Investing guru Warren Buffett shocked the investing world exactly two years ago when he plunked down a cool $4 billion on an Israeli company, Iscar, that specializes in metal cutting tools. It was his largest international purchase by far, and investors were left wondering what he was thinking.

Well, flash forward to May '08 and once again Buffett appears to be a genius. As reported by Marketwatch: "Buffett said that he had very high expectations when Berkshire struck the deal, and that the metal-cutting-tool maker has "exceeded that in every way."

"It's been a dream acquisition," he said.

Since that acquisition, Israel has become a hot destination for foreigners to invest. The local stock market has been one of the best performers in the world and the Israeli currency, the Shekel, has surged to record highs and has been the second strongest currency in the world in '08.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 5/1/08