Zvi Stepak: 'An Investor Who Doesn't Know How to Lose Doesn't Know How to Earn'
Zvi Stepak, founder of the Meitav investment house, managing nearly half a trillion shekels, shares his market outlook. He advocates for caution, diversification, and the ability to admit mistakes in a volatile financial landscape.
We are conducting the interview with Zvi Stepak in his office at the Meitav investment house, on the 33rd floor of a tower in Bnei Brak, overlooking Gush Dan and the Mediterranean Sea. Stepak, who recently celebrated his 80th birthday, recalls that the last time he visited the Ramat Gan Stadium, it was just a limestone hill with no seats.
As the founder of Israel's largest investment house, Stepak began his career in 1979 with partner Shlomo Simonovsky, transitioning from a history teacher to a capital market veteran. "When I started, there were no computers," he recalls. "It was a decade of hyperinflation where orders were placed on paper, and you only knew by the end of the day if they were executed." Today, Stepak serves as a director and maintains a conservative personal strategy: he does not invest in individual stocks, preferring mutual funds and ETFs.
'An Investor Who Doesn't Know How to Lose Doesn't Know How to Earn'
Stepak emphasizes the importance of psychological resilience. He argues that many novices fail because they refuse to cut losses, hoping for a price recovery. "An investor who doesn't know how to lose doesn't know how to earn," he asserts. "You must admit your mistakes rather than clinging to the illusion that a loss is only 'on paper.'"
Regarding current market conditions, Stepak is decisive: he recommends reducing stock exposure. "After a decade of extraordinary returns, it is illogical to expect the same in the next ten years. According to the Fed model and Robert Shiller’s calculations, the market is overheated, with multipliers at historic highs," he explains. While he doesn't suggest exiting the market entirely, he insists on adjusting the 'dosage' and increasing liquidity.
Risks and Opportunities
Among the primary global risks, Stepak highlights a potential Chinese blockade of Taiwan, which would paralyze the chip industry, and the risks associated with AI over-investment. "If the market decides that AI investments aren't yielding returns, it will be a problem. I estimate that a collapse of one of the major companies, such as Oracle, is possible," he warns.
Regarding Israel, he points to the risk of economic recession. However, Stepak remains optimistic about the long term, noting that political stability and the expansion of the Abraham Accords could provide a market boost. When asked about real estate, he is clear: "Stocks are more profitable as a long-term tool; you should only buy an apartment for personal residence."
