Big news out of Moscow yesterday. And I don't mean the news that got the big headlines.

Someone in the Bush foreign policy and national security arena may just have been very much awake at the switch. If my analysis proves correct, the current president will get the credit but the American people and the rest of the world will reap the benefit, and a massive benefit it will be, surpassing any success in picking a stock or being right on a market gyration.

Could a carrot-chomping Bugs Bunny become a drug pitchman? Well, maybe, if the small Israeli company Protalix BioTherapeutics (PLX) could pay Warner Brothers enough money for Bugs' services. PLX also needs to first win FDA approval of its drug for the rare, genetic Gaucher disease. And today that's looking like it could happen sooner rather than later.

Protalix announced this morning that the FDA has approached the company about possibly making the late-stage experimental drug available to certain patients under a special expanded access program before it's even formally approved. The agency is reacting to the recent setback suffered by biotech giant Genzyme (GENZ), which is having manufacturing issues at the plant that makes GENZ's very expensive, but widely used blockbuster Gaucher drug, Cerezyme. Apparently the agency is trying to avoid the impact of a potential shortage of treatments.

IncrediMail (MAIL) continues to deliver on its promise. Yesterday they announced extension of their Google (GOOG) traffic, which is driving the revenue growth and profit growth. It also removes the big risk hanging over the company's head in the near term.

Here are the reasons I continue to be bullish on IncrediMail (full disclosure: I am long MAIL):

Barclays Capital came out predicting a quick end to the shallow Israeli recession, and a return to decent growth of 2.9% by next year. Keep in mind that the Israeli economy was late to the ‘recession game’ and looks to be an early ‘exiter’ from economic turmoil as well.

With all this great news Barclays said that they expect an Israeli Shekel/USD exchange rate of 3.65 buy the end of the year. That’s a big move from the 3.93 area that the currency is trading at now.

Today I am adding another small Israeli company that is trading at a discount, in my opinion, and has the potential to rise significantly if it maintains its growth, especially in profit, as it did in its first quarter results - IncrediMail Ltd. (Nasdaq:MAIL).

The company's business model is unique, in that it is built primarily on revenue from Google (Nasdaq: GOOG), which means it has a lot of potential, along with not a little risk. Whenever a small company depends on one gorilla it is exposed to the mistakes of the gorilla.

In Part I of this series, I discussed some of the global trends in freshwater availability and drinkability. It is nothing less than amazing to me that somehow 6 billion people sustain life on the roughly 1% of the earth’s water that is not salt water or brackish water (comprising about 97.5%) or encased in polar and glacial ice (about 1.5%).

An important industry has developed around this fact to treat, clean, and transport this water from its various sources to where people drink it, shower in it, irrigate their fields with it, and use it in literally thousands of manufacturing and agricultural applications. Because of the limited supply, much of this “waste” water is then purified, cleaned, and recycled for use again. But we can only refresh, re-use, and recycle so much.

If current trends continue, there is no doubt that there will be wars fought in the 21^st century over water. Not oil. Not ideology. Not theology. Water. Survival.

It takes somewhere between the three pounds of grain the National Cattlemen's Beef Association estimates and the sixteen pounds some environmentalists and vegetarians claim to produce a pound of beef. I believe the truth lies closer to the cattlemen’s numbers – all the ranchers I know, and I know plenty, graze their cattle where they consume vast quantities of weeds and natural grasses. What business person wants to buy grain, adding to their cost of doing business?

The acquisition of Israel’s 3DV Systems by Microsoft (MSFT) has been rumoured for a few weeks, but confirmation was given today at the annual press conference of Microsoft’s R&D Center in Israel, one of Microsoft’s four strategic regional development centers. The announcement comes just a few days after the Antitrust Authority approved the deal.

Project Natal, a revolutionary new way to play: no controller required. See a ball? Kick it, hit it, trap it or catch it.

Esther Levanon, Chairperson of the Tel Aviv Stock Exchange, gave the below interview on CNBC this morning. A few comments:

By Heather Bell

Country classification has gotten really interesting in the past couple of years with the rising interest in emerging and frontier markets. But that's probably just my inner unrepentant nerd talking.

Two weeks ago, I added Verint Systems Inc. (VRNT.PK) to my portfolio tracked at "Globes", and said I would write more later. After a share price jump of 25%, I will go into detail.

Verint is a unit of Comverse Technology Inc. (CMVT.PK), which owns about 65% of it, on a fully diluted basis. With no financial reports from Comverse or its subsidiaries for several years, investors are a bit in the dark. Sometimes a situation like this leads to an investment opportunity, which I believe is the case with Verint, which already touched a low this year of $3 per share, compared with the current $11.

If you haven't made money these past two months, you haven't been paying attention. You could pretty much just toss darts and find undervalued companies two months ago but now the pickings are getting slim. It looks as though the easy money has been made for the short term and that we will have to get back to old-fashioned stock-picking to carry us through the summer.

I still like commodities and therefore I still like the Australian dollar and the Canadian dollar. There are various ETFs that allow you to play those trades but they been on an incredible run so I would look for a pull-back before jumping into the resource sector.

As hinted Tuesday, including on my instablog, Alvarion (ALVR) officially announced a deal that will exceed $100M over 5 years. Now the deal is with Open Range instead of Clearwire (CLWR). Open Range is a company I've never heard of so I was skeptical at first.

After reading up on them and understanding that a large part of the funds is coming from the Rural Broadband portion of the stimulus plan, I'm a lot more comfortable like the market that this is a solid deal. Not to mention that ALVR has a history of being conservative.

Index compiler MSCI Barra announced earlier this week that Israel will be reclassified from emerging market status to developed market status, forcing some of the largest ETFs on the market to do some rebalancing in the coming months.

Israel will be removed from the MSCI Emerging Markets Index and the MSCI EMEMEA Index, which includes emerging markets in Europe, the Middle East, and Africa. The MSCI Israel Index will now be included in the MSCI World Index, where it is expected to rank 18th out of the 24 developed market member countries, ahead of Portugal and Ireland.

Israel is saying shalom, as in good-bye, to emerging market status and is joining the ranks of the developed world according to MSCI index classifications. Israel will now be included in the MSCI EAFE index with a current weighting of 0.83% as well as the MSCI World and Kokusai Indexes, according to a recent report from Bank of America Merrill Lynch (BAS-ML).

Graduating to developed market status means more dollars from passive investment strategies (index funds) with potential net inflows of $2.8-billion, according to BAS-ML. Apparently there are $15 in developed market passive strategies for every $1 in emerging markets.

by Brenon Daly

After being out of the market for more than a year, NICE Systems (NICE) is looking to do deals again. The Israeli company inked a pair of asset purchases in 2008, with a total bill just shy of $20m. Those pickups came after NICE made its largest acquisition to date, the $280m cash-and-stock purchase of Actimize. With no debt and some $530m in cash and equivalents, NICE certainly has the means to do deals. The firm didn’t offer a peek at its shopping list, but said Tuesday at the RBC Technology, Media and Communications Conference that it will be active.

Intel (INTC) announced a further investment of $43 million through Intel Capital, in the mobile WiMAX venture in Japan, UQ, that it is promoting jointly with telephony company KDDI (KDDIF.PK), which is supplying the network infrastructure, and another four Japanese companies. After a five-month trial period, the service will have its commercial launch on July 1, and by 2012 it will reach coverage of 90% of Japan. With the launch of the service, several companies will introduce new notebook computers on the Japanese market, equipped with embedded WiMAX-enabled chipsets.

In the Israeli context, and despite the fact that it has no share in the project, this is very good news for Alvarion (Nasdaq: ALVR). Without Intel's backing, the WiMAX vision would long ago have been buried, and LTE, a technology that is gathering momentum from day to day, would be unchallenged. A first LTE-based project is due to be launched in the US next year by Verizon (VZ). For Orckit Communications (Nasdaq: ORCT) too, the Japanese venture is very good news, in an even more concrete way, for KDDI's entire network is based on its technology, and any expansion for the purposes of providing WiMAX services means larger procurement from Orckit. I believe that this will happen very soon, because, apart from the new service, KDDI's network is coming to the end of five years with the same equipment, and in telecommunications it is normal to renew equipment at the end of five years or even less.

It was only a few weeks ago that market pundits were predicting the US Dollar to reach 4.5 against the Israeli Shekel. Well, what sayeth you pundits now?

Can you say 3.89? Giddy up. The Shekel, like most other currencies continue to soar as President Obama continues to print money. We have seen a 7% fall in the USD/NIS rate in less than a month. Didn’t Obama say that he wanted a strong greenback?

I recently attended a conference for institutional investors in Tel Aviv. I came away with a better understanding of the Israeli institutional investment world and with some insights that may be of interest to independent investors no matter where they’re located.

Since Israeli banks are prevented by regulation from managing mutual funds or pensions, the main players in the Israeli institutional investment space are the large investment houses and insurance companies (Psagot, Clal, Migdal, Harel, etc.).

Amdocs Ltd. (NYSE: DOX), which I hold in my portfolio tracked by "Globes", has appeared every so often in the Israeli press in negative items about layoffs or leaving offices. However, it recently held a fairly optimistic analysts' day in New York, which encouraged investors.

Sometimes, paradoxically, what encourages investors can depress employees. Amdocs management made it clear that as long as the global economy is in recession, the company will continue to aggressively maintain its profit level and cash flow. That means potentially more layoffs and office closures.