Ovadia Levy and the American Dream

Lawrence Meyers
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Posted: Jan 23, 2016 12:01 AM
Ovadia Levy and the American Dream

Some people just have the knack.  That’s the case with Ovadia Ovi Levy, named for his grandfather, a famous Israeli developer who built large sections of modern Jerusalem.  Although his grandfather died when Ovadia was only four years old, Ovadia says, “I felt strongly connected to him then, and even more so now, even though he’s passed on.”

That knack is a head for business – all kinds of business.  “I just felt a duty to continue his legacy,” Ovadia Levy reflects, “and was so inspired by his philanthropy, that I made it my mission to be successful. Somehow Hashem blessed me with a gift for understanding what business meant, and how to execute a plan.”

Ovadia Levy grew up in the United States, and graduated the University of Florida’s Warrington College of Business.  Barely 21 years old, he channeled his grandfather’s acumen and launched a nationwide auto leasing and sales business.  He financed sub-prime auto debt, leveraging his relationship with four local banks, collect a fee on each deal, and began building wealth.

“There I was, still a kid, making $50,000 a month,” he recalls.

Ovadia Levy later sold the auto finance business to get into a lucrative emerging market – niche cable network distribution.  He managed to secure an exclusive license from legendary film producer Arnon Milchan, at age 24, to distribute various Israeli television networks through the Dish Network satellite television operation.  The license allowed him to generate revenue two ways: selling advertising and for each and every installation. 

Once Ovadia Levy signed up as many Israelis as he could for their home-grown television content, he sold the business off, as it still had residual advertising value.

“Opportunities just seemed to appear,” Ovadia Levy recalls.  “For many people, business concepts just don’t make sense.  I’m blessed, in that if I understand what a business does, how it operates, and where the pitfalls are, there’s a pretty good chance I can make money at it.”

As if the diverse fields of auto leasing and television weren’t enough, he then moved into pre-construction lending solutions.  With his excellent banking relationships from previous ventures, he was able to assist individuals in obtaining financing for homes that had not yet been built.  He earned a fee for each down payment.  The developers and builders were happy since they had ironclad contracts from buyers. The banks were happy because they those same contracts guaranteed that their collateral would be built.

Alas, the financial crisis hit just nine months into the venture and Ovadia Levy had to move on.

He had a scare not long after, when he was diagnosed with stage 3 testicular cancer.  Although generally not fatal, his life was turned upside down for 4 months as he received dose after dose of chemotherapy.

“The medicine addled my brain, I’ll tell you that.  But when it was all clear, and the doctors gave me a clean bill of health, I felt re-energized and a commitment to the philanthropic side of my life that I hadn’t fulfilled.”

Ovadia Levy then jumped wholeheartedly into charitable work.  He is a sponsor of VBS Summer Camp, a program whose mission is to equip children with the tools to grow spiritually, emotionally, intellectually, and socially.

He is a major donor to Boys and Girls Club of Florida and heavily involved with the CLL Global Research Foundation, dedicated to battling cancer.

“You can have all the money in the world, but if you aren’t using some of it to change life for the better, to impact the lives of the less-fortunate, then you are the poorest man on Earth,” he says.

Back in the business world, Ovadia Levy now manages a private equity firm.   His keen instincts have permitted him to anticipate much of the turmoil facing the stock market.  Levy began buying into the momentum stocks in 2011, seeing that stocks were being bid up to unreasonable levels, but recognizing that sitting on the sidelines wasn’t the best move.  The trick, he knew, was when to get out.

He got concerned in 2014.  He felt Janet Yellen was being far too political in her post, keeping interest rates too low to please the President.  He saw the national debt and deficit increasing.  His research kept screaming that China’s growth was slipping while other pundits insisted that the opposite was occurring.  Yet he knew businesses were sending their work to other Asian countries.

Levy turned various scenarios over in his mind. He knew that the market as a whole was not necessarily overvalued, but that the same momentum stocks he had been buying had gotten way out of control.   Some two dozen of these stocks accounted for $2.5 trillion in market cap – almost 13% of the national debt.  It wasn’t rational.

“It wasn’t easy, but I went from being a bull to being a bear.  I decided to go with some long-term short positions, hedging the bets by exercising option trades.  My funds lost money initially, and I went from being a buy-and-hold kind of guy to a guy who monitored stocks on a day-to-day basis.”

Unlike before, when he had a stable portfolio, he was now moving in and out of stocks on a weekly basis.  When 2015 rolled around, he knew it was just a matter of time before the bottom fell out.  His social media pages, such as Facebook, confirm that he was calling for a dangerous collapse all the way back to 2014.  He called for a 30% correction just weeks before the August flash crash, and said we’d be in a 2-year bear market…at a minimum.

“Wages were stagnant, inflation was rising.  We kept hearing about unemployment falling but not about the Labor Force Participation Rate, which also kept falling.  M&A activity was going gangbusters, which often signals a top.  Then the Fed raised rates.”

Boom. That was the final blow to the market.  The high flying momentum stocks have been under tremendous pressure, but now Levy held short positions in them.  Once again, his business instincts served him well.

What does he see going forward?

“I think the economy is in terrible shape, and so is the stock market.  I would be out of the market now, and perhaps only be long things like utilities, General Motors, Ford, and Electronic Arts.  I would short the FANG stocks if you have the stomach for it.  I would short the S&P 500, but use stop losses. “

Most of all, however, Levy says to invest in yourself.  That means two things.  First, he says, pay off your mortgage.  That’s buying a piece of land, which is a hard asset. 

Second, he says, put the money aside.  “Be grateful you have a place in this world, in America, where hard work always pays off, and where you can become the person you have always wanted to be”.