Taking Stock / I Told You So

A few months ago, Lev Leviev claimed in a private conversation that the only reason Nochi Dankner got IDB Holdings on the cheap was because he, Leviev, had declined to bite.

"Unlike Dankner, I had no problem writing a half-billion dollar check and taking IDB on the spot, but my wife told me I'm working too hard," Leviev said.

That comment came to mind this week when Motti Zisser convened a press conference to announce, "I told you so."

Zisser, who on Tuesday agreed to sell his shopping mall operations in eastern Europe, fired off a string of declarations and forecasts, some pretty remarkable, about his business. Among other things, he told the reporters that he'd have invested hundreds of millions of dollars in India as he did in eastern Europe, because "money's lying around for the taking over there," but his wife wouldn't let him.

Yes, ladies and gentlemen, that's the spirit of the times. After three years of crisis on the capital market, losses and financing difficulties that had Israel's top businessmen hunkering down, lowering their profiles and avoiding the press, the sentiment has changed. They're back on the dais, and talking loudly.

Wednesday Motti Zisser officially inaugurated the season of "I told you so." The real estate baron, until recently considered a problem borrower, apparently built up a lot of anger against the banks, the media and the business community during the bad years. Now that the markets are picking up and he's got that plush deal in pocket, he's letting off steam.

Here are a few (translated) quotes from what he had to say:

"Elbit Medical is worth five times its market cap ... We created a new consumer language in eastern Europe ... What we know best is now to make our dreams come true ... there will always be doubters who object to what I did. In Sea & Sun [a ritzy seaside project just north of Tel Aviv], I was told not to go to the edge of town where the whores are, and look, it's become the best project in Tel Aviv."

What was less obvious from Elbit Medical Imaging's announcement was that to a degree, Zisser decided to cash out and move on.

After five years of massive investing in eastern European shopping centers, he sold 90 percent of the endeavor to an American fund. His capital gain will be about NIS 140 million before tax. That profit is apparently not quite finalized, but depends on certain contingencies.

And it is a handsome profit, to be sure, but considering that Elbit Medical lost NIS 90 million this year, it is hard to say that his Eastern European property adventures were a stunning success. It is apparently a lot less lucrative than Zisser himself had expected. His decision to relinquish most of the ownership rights to the malls while retaining the management could indicate that something went wrong in Zisser's road to becoming the shopping center tycoon of Eastern Europe.

Just the truth

In any case, Zisser is just the first. Barring a downturn in the markets, we can expect a whole parade of businessmen who'd been crushed by the credit crunch to step forth. After two years of keeping mum, of desperate negotiations with the banks and fighting to survive, they're raring to blare out how well they've done.

Naturally, their bankers, their financial managers and sometimes they themselves know the truth is something a little different. If not for the upturn on the markets and the U.S. loan guarantees, which lowered interest rates here at home, many of them wouldn't have weathered the crisis. In many cases that rally came at the last minute, a moment before the banks closed in.

Who, me?

Now the I-told-you-so marchers will be trying to rewrite five years of history. No! I did not succumb to the temptation of making expensive, megalomaniac investments. My financial situation is and had been excellent, and now the truth is coming to light - everything I'd been saying had been true all along! The banks were worrying over nothing, the criticism of my business affairs stemmed from ignorance, and if the wife had let me, I'd be doing double what I'm doing now.

But, in most cases, their situation had been horrible until recently, their leveraged investments had been risky or expensive or both, some of them had teetered on the brink of bankruptcy and if not for the upswing on the markets, things would have ended very differently.

Like the bankers, investors reading the papers ask themselves whether they were wrong not to retain their optimism. Well, the situation all too many companies and businessmen found themselves in a year or two ago was highly uncomfortable. And not everybody reached Nirvana. All too many casualties remained behind.

As for told-you-soers themselves, some may need that explosive burst back onto the financial pages to compensate themselves for the tough times. But we must hope they don't believe everything they read in the papers, and don't forget the lessons of the last five years.