DTEJD1997

I am proud to say that I had some CASA. Wish I had more. At it's low point, the market cap was indeed less than one restaurant. It also had a P/E of maybe slightly less than one, and was trading for 5% of book value if I remember. I actually showed up to their annual meeting, and they couldn't believe a shareholder showed up. I was the first one in 12+ years to attend the meeting. Once they got over their shock, management was generally pretty friendly. Wish I could find more CASA's....

I've been investing for about 25 years, and it is DEFINITELY harder to find good deals. HOWEVER, there are veins where you can get good ore. For example, the mining sector is definitely down right now, especially junior producers. You can find companies with solid balance sheets, producing mines, strong cash flow producing net profits, and even paying dividends... As always, there are some bargains in the micro-cap sector, but you've got to look at a lot more candidates than you did 2 years ago...

If the pilot(s) were going to commit suicide, why would they fly for HOURS off course? I think it is most likely that the plane was hijacked and was diverted to a different location. Think Pakistan, or thereabouts. I also think it is most likely that they had problems, ran out of fuel, OR had a passenger rebellion and crashed into the Indian Ocean. After 9/11 I would find it hard to believe that passengers would KNOWINGLY let any plane get hijacked. I think passengers & crew would fight to the death to regain control. If they could not gain control, then they would crash the plane. I also think there is a small chance that the plane was taken to some airfield. There was speculation that governments knew EXACTLY where the plane was/is and were negotiating with the hijackers. That they didn't want word to get out and have a media circus. After a week, I don't think this is the case. Finally, I think there is a good chance we will never know exactly what happened, especially if the wreckage is 600 miles from where we expect it to be and is covered by 2 miles of water.

According to my limited understanding, you can "pierce the corporate veil" in only a couple of ways... A). defect in formation of the entity B). Under capitalization of the entity C). Fraud D). Commingling of the entity I will assume that all members of this board would never engage in C. I will also assume that we all can satisfy requirements of A. Especially if you use an attorney who has experience in these type of things. So that would leave B & D. Having a "normal" mortgage would not meet the test of under capitalization. Back when I studied this, it would have to be something pretty egregious. To pierce the corporate veil on this would be relatively rare. Simply having a lot of leverage or debt would not be enough... Commingling would be treating the entity like your own private piggy bank. Withdrawing funds without declaring a dividend, shoddy or no record keeping, basically running your entity exactly like a sole proprietorship or DBA. That the assets of the company and the primary shareholder(s) were frequently intermingled... So, as long as you correctly form the entity, put in some amount of capital, AND run it reasonably correctly, I doubt the veil could be pierced. Of course, this is just my opinion, and NOT legal advice.

Hey all: Thanks for the input. I use it almost every for about 15 minutes or so. I DEFINITELY find it improving my short term memory and attention. It gets my brain "jogging". I think it helps get my mental processes going, especially if I do it in the AM. So, I most definitely think there is some small benefit to it.

I agree with a lot of what you say, BUT do you think property in CA, especially L.A will continue to appreciate 7% a year for the next 20 years? If so, that $1MM house today will be something like $4MM 18-20 years from now? Wages have not been going up that fast... Who is going to be able to pay $4MM for a somewhat above average house 20 years from now? Heck, I am amazed there are enough people willing/able to pay $1MM for a house now... In certain areas of the country, you can get a very, very nice house for $100k or $150k. At some point, I would think business/buyers will start moving away from the high cost areas. Granted, living in LA is better than living in Indiana or Michigan...but at some point the cost simply is not worth it... You are starting to see this in the legal profession...work is being outsourced out of NYC and DC to Detroit and Minneapolis. You can get plenty of lawyers willing to work for $25/hour in the midwest....so work is moving out of the high cost areas. I think this trend will accelerate in the future. isnt this all the more reason its not sustainable. Less and less people got to buy a house, so now the next 20 years that number will rapidly be even lower, untill a cap is reached. Who says that cap wont be reached 5 years from now? Unless the chinese come in and start buying everything. I remember in the late 80's people wringing their hands and fretting about the Japanese buying up all sorts of real estate, Pebble Beach, Rockefeller Center, etc. As a very young man, I was complaining about this to a much more experienced business man. He laughed & smiled, said it was GREAT! Are the Japanese going to pack up the real estate & take it to Japan? If a USA investor/businessman is selling to the Japanese, he knows a LOT more about the local market, and made a nice profit. So perhaps if the Chinese come in buying, that will be the sign of the market top. In areas of Texas, you can get VERY nice houses for $150k to $200k if you are willing to go to the suburbs & exurbs. Even less than that in Midwest. If you are willing to settle for a "modest" house, you can EASILY get one for $60k in Michigan. Commercial real estate is even less! At some point, I would think that individuals/business start pulling away from the coasts. Sure, California is nicer than the Midwest, no doubt. Are you going to pay 10X, 20X, 30X to live & work there?

Zach: This is definitely a topic that could sustain a whole thread. There are books & courses designed with JUST this question in mind... Basically, what you want to do is limit your risks from a catastrophe AND have a tax pass through advantage. If you are dealing with relatively small amounts of capital AND relatively few principals who live in the same state, you could do a LLC, or a subchapter S company. A chapter "C" company has the double taxation problem, BUT can have principals from different states and can handle huge amounts of capital. As a rule of thumb, you want to stay away from partnerships... If you are going to be doing anything with investors, it is DEFINITELY worth a few hundred dollars to consult with a competent attorney in your jurisdiction. An ounce of prevention is worth a KILOGRAM of cure. Here is tip...the legal market has COLLAPSED. Many attorneys are looking for work (or out of work) and have mind blowing student loans to pay off. So feel free to negotiate over attorney fees.

I continue to buy junior producing miners. I managed to get some Rambler Metals! Stock is kind of thinly traded... They have a strong and improving balance sheet, having recently paid almost all of their debt. They have strong cash flow. They have a good mine, in the relatively stable country of Canada. Anybody else in this one, or know anything about it?

What do you mean by "functionally illiterate"? According to estimates by The National Institute for Literacy, roughly 47 percent of adults in Detroit, Michigan -- 200,000 total -- are "functionally illiterate," meaning they have trouble with reading, speaking, writing and computational skills. Even more surprisingly, the Detroit Regional Workforce finds half of that illiterate population has obtained a high school degree. http://www.huffingtonpost.com/2011/05/07/detroit-illiteracy-nearly-half-education_n_858307.html I suspect that UNDERSTATES the issue by quite a bit. I have a family member who worked as reading tutor in Detroit maybe 8-10 years ago. I also have friends/family who are/were deeply involved in public education in Detroit. I grew up in the city also...and still have family/friends/business there. This may be a topic for a different thread, but what is going on in Detroit is somewhat alarming...

How many young people have a NEGATIVE net worth? I'm not talking about a few hundred or a few thousand on a credit card or owing for a car. I PERSONALLY know two youngsters who are going to spend $100k+ on an undergraduate degree. Both of them are going to borrow substantially ALL of that amount. How long till they have a positive net worth? They are not isolated cases. Or look at my home town. More than HALF of it's residents are functionally illiterate. The literacy rate is now LOWER than it was 50, 75, 100 years ago... We don't need anymore education! I would argue that we need LESS education, but of a better quality. Most schools have no financial/economics training. Is it a wonder people don't know how to balance a check book, or understand saving/investing? How many of today's jobs could be performed by someone who got a VERY SOLID 8th grade education (think from the 1940's) and then a month of on the job training? Quite a few...

Hey all: Does anybody here use/try the website "Lumosity". I have done it after my morning workout. It seems to be beneficial. Evidently, the short games stimulate your mind. It is pitched as a workout for your brain. Any thoughts/opinions?

I would rather be lucky than good!

I probably would not do this... I most DEFINITELY would not pile it all into one single stock. With that being said, If you can borrow against the house at 3% and deduct the interest, I think you could DEFINITELY make a higher return than that in dividend paying stocks. Is it worth the risk to pick up 2% or so? I doubt it...especially if you are married. Try explaining to your wife that you are borrowing against the house to get extra income. Of course, if I were doing it, I would be tempted to get the 20% dividend on Awilco drilling and a basket of others. Borrow money at 3%, get 10% + maybe capital appreciation...tempting for sure.

rkbabang: Wish you were elected to government in Michigan! They need some fresh thinking like yours to get things moving again and move the state back to prosperity. Yes, the local government has been corrupted in many different ways...They have set up speed traps and other revenue enhancing measures through the local constabulary. It is shocking how much revenue the city raises through this. Of course, the police & judges have to protect their pensions. I also very much appreciate your sound advice and did not mean anything by the cheapskate comment. You are correct that I should not get too hung up on the taxes IF I think I can ramp up the business. If I am correct on the potential of the business, the cost of the building will be relatively insignificant. Perhaps if I do the deal, I will start a new thread on buying/building the business. I am sure to have many interesting stories to tell! Thanks

Hey all: I don't think that income inequality is quite such a problem... A big problem is people not being able to get ahead/better themselves in society. This has been brought about in part due to the break down in the education system. A lot of younger folks are getting out of school with bleak employment prospects and mountains of debt. For a good example of this, see the thread I started called "For Love or Money". It is the mountain of debt that is a game changer. I think most people don't have any problem with somebody being well off, or even very rich. It is when they can't live a life even remotely similar to what they had envisioned for themselves through education and hard work. Combine that with a feeling that they were cheated or taken advantage of, and that creates a real possibility for change!

Please don't think I am "cheap skate" who wants to skip out on taxes. Certainly all productive members of society need to pay taxes. No doubt. What I am railing against is that it needs to be in proportion to the value of the property. What is going on in Michigan, specifically the Detroit area, is that property values have fallen tremendously. Property taxes have not come down proportionally. Not even close. If you have a $50k asset that is being taxed at 8%, how do you realistically make a return on your investment? You are going to have other fees too, insurance, utilities, and so on. So now in order to make a 10%+ return, you are going to have to get 30% gross revenue from the asset? LOL at that happening. What about even making a positive return? That might not even be POSSIBLE if taxes & insurance are 14% of the value of the asset? This then becomes a death spiral. The local municipality wants $, is starved for cash. They look to the property owners to come up with it. A lot of them can't. They simply stop paying. This is an epidemic in Detroit. By some estimates, 55% of property in Detroit is at least 12 months behind (or more) on property taxes. Owners figure I'll stay in my house or run my business as long as I can hang on. If they foreclose, I'll shut down or move... I suspect that is what is happening in this suburb. That happened with this property already. The previous owner simply stopped paying taxes and walked away. Tenants are difficult to come by. If you can find them, they won't pay a lot of rent. There are many different places they can go... The only way this purchase makes sense is if I take the plunge and operate & expand the business and perhaps even put in a second business. I hope that government leaders can get some "economic sense" and realize what is happening to their economic base...Not too hopeful on that though...

Hey all: Looks like I made a mistake in my calculations.... The REAL property tax is very close to $4k a year, not $3k. The property is actually two lots, not one. Who is to say taxes won't increase in the near future? Michigan really needs to get this worked out. Who is going to invest capital with tax rates like this?

I am buying NevSun (NSU). I think it is drastically undervalued, and will post excellent earnings these next few quarters. I am also attempting to get more junior miners that are producing, cash flow positive, have net earnings and little to no debt. Bargains are few & far between, but there are some to be had!

As an American investor, a dozen "Chinese" investments over the course of 20 years may be enough to provide diversification & "juice" my portfolio. If something is too difficult, take a pass. If I don't like the "cut of their jib", I'll take a pass...I can look at 100 Chinese prospects and choose one. An American investor has the advantage of being able to spread capital easily through many different countries. For example, I have companies that are heavily concentrated in the USA, Canada, UK, Norway, China, Macau, Congo, Chile, Eritrea, Zimbabwe, Mexico, Greece, South Africa. I have also diversified to real estate, and physical possession of precious metals. So being based in N. America is certainly an advantage!

That rumor has been going around for quite a while... I have NO DOUBT that it is partially true... HOWEVER, I have heard accounts where there THREE people playing behind each seated person at a Baccarat table. I also have played poker...and I hate to generalize, but folks of Chinese & Vietnamese descent seem to have a cultural propensity to gamble. I'm not talking about a putting a $100 bill in a slot machine for a lark either...I'm talking about serious, big money gambling. So I have no doubt at all that Macau will do several times what Vegas does. Not a doubt in my mind. I just hope to be able to profit from it long term!

Another bitcoin exchange just closed it's doors. Apparently somebody stole every bitcoin at the "Flexcoin" exchange. Effective immediately, they are closing their doors. If every coin has a custody chain, can't stolen coins be cancelled? Or at the very least point out who stole them?

The business is being provided for free, but not the inventory. All the fixtures are included, and goodwill is included. I have some of my own inventory, but would need to purchase more. I would actually probably buy a significant amount more, as I would try and sell lower end items and supplies & consumables. That is good for local sales I would think. There is also the possibility for another smaller retail business. I was thinking of first trying to rent it out. If I get a tenant, that is great...if not, I have plans for a second business that is totally unrelated. If I do buy the building/business, I would focus on the existing business, get that going strong and then open the second business. There is another building sitting vacant next door that is also intriguing. An absentee owner bought it, fixed it up, and then made material improvements for the business he wished to put in. He spent a lot of money on infrastructure and then ran out of capital. It has been sitting for some amount of time. I would love to buy it for a huge discount, and then finish it out. I actually think it would be an EXCELLENT business for that neighborhood. If I owned BOTH buildings and was running/owing 3 different businesses, that would be pretty wild. I could work 14 hour days every day. Take the cash flow and start really accumulating significant stakes in micro-cap companies... First things first though...

I own a business that is the same as the one my friend is selling...I am one of his best customers in fact...At this point in time, it provides me with a good secondary income. Definitely not enough to live off of, but a good supplement. If I devoted more time there is not a doubt in my mind I would make more $ doing it. His business is marginally profitable, and it is definitely growing. He has a base of customers that is growing. His profitability though is based on the fact that he OWNS the building and keeps his expenses low. It is hard to say how much the rent equivalent would be for the business. I think it would most certainly be $700, but is hard to say. I think I could definitely grow his existing business, increasing sales & profitability. How would I do it? A). I would invest some moderate $ in spiffing up the showroom. New carpeting, better lighting, better security, broader product. Put in some creature comforts... B). My friend is "older" and has no internet presence. I sell quite a bit over the internet, and this would actually be my growth avenue. People come in selling items from time to time. I can sell EVERY ITEM that he purchases within 5 business days. I am competing with other buyers for his supply...now I would get it all. C). He has no website. That will change... D). He spends literally NOTHING on advertising. His advertising consists of turning on the "OPEN" neon sign... E). He does not go to ANY trade shows. I would change that and go maybe 6 times a year... F). He is closed on the busiest sales day of the week. G). He opens relatively late in the AM, I would open earlier. So there are lots of relatively easy improvements that can be made to drive sales & profitability. The location would NOT be my first choice, but it would not be my last choice either. I found his store simply by driving by and walking in. There is a good amount of traffic. It is not a main road, but a larger secondary road. It has close access to 2 major freeways. That is the reason one tenant rents from him. I don't think banks write mortgages for the type of money we are talking about...This is literally the price of a lower end luxury car. I have capital (and access to more) to fully fund the purchase. I would prefer for him to carry a note, maybe 50%of the purchase price to be paid over a few years...] He has also agreed to stay on for a while part time to educate me in some areas I am weak on AND to make sure customers stay. The viability of the business will be the driving factor, and the real estate is the kicker. Thanks for all the advice guys, I very much value it.

A good question! I would avoid almost any reverse merger company... NTE is listed on NYSE, and has a long, LONG history. They have paid out MORE in dividends than they have originally raised in capital. DSWL I've known about since the late 90's and was one time affiliated with NTE. They have paid SIGNIFICANT amounts of dividends. Emperor Entertainment is listed on the Hong Kong exchange which has high listing standards. It has also paid significant amounts of dividends. Basically, I would look for several things. A). Long trading history B). Long history of paying significant dividends C). Audited by "big name" accounting firm D). Not a reverse merger E). Diversified base of customers, especially larger, Western ones. F). Easily verified products, i.e. we run a casino, we build screens for Apple, we build secondary print trays for HP printers. Not we run advertising on the side of buses, or we sell vitamin supplements to Mom & Pop retailers in Harbin. G). Not raising capital in the equity markets H). Simple capital structures. Lots of hanky panky occurs with debt. Look for companies running simple businesses. I). Only buy into companies selling at significant discounts and compelling valuations. I think A & B and G & H are the most important factors to consider. Firms that have been around for a while, and have paid out significant dividends over time and are not raising capital are almost certainly NOT frauds. Firms with clean, simple, conservative capital structures reduce the opportunity for fraud. Also, if something seems to good to be true, simply let it pass. For a while, there were some reverse Chinese mergers trading for a P/E of one and less than cash...most of these went belly up... I think there are bargains to be had....Good luck! Of course, anything is possible.

Hey all: Does anybody know approximately what percentage of Bitcoins were stolen from Mt. Gox? If there are $4 billion of bit coins, then about 10% of the market cap was stolen.... Secondly, it appears it was shoddy accounting/control standards at Mt. Gox, and not an inherent defect in Bitcoins that allowed them to get stolen. Any way you slice it, this is a terrible setback for Bitcoins.