The other day I decided to look at the Israeli-based stocks covered by HedgeFolios to see whether there was any info in the charts. I determined that of the 6 stocks that I could identify (ALDN, ALVR, AUDC, CHKP, ELOS, TEVA) there was almost no measurable impact from the war with Hezbollah (even though the stocks declined.) So - I decided to not comment on it since it appeared to be a non-issue. Then I saw Maria and numerous other members of the financial media (tv and print) reporting that Israeli stocks were being whacked because of the conflict. HMMMM!?! I decided to check again and found the same thing as before.

At this point, I have to comment. I like Maria, but it bugs me when financial media exaggerates a hot story to make it even more newsworthy than it already is. If you pull up these stocks, I think you will find that the declines STARTED in January, February and May, not two weeks ago. While I agree that most of these have declined since the attacks began, I think it’s tough to say that the downward moves were solely due to the conflict. I am confident it hasn’t helped, but given that most of these stocks were sliding for several months, I cannot assign the blame to the past two weeks of military action. By the way, my performance with the signals on these 6 stocks sucks. I wish I was DOWN on all of them for the past 6 months, but not the past 6 days.

I hope you are skeptical of market commentary and do your own homework. And that applies to my posts as well. It’s way too easy to say two things happen at the same time and suggest that means that they are a highly correlated cause and effect. Sometimes, it just isn’t true. In this case and despite the media reports to the contrary, I am not seeing a direct relationship that says these stocks are only going down because of the fighting. Something else was the cause months ago. The Israeli markets for these companies is a miniscule component of their global revenues and earnings. Unless you believe that this conflict will materially impact their production or that Iran will get their wish and Israel will disappear, I doubt that it will impact their fundamentals.

All this being said, I expect that these stocks will move higher if there is a ceasefire and realistic plans for a longer-term solution. However, I expect that many stocks (not just the Israeli ones) will get a boost if this happens. At that point, I expect to hear that the stocks are healed, but I will still be searching for the real reason that the Israeli stocks will go UP or DOWN,