American Institutional Investors May go "Long" Israel, and "Short" Potential OFAC Event Risk from Anti-Israeli Entities
October 12, 2023
DuLac Capital Advisory recently attended a combat Antisemitism teach-in forum at my local JCC. Our firm wanted to learn more about its root causes and identify solutions that can be done morally, legally, and financially to stop it—especially in light of the worst mass murder of Jewish people since the days of FDR. A Rabbi on the panel likened the terrorist organization that did the heinous killings of civilians on October 7, 2023, to the Einsatzgruppen death squad of the Nazi SS. I agree wholeheartedly, and for those that aren’t as familiar with the various WWII “Jew-hating” factions of Nazi SS, the Einsatzgruppen was basically a European version of the KKK, but focused on exterminating all Jewish people and their allies: according to court admissions, they were instructed by Himmler to specifically murder Jewish civilians in Europe and any non-Jewish person that supported them.
DuLac Capital Advisory L.L.C. also believes global finance and public policy is at a tipping point: Wall Street and its stakeholders at the corporate, municipal, pension, and country level must do all it can to divest from Hamas and any company/country/charity that invests in it—whether explicitly or implicitly. For the uninitiated “long” in capital markets basically means to buy or be bullish on an asset; to “short” means to sell or be "bearish” on an asset, as it is truly a liability: Hamas and its implicit backers— countries and companies that said Israel was to blame for the Hamas terrorist attack on 7 October 2023— are the epitome of a liability: not only for Israel, but also for America.
This insight piece underscores the urgency of divesting from Hamas, an organization that propagates hate and violence, with a focus on the importance of financial divestment and its implications for promoting peace, liberty, and stability in the Middle East: DuLac Capital Advisory L.L.C. that believes Hamas, and its financiers, should be treated just as the Bush Administration treated any organization, company, or country involved with financing Al Qaeda—similar to how FDR eventually treated any organization that financed the Nazi party and government. Hamas is no different than the KKK, and should be completely defunded and de-legitimized. There are a couple impactful steps Americans can take to support Israel’s fight for existence and prosperity with not only their prayers, and pen, but also their portfolios. Americans must divest from Hamas— a Modern Day “Nazi SS group”— and its implicit financial backers
Top 5 Takeaways:
1. Hamas's Delusional Ideology is akin to the Nazi SS and KKK: Hamas's 1988 charter reflects a disturbing ideology that not only rejects a Jewish majority in Israel but also asserts radical Islamic supremacy in the Palestinian Territories, undermining the rights of other faiths, including Christians.
2. The Impact of Divestment: Divesting from Hamas and its allies is not only a moral imperative but also a strategic financial move for regular Americans and Europeans to show their support for Israeli terror victims, and its right to exist as a peaceful, multicultural nation-state.
3. The Need for Swift Action: The urgency of divestment cannot be overstated, as Hamas continues to carry out acts of violence and terror. America must act swiftly to prevent further loss of innocent lives and promote a more peaceful coexistence—the terrorist attacks on 10-7 parallels 9-11.
4. Sympathize with Israelis, not Hamas: Drawing parallels between Hamas, the KKK, and Nazi SS groups serves as a stark reminder of the importance of standing against hate, terrorism, and oppression, regardless of an American’s religious or racial background.
5. The Power of the Pen, Portfolio, and Patriot Missiles: By examining investments and divesting from companies indirectly supporting Hamas, individuals can play a crucial role in the fight against terrorism and the promotion of lasting peace in the region.
Palestinian faction leader Mufti meets with Hitler in the 1940s to discuss ways to implement state based policies to persecute Jewish people. Sadly, Hamas supports such strategies to this day, and somehow receives funding from international investors.
Seeing the tragedy of the massacre and mass-scale lynchings of 1200 Israelis and visitors to that great nation, I expected a global outcry of support in the streets for its nation. Instead, at many "elite institutions” and big cities around the world, people marched in solidarity with Hamas — a delusional theocracy whose 1988 charter stayed Hitlerite conspiracy theories that organizations such as the "Rotary Club" and "Lions Club" were part of a secret international cabal to rule the world.
When most people think of the Lions Club or Rotary Club, they think of non-profits where dockers pants wearing folks meet to discuss funding after school program for kids from rural or inner-city backgrounds, and plan pancake fundraisers. However, to Hamas, just like Hitler’s bizarre but very real Reichstag 1939 speech (when that evildoer warned the world he intended to “annihilate the Jews”), those civic organizations are all part of a sinister plot to “demolish values” and “destroy societies” with modern concepts such as toleration and freedom of thought.
History over the last 100 years basically boils down to: do you support the Lions Club or do you support Nazis?
No one in polite society will say the latter, however, many esteemed pillars of American and European community, let alone hard working pensioners, may be inadvertently supporting the Nazi-inspired Hamas with their investment portfolios. The delusional propaganda, and the surprising outpouring of explicit support (let alone implicit backing) for it by Western dupes, reminds me of Dr. Ralph Bunche's 1950 speech upon accepting the Nobel Peace Prize for brokering the Arab-Israeli Armistice:
"Truth and morality are subverted by propaganda, on the cynical assumption that truth is whatever propaganda can induce people to believe."
It is clear to anyone who reads X, TruthSocial, Fox News, or The New York Times that Hamas is the global epitome of Dr. Bunche's prophetic warning. In its charter in 1988, not only did Hamas reject the right for a Jewish majority to exist in the state of Israel — but it also asserted Islamic supremacy in the Palestinian Territories, thereby denying the fact that Gaza has one of the oldest continuously run Christian Churches in the world — going back to only a century after Constantine. Hamas is not only a terrorizer of multicultural Israel and the Jewish faith, but it also has been an oppressor of the Palestinian people of all faiths since President Reagan era— and has developed ties to actual Nazi remnants.
I have 17 years of experience in studying foreign policy, international business, capital markets, and time in the military. From an investment point of view, Hamas modus operandi is basically selling “shares” in a Ponzi scheme that can be known as “Terrorist Paradise Inc.”— rather than hard work and proper investment in human capital and peace with Jewish Israel (like U.A.E. has largely done), they instead have promoted their destructive company on the lives of the regular, hard-working Palestinians that simply have wanted a place to call home, work opportunities, and to express their faith as they see fit. Hamas tells its “investors” that if they sacrifice their bodies in their Nazi SS-like rabid pursuit to murder Jewish people (regardless of age as it is now widely known), they will then be “awarded” stock in “Paradise.” America must work with Israel to bankrupt Terrorist Paradise Inc.
Israel has emerged as a state that enables people of Judaism, Christianity, Islam, and Druze, and even atheists to live in harmony with one another. The Church of the Holy Sepulcher is co-managed by three main branches of Christianity, as a matter of fact. If Hamas had its way in Jerusalem, it would not only eliminate basic human rights and due process, but Hamas would also oppress people merely for their religious beliefs — whether they be Arab, Jewish, Catholic, or Greek Orthodox. In their 1988 Charter, Hamas states in Article 31: “Safety and security can only prevail under the shadow of Islam… The members of other religions must desist from struggling against Islam over sovereignty in this region.” Where would a reasonable person think Al Qaeda/ISIS got its ideas from?
In comparison, since 1988, Israel has focused on building a thriving tech sector, excellent universities, booming property market, saving Ethiopian Jews from persecution and poverty, and building Arab allies such as Jordan, Egypt, and more recently, U.A.E. Meanwhile, Hamas has focused on Medieval grievances and preventing its people from learning about science and engineering, and instead brainwashing them to “learn” about making backpack bombs and covert shanks to intentionally murder civilians.
Hamas’ ultimate “dream” is to perpetually redo a horror loop of Kristallnacht in the very safe-harbor nation-state established to protect survivors of Hitler and Himmler’s Holocaust. American institutional investors (and individuals) must rally worldwide to use their investment portfolios as a vehicle to support truth and morality, and divest in any entity that promulgates false-equivalencies and denies Israel’s right to exist as a Jewish Homeland.
Israel supports Palestinian Christian worship-- Hamas does not.
Geopolitics and Fiduciary Duty: The Case for Abraham Accords 2.0 and Anti-Terror Portfolio Screening
That said, Americans should not conflate Hamas, a prototype version of ISIS, with the aspirations of all Palestinians in the region, let alone Arabs overall. Remember, it was President Trump who launched the Abraham Accords to unite the "long-lost cousins” of the various Abrahamic faiths. The Wall Street Journal warned in January 2023 of the perils of the current administration’s ignoring Israel; and again in an July 2023 Editorial: “What Does Biden have Against Israel?” The editorials imply that if President Biden had picked up the baton with greater haste in building relations based on the Abraham Accords framework between Israel and Kingdom of Saudi Arabia, the Kingdom of Saudi Arabia would probably have already joined the path of U.A.E.
Instead the delay prevented Israel and Arab moderate leaders to win a masterclass in foreign policy chess, while supporting commercial development and growing moderation in the most oil rich nation and seat of an ancient “religion of peace” as President Bush famously stated after America’s 9-11 tragedy. Delusional religious factions disdain economic and commercial development, and instead tend to want to trap its own people in a viscous circle of poverty and despair in order to recruit more ‘shareholders’ in their monopoly company, Terrorist Paradise Inc. as shown in the 2005 film, Syriana, which was based on American intelligence officer, Robert Baer’s, decades of experience in trying to eliminate state-backed religious-extremist terror .
Instead, according to NY Times foreign policy columnist, in an interview with Margaret Hoover’s Firing Line show, Brett Stephens, the Biden administration dropped the baton with their insistence on implementing a “two state solution” as unconditional co-requisite to continue scaling out the Abraham Accord negotiations. The fading Wahabist hardliners in Saudi Arabia breathed a breath of fresh air as their stake in “Terrorist Paradise Inc.” did not implode as they now can bank on such a deal being shuttled for the medium term.
In Ambassador Dore Gold’s 2003 book, Hatred’s Kingdom, that studied the Wahabi element of Saudi Arabia, he notes that they celebrated the terrorist attacks in the fall 2001, dubiously claiming that their religion allows them to “strike fear” in the hearts of “infidels,” “secularists” and “rebels.” Swap “secularists” for “Israeli techno concert attendees,” and one can see a pattern. Thus, just like on 9-11-01, our posterity, and history, will judge us with this question: “where were you at?” on October 7, 2023; and even more importantly, what did institutions do in the weeks after to fight against the baseless, yet age old hatred against Jewish people— especially the hatred of them having a homeland of their own?
Given the reports on CNN that 27 Americans were murdered, America must unite with Israel in its declaration of comprehensive war against Hamas: financial, diplomatic, military, and media. As President Bush said after 9-11: "You're either with us or against us." Mideast foreign policy expert, Dr. Daniel Pipes reminded us in a Wall Street Journal Op-Ed on 10-7-23, “Israel’s Opportunity to Destroy Hamas,” that President Bush warned that Hamas needed to be “dismantled”; in fact, he notes that at least 250,000 young Palestinians have emigrated from Gaza rejecting once they usurped power in 2005. Prior to 9-11 though, America has its own history of what happens when the state power does not remove ethno-religious terrorism from its society—and instead allows it to continue to raise finances and promote evil world views.
A hindsight review of the lessons learned from the Reconstruction period post America's Civil War shows there is no middle ground when it comes down to whether one should support people's right to exist and build their own communities, vs. implicitly supporting an ethno-religious terror group — whether the KKK, Nazi party, Al Qaeda, or Hamas. Clearly Israel does not want the Marine Corps with boots on the ground in Gaza, but they should be sharing best practices and “lessons learned” from the Corps’ efforts to defeat Al Qaeda in Falluja’s dense urban warfare in 2004. America though, in its stand in solidarity with Israel, can make a bigger impact on the wallet of Hamas, and those who fund it.
American institutions can do their part: divest from H@m*s. How? For example, if an investment account owns ETFs or mutual funds that invests in companies based in nations that did not express instant empathy and condolences to Israel (in a public manner for the world to see), then its due diligence team may find it prudent within a fiduciary context to sell those immediately and instead invest in Israeli companies and mutual funds/ETFs to upweight their exposure to equities/credit from American aligned nations in the volatile Middle East.
When Jewish people around the world "declared war on Germany" in 1933 following Hitler's elimination of their citizenship, and his statements of deranged conspiracies about people such as Dr. Albert Einstein, they did not have an army then.
Many political scientists believe FDR did not work quickly enough to turn off the financial spigot that had funded Hitler’s Nazi party’s rise to power and total control over Germany and Austria— let alone open Ellis Island to the obvious Jewish refugees from Germany in the 1930s.
Thus, divesting from Hamas and its international “supply chain” should be viewed just as important because much of the world has falsely conflated the ethno-religious terrorist organization as a legitimate organization in a pursuit of “justice for Palestinians.” One only has to examine their charter, or recall their pizza parlor bombings in the mid-1990s, to realize they are no MLK/Gandhi like organization. If reading their 1988 charter is too difficult, then simply watch the iPhone videos of Israeli civilians and guests who went running for their lives once their peace concert was breached.
Today, America must learn from that era: speed is of the essence. They did, though, have the power of business and the pen. Thankfully now, for the protection of a long-persecuted people, Israel and its allies have both the power of the portfolio, the pen, real paratroopers that don't murder concert-goers, and Patriot missiles. When examining a portfolio for “Hamas exposure”, one has to go beyond filtering companies that are domiciled in states hostile to Israel. Instead, one must identify the revenue by country contribution of the underlying company: a company that is hostile to Israel can be domiciled in a seemingly harmless Caribbean Island, for example, yet receive 90% of its revenue from the Islamic Republic of Iran.
DuLac Capital Advisory tried ChatGBT and Google-Bard AI for a quick look, but their information is not correct: VP Dick “Bomb Iran” Cheney’s former company, Halliburton, for example was cited by Bard as receiving “20% or more” of its revenue from Iran as of 2023. Anyone who has read the WSJ knows that is not correct[i]. Disclosure: my firm provides AI Prompt Engineering & model evaluation for institutional investment managers.
Identifying an underlying exposure to explicitly or implicitly pro Hamas companies, countries, and education institutions still requires hard work of establishing screens in fintech systems such as Bloomberg Terminal, Morningstar Direct, and Factset— and then checking the work by examining company financial statement disclosures. Recently launched Bloomberg GBT though may be a helpful tool to help expedite the various Bloomberg functions such as “PORT” and “SECF” needed to screen for such a strategy.
DuLac Capital Advisory L.L.C.’s GenAI Model Evaluation
for Investment Strategies to divest from Hamas linked
Countries and companies
GenAI not yet ready to provide accurate computes for prompts seeking to identify “Pro Hamas” (per mainstream foreign policy experts such as Council of Foreign Relations) Country exposure on a revenue basis.
Such a screen still requires experience and FinTech platforms such Bloomberg Terminal, Morningstar Direct, and FactSet, and/or Aladdin.
The Policy-Risk Nexus: Institutional Observations Amid Unnecessary ‘Strategic Ambiguity’ by Certain Policymakers
There are some policy advisors such as former NSA Chief, John Bolton, who have stated that President Biden's dilly-dally on hastily working to implement and expand Trump's Abraham Accords concept with Saudi Arabia, and its signaling of detente with Iran (e.g., $6 Billion allotment despite its anti-woman oppression in 2022) contributed to the conditions that “emboldened Hamas” to launch its tragic body tally of Jewish people and their allies. The result was quasi-state supported mass murder not seen since the days of Hitler/Himmler, just as anti-Jewish forces around the world wanted. Recall, for some unstated reason, President Biden did not meet with Israel's leader until a month ago — nine months after Netanyahu won. The $6 billion allotted to Iran being frozen today (October 12, 2023) is too little too late .
Essentially, Hamas implemented a modern-day mass lynching of babies and people due to the way they were born and their assumed religious beliefs: Chinese state news cited that there were even Chinese nationals murdered by Hamas. No billions will ever bring those people back. Americans of all stripes must stand against that notion, and against the various leftist college kids, modern Nazis, and "bohemians" that have marched in solidarity with Hamas of late, refusing to condemn its terrorism— even after videos of Hamas’ mass shooting and kidnappings of civilians at the concert in Israel emerged.
It must be noted though that underscoring the nexus between the current administration’s lack of motivation in leading negotiations to continue on the Abraham Accords between Netanyahu led Israel and Kingdom of Saudi Arabia is not a partisan opinion. Ever since the transfer of power between Federalist President Adams to President Jefferson— new presidents tend to downplay achievements of previous administrations in order to define their own path. That’s simply the nature of politics and policy formulation. For example, Governor Wes Moore of Maryland has long championed Israel as a sovereign homeland for Jewish people worldwide. Gov. Moore is an Army combat vet during the War on Terror and knows first hand the need to eliminate delusional religious extremism in the bud. In the immediate aftermath of the 10-7 terrorist attack on Israel, Gov. Wes Moore gave one of the most inspiring speeches to show support for Israel and explicitly condemn the Hamas 10-7 terrorist attack.
In fact, in his State of the State address in February 2023, Gov. Wes Moore noted that America should adopt Israel’s public service model as a way to expand social and economic mobility and create a more resilient civil society. He noted as well that civic organizations, companies, and social non-profits need to team up to stop the rising tide of Antisemitism. Hence, there have been plenty of Americans on both sides of the aisle that know Hamas is not Mandela’s ANC— let alone Fr. Ted Hesburgh marching with Dr. Martin Luther King for equal pay for all Americans. Hamas is akin to the KKK and Nazi SS: all three organizations’ documents reference the baseless and psychotic “Protocols of the Elders of Zion” as a ‘source’ for their anti-Human Rights claims against Jewish people and others who don’t accept their narrow, delusional view of their stated religion.
DuLac Capital Advisory L.L.C. notes that explicit support for Israel, and explicit condemnation of Hamas terrorism is not a partisan issue in America. For example, Gov. Wes Moore gave a well regarded speech condemning Hamas, noting his experience in combat during the War on Terror post 9-11.
Strategic Imperative for Supply Chain Divestment
Yes, supporters of Israel will have a visceral reaction to support the military action of Israel against Hamas terrorist, just like how NATO and Israel supported U.S. action against Al Qaeda and Taliban post 9-11. However, one must not forget that during Israel’s time of need, several companies, institutions, and countries did not stand with Israel: in essence they were not “good Samaritans” when they saw their neighbor stranded on the side of the road, bleeding and broken, down but not out, on his way to Jericho. For example, some mainstream analysts have pointed to how the Kingdom of Saudi Arabia’s Foreign Affairs minister did not condemn Hamas immediately following the attacks, and instead implied Israel’s occupation of Palestinian West Bank (recall, Israel withdrew from Gaza in 2005) was to blame for Hamas’ terror on 7 October 2023:
“The Kingdom recalls its repeated warnings of the dangers of the explosion of the situation as a result of the continued occupation, the deprivation of the Palestinian people of their legitimate rights, and the repetition of systematic provocations against its sanctities”
Could anyone imagine saying that the KKK’s terrorist attacks on African American churches, schools, and businesses following the Civil War withdrawal of Federal enforcement of the 14th amendment for African Americans was a result of “deprivation of the Confederate white people of their legitimate rights..”? Well, many in polite society actually did actually explicitly justify the KKK’s terrorist attacks on African American communities such as Tulsa (“Black Wall Street”), and many powerful people implicitly supported their efforts as well. For example, President Woodrow Wilson viewed the rabidly pro KKK revisionist movie, Birth of a Nation, at the White House and applauded it saying its portrayal of Confederates having legitimate grievances about their “rights” being “taken away” by newly freed African Americans, and thus had the right to “defend their honor” through bonafide terrorism was “like history written by lightening.” DuLac Capital Advisory L.L.C. recommends stakeholders to not be like Woodrow.
To this day, Birth of a Nation remains the most popular movie ever in America’s “silent film” era, with over 200 million viewers. Despite its abashedly pro-terrorism stance and clear stance against the spirit and letter of the amended U.S. Constitution, the movie still receives 91% score on Rotten Tomatoes. Imagine if Americans united with the NAACP back in 1920 and boycotted the movie, its production studio, divested from any bank that held the production and distribution company’s stock, and refused to fund the Commercial Mortgages for any Movie Theatre that aired the pro-terrorism movie?
It seems obvious now that should have been done; but it did not happen. Americans and Europeans thus should learn those lessons of implicit support for terrorism against historically persecuted people (akin to the Catholic Church’s teaching on the “sins of omission”), and thus employ a total divestment and defunding strategy of not just Hamas, but its entire “supply chain” of explicit (Iran) and implicit backers, Kingdom Saudi Arabia, during the third most deadly terrorist attack (the most deadly if factored by murder via small arms fire) in history.
Americans now know in hindsight the detriment caused to the fabric and original intent of President Lincoln and President Grant’s efforts to expand the “right to exist with self-determination and safety” to African Americans following the Civil War by not taking an active military and financial stance against the KKK and its Neo-Confederate sympathizers hell-bent on waging a terrorist insurgency to reverse political and economic gains the Union earned on the battlefield.
Similarly, the world should learn the lessons of America’s failure to respond financially to the re-birthed KKK in the early 1900s, and see that a similar narrative has emerged following Hamas’ terror attacks on Israeli civilians: the largest quasi-state backed “lynchings” in a single day since the invention of electricity. Therefore, American institutional investors seeking to be good Samaritans (and avoid potential OFAC regulatory risk) will increasingly examine their portfolios to determine whether they have companies from countries such as Qatar or Sudan who did not explicitly condemn Hamas’ terrorism on 7 October 2023, and instead created a false equivalency— in essence lending credence to the Antisemitic propaganda in the “cousin” movie of Birth of a Nation, Goebbels’ favorite: The Eternal Jew.
Update: The Think Tank, Middle East Forum, launched a campaign on October 27, 2023 to urge Private Equity and Hedge Fund investors to divest from Qatar, given their evidence that Qatar hosts the leadership of Hamas with permanent residency. Imagine Kingdom of Saudi Arabia hosting the ‘leadership of Al Qaeda in October 2001?
That deplorable film thankfully does not have any critic ratings on Rotten Tomato, however, it caused much damage when it was aired in Europe in the 1940s. The movie, just like America’s Birth of a Nation, portrayed a historically persecuted minority (Jewish Europeans) as conniving miscreants that were biologically and “spiritually” intent conducting financial crimes against non-Jewish Europeans and sexual assault of “pure blood” German women. Thus, it justified state backed deprivation of due process rights, political rights, business rights, property rights, terrorism, and the eventual Holocaust against the Jewish people. In hindsight, in 2023, nearly everyone in the West acknowledges the evils and falsehoods of such movies.
However, when Foreign leaders, company executives, or education institutions did not explicitly condemn Hamas for their terrorist attacks, and instead put blame on democratic Israel, they were essentially reinforcing the same baseless tropes, and repeating the same errors from history that have previously justified violence and property destruction against African Americans and Jewish people worldwide. Therefore, Americans who stand against delusional ethno-religious terrorism, and its implicit backers, must short/divest/defund any country or company that was silent on Saturday or created a false equivalency of Hamas’ terror as a “justified military response” to Israel’s alleged “systematic provocations.”
DuLac Capital Advisory L.L.C. agrees with the Jewish Federation of North America, ADL, and JCC that media and industry must not accept Hamas terror— it is no different than the SS, KKK, or ISIS— and thus must be defunded and divested from with government and private sector investment portfolio actions.
The "Cost of Capital" Strategy: From Analysis to Action
Interestingly, BlackRock, the largest ETF and index fund manager in the United States, has an indexed based ETF offering exposure to Israel’s stock market: it has $118 Million in Assets Under Management (AUM). The iShares MSCI Israel ETF (EIS) is based on an MSCI benchmark and rolls up to MSCI’s broader global equity index (ACWI): tellingly, Technology-focused companies are its largest sector contribution on a market cap basis, at over 40% (source: ETF.com). iShares by BlackRock launched EIS in 2008. In comparison, the same firm also offers the iShares MSCI Saudi Arabia ETF (KSA). Although the fund was launched in 2015, it has already far surpassed EIS in AUM, with it now at $873 Million— fast approaching the symbolically important $1 Billion mark.
According to iShares.com, EIS has an MSCI ‘ESG Quality Score” of 6.1 out of 10: in comparison, KSA has a MSCI “ESG Quality Score” of only 3.7 out of 10. MSCI ESG does not take into account a nation’s adoption of human rights into its company ESG ratings. Essentially, investors in the West have “rewarded” Saudi Arabia’s energy and financial sector heavy equity market with the assumption that the nation-state was normalizing relations with its neighbors, and responsible global partners, including Israel. The recent statement from Saudi Arabia’s Foreign Minister that did not condemn Hamas explicitly, and Saudi Arabia’s subsequent actions that have included meeting with Syria’s leader and a Saudi Arabia’s call to Iran on 12 October 2023 underscores that perhaps investors were too optimistic on the change of Saudi Arabia polity.
Over the last five years per ETF.com, KSA has actually outperformed EIS by over 7.5% (as of 10-12-2023). Therefore, there likely will be many American institutional (and individual) investors who want to stand against Hamas terror, and those who did not explicitly condemn it, that will consider whether they have exposure to state-backed companies within 1940 Act investment funds, or unintentionally have exposure via individual stock outright. In a show of support for Israel’s right to exist in safe and secure borders and its support for human rights within its multi-cultural nation, those investors may seek to divest from such companies and funds whose leaders did not stand with Israel in the time of need, and instead invest in Israel through charities supporting the victims of Hamas, and/or Israeli equities— deemed the “tech star up nation.”
DuLac Capital Advisory L.L.C. believes once the raw (and understandable) emotion of the 10-7 terrorist attacks transforms to calls for scaled action, allies of the multi-cultural, tech focused nation will initiate stakeholder campaign of their own: allies for Israel will demand the major Wall Street Asset Managers to close down ETFs and Mutual Funds composed on countries and associated companies that did not stand with Israel after 10-7 terrorist attack. Additionally, these stakeholders will likely call for the major Wall Street trading houses to no longer trade such countries stocks and bonds. Such concerted actions will be viewed as simply a defensive maneuver: the Boycott, Divest, Sanctions (BDS) movement and divestment campaign against the state of Israel is deemed Antisemetic by the ADL, yet it has achieved significant support in the West over the last ten years.
The query is simple: which countries, corporate leaders, academic institutions, and NGOs (falsely) implied Hamas’ terrorist attacks, mass lynchings, and kidnappings were “legitimate” and/or Israel’s fault?" This is based on our experience in dealing with the aftermath of advising clients on ways to defund Isis’ supply chain while in 2014, the tragic school shootings in America, and last year’s calls to delist Russia focused equity ETFs and ban mutual funds from owning Russian stocks. BlackRock, Van Eck, and European’s largest Asset Manager, Amundi, in fact closed down their Russian equity focused ETF in the heels of its invasion of Ukraine.
The Jewish Federation of North America has set a target to raise $500 Million to support the Israeli victims of Hamas’ terror campaign. That can efficiently be achieved and exceeded through portfolio reviews that identify anti-Israeli country and company exposure, and moving those assets to support companies and charities that are seeking to make a positive impact in Israel in its efforts to remain a safe and multi-cultural Homeland for Jewish people.
Such a strategy is akin to some institutional investor reaction when various mass-shooting tragedies in America occur, many concerned institutional investors screen for civilian firearm companies within their portfolios to understand their exposure as stakeholders or pension beneficiaries want to know. Raising the weighted average cost of capital for companies and countries that implicitly supported Hamas’ Nazi-like terrorism, is an essential lever in the tool-kit to ensure the lessons learned in both America post Civil War, and in Europe in the 1930s/1940s, are not repeated again.
DuLac Capital Advisory L.L.C. agrees with the Jewish Federation, ADL, and JCC that media and industry must not accept Hamas terror— it is no different than the SS, KKK, or ISIS— and thus must be defunded and divested from with government and private sector investment portfolio actions. (source: ETF.COM)
Born Imperative: Historical Parity and the Case for Full Divestment from Terrorist Apparatuses
Jewish Americans, just like African Americans, especially, have a long history of patriotism to the Stars and Stripes in its original intent of expanding freedom, property rights, and democracy around the world. The KKK persecuted African Americans at the same time the Nazi SS persecuted Jewish Europeans. Hamas is no different. Hamas certainly stands against that with its SS-like murder rampage of innocent civilians, 27 of which were Americans. It is thus quite peculiar and telling of the (so-called) "BLM" of Chicago to have recently tweeted its "solidarity" with Hamas following their horrendous lynching of 1,200 people in Israel. It should be noted, that the CEO of BCF, Diante Johson—another organization that advocates for African Americans’ political and economic advancement— condemned Hamas terrorism and supported Israel in a tweet.
If Germany and its allies murdered 6 million Jews and sterilized tens of thousands of African Germans (Hitler dehumanized them as the “Rhineland Bastards”), how could any organization not see terrorism against Jewish people, and the denial of African descent people’s right to exist as two sides of the same coin? Therefore, all Americans, regardless of their religion or racial background, should stand against Hamas, just like decent people stand against the KKK and Nazi SS groups. IDF will obviously do its part from a military front, but just like the Nazi Party and its state apparatus, it took the free world’s complete divestment from its tentacles in order to weaken not only its physical resources that it used to wage war against Jews and their allies, but also the core of their delusional “invincibility” belief system as well.
Ryan Scott
Executive Director and Founder
DuLac Capital Advisory
Institutional Investment Due Diligence & Policy Insight
RyanScott@dulaccapitaladvisory.com
https://www.dulaccapitaladvisory.com/
[i] Google Bard provides incorrect information currently with a prompt to identify publicly traded companies that receive 20% or more of their revenue from Iran:
DuLac Capital Advisory L.L.C. does Gen AI prompt engineering and evaluation for investment managers— Google-Bard AI is incorrect in this prompt request to identify companies that derive 20% or more of their revenue from Iran.
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Institutional investors are responsible for understanding and complying with all applicable laws, regulations, and guidelines related to their investment activities. The Firm's materials are not intended to replace or substitute for legal or regulatory advice.
The Firm disclaims any liability for the use or interpretation of the information provided in its materials. Institutional investors should use their judgment and exercise caution when relying on any information provided by the Firm.
For personalized investment advice tailored to your individual circumstances, we strongly recommend consulting with licensed financial advisor at a major Wealth Manager.