suggested that the key to growing an economy, particularly those in the developing world, is in the ability and willingness of the legal system to enforce property rights. Countries with that legal system will see economic growth boom, and those without it will be hobbled economically.
|Related Stories Today's Leading Oil Exporters: Investment Implications|
|Hedging Emerging Market Investments|
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV