Peter Kohli: Will algae be a great investment?

[USA, Israel] Question, what do the Toyota Mirai and Tel Aviv University have in common? On the face of it not much, but digging a little deeper, a lot. The Toyota Mirai is a sports car that is all electric/fuel cell-driven and recently covered a distance of over 1,400 miles in a test run, which is apparently a record.

Researchers at Tel Aviv University have recently discovered that “high-tech super algae” can continuously produce hydrogen throughout the day, which is counter to conventional wisdom. Dr. Iftach Yacoby and his team at Tel Aviv University genetically altered single celled algae, which according to the Jerusalem Post, has the result of “allowing the organism to increase its efficiently to 5 times it natural ability.”

What that essentially means is that if these researchers can adapt this for commercial use, then maybe we have reached a eureka moment in the auto industry.

A few weeks ago I wrote my first article on Israel and why they are called the “startup nation” due to their high tech innovation. So when I came across the article on super algae I thought it would be a good subject for investors. There is no doubt in my mind, even though I drive a gas guzzling car and I am proud of it, that the future of the car industry is away from gas and towards what is called “green energy.”

That’s what this research will no doubt lead to, so whether Dr. Yacoby and his team leave academia and start a high tech business selling the product, generated by genetically altering single cell algae or sell the rights to another company, there is money to be made in the very near future by investors. However, in the meantime there is an ETF that I would like to bring to the attention of investors that may be a good entry point to the Israeli tech industry.

The BlueStar TA-BIGTECH Israel Technology ETF (ITEQ)

ITEQ, which began operations in November 2015 and has a YTD return of just over 5%. However, the high tech industry in Israel is still in its infancy and the explosive growth is only just below the horizon. So when that explosive growth happens, in my opinion, investors will want to be involved and now may be the best time to begin accumulating shares in the ETF I mentioned.

For many years global high tech companies from Google to Intel have relied on research carried out in Israel, but now that the country itself is producing indigenous companies like Waze and several others, I believe that Silicon Valley will soon have a strong competitor for talent. So my advice to investors is to do your due diligence and if you would like exposure to that sector, then jump in with both feet. I don’t believe you will regret the decision.


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