KJP

Before discussing whether they make sense, it would be helpful to know what you want to use these "rules of thumb" for.

All return related threads have a very healthy amount of survivorship bias. It would be very interesting to know whether the answers to your questions from the people who managed to earn 30+% CAGR over 10 years are actually any different than the answers of the people who had terrible returns for three years and then gave up, e.g., both groups used leverage or invested heavily in levered equities or both groups at least intended to invest in long-term compounders. The winners are generally happy to talk; I don't know how to track down the other group.

Hong Kong is still available through Fidelity, right?

I suspect some posters may have regulatory issues (or issues with their compliance officers) regarding anything that could be considered client solicitation (or posting returns, for that matter). If there are posters whose research/posts have impressed you, you can private message them and ask. If they are looking for clients, you'll get a quick response.

Why do you say so? How do they compare with Shenzhou/Eclat/Hansae/Youngone in terms of valuation and growth? I think the historical results tell the story here, once you account for the noise created by fluctuations in cotton prices. The Red Corner blog has a series of posts (and comments thereto) about Texhong, its business model and management. If I had to sum up the many thousands of words in those materials, it would be the following quote, which I've lifted from a comment to one of the posts on that blog: I am suggesting that Texhong has important unit cost advantages in yarns and that it therefore enjoys important competitive advantages notwithstanding the fact that he product that it sells is a commodity. You can look at Texhong's annual reports for 2006 and 2014 and contrast the following: General & Administrative costs per metric tonne of yarn Selling expense per MT of yarn (Selling expense = Selling & Distribution minus Transport) The unit cost DECLINE in these two line items between these two years should sum to approximately 1450 yuan per MT. 1450/MT is 6% of the LT average selling price of yarn (24,000 RMB/MT). So a 4.5% operating margin in 2006 becomes, because of scale/scope economies, a 10.5% margin. At constant asset turnover of 1.8x, Texhong's ROIC morphs from (1.8 x 4.5%) = 8% to (1.8 x 10.5%) = 19% At debt/equity of 50%, ROE improves from 16% to 38% Is it sustainable? Well the source is unit cost advantage. Yarn producers and yarn buyers are all price takers so global yarn prices -- and the therefore the prices at which Texhong sells its yarn -- do not go down just because Texhong improved its cost structure. What will happen when it is selling a million MT of yarn? How wide will the gap be then between Texhong and the 98,000 other yarn manufacturers in the PRC? **** Regarding the other companies you mentioned, are they actually comparable? Texhong makes yarn. Is Shenzou, for example, a yarn manufacturer, or is it further downstream (fabrics and garments)?

Thanks EDIT: The nonamestocks blog posts are quite useful. Thanks again for the pointer.

Do either of these have public financials?

~22% in USD, pre-tax

There's a timing mismatch. The posts from the 2016 thread are nearly all from the two-week period before and after New Years. So, it's really a thread about the best ideas at that time. The 2016 results thread, however, reflects investment decisions made throughout the year, rather than a portfolio fixed as of mid-January 2016.

Texhong Textiles

Cambium Learning Group

In an earlier thread that I can no longer find, the issue of whether insider trading required a breach of duty was discussed. As several commentors mentioned, the Supreme Court had a case on its docket that involved the legal standard for determining whether a breach of duty had occurred in the context of "gifts" of inside information to friends and relatives. Two days ago, the Supreme Court decided that case. For those interested, the decision can be found here: https://www.supremecourt.gov/opinions/16pdf/15-628_m6ho.pdf

Someone on Reddit Security Analysis thread collects them every quarter. There's already 40 or so posted for Q3 2016.

The companies discussed in this blog post may interest you: http://www.nonamestocks.com/2016/11/comx-and-sima-updated-numbers.html

Portfolio is long only. The following are each ~ 7% - 12% positions depending on the day, and total about ~70% of my portfolio: Gaia (GAIA) Rentech (RTK) Howard Hughes (HHC) Black Diamond (BDE) Texhong Textiles (HK:2678) Flybe (LN: FLYB) Dream Office (D.UN; DRETF) Smaller positions, some of which are in the process of being sold off: Advant-E (ADVC) PD-RX Pharmaceuticals (PDRX) Fortune Industries (FDVF) [About to be cashed out in short-form merger] IDW Media Holdings (IDWM) Parkit Enterprises (PKT; PKETF) Xpel Technologies (XPLT) Macro Enterprises (MCR) Judges Scientific (LN:JDG) QVC (QVCA) Keck Seng (HK:0184)

This is not correct. See Chiarella v. United States, 445 U.S. 222 (1980); United States v. O'Hagan, 521 U.S. 642 (1997). If you have authority for the proposition that a breach of duty and personal benefit (the quid pro quo Roark referred to) are not required, I'd be interested to see it. EDIT: I should mention that what you describe is the prudent way to act, regardless of what the technical nuances of insider trading law may be.

It's quite charitable to assume that this type of behavior only occurred "right at the end."

The SEC only has civil enforcement powers, meaning fines, disgorgement and injunctive relief, e.g., director-officer bars. It does not have criminal enforcement powers and cannot put people in jail. A criminal prosecution would be brought by the DOJ or a U.S. Attorney, or, in theory, a state prosecutor. It remains to be seen whether a criminal indictment is coming.

https://www.sec.gov/news/pressrelease/2016-189.html

That's it in a nutshell. If you prefer 200 pages on this issue, take a look at McKinsey's Valuation treatise, which explains (and provides the math behind) the links between ROIC, growth rates and valuation ratios.

I interpret your comment as saying that an unruly mob of leftists used illegitmate methods -- demagoguery (they're "Nazis"!) -- to try to silence Eric. I participated in that thread, and what I recall is Eric using the following terms to describe the people who disagreed with him: "Idiotic" (post #61), "moron" (post #74), "deranged" (post #92), "depressed" (post #92), "not healthy" (post #94), "bitch" (post #97), "tool" (post #100). I don't recall anyone debating him who used even a single epithet in response. I also don't recall anyone besides Eric invoking misogynistic rhetoric, like analogizing people who disagree with to troublesome "old girlfriend" and calling them a "bitch". But I also acknowledge that I'm not the best judge of the legitimacy of my own methods of presenting an argument. So, I'd like to know (i) what makes the rhetoric and methods of argument that Eric employed on that thread legitimate, and (i) what in the rhetoric and methods of argument employed by the people debating him showed them to be "Nazis"?

It's right there in post #66: "So some taxes are in a bubble -- so fucking shoot me for pointing to the unfairness of that" Let's be honest: You just want to pay less taxes and don't care about much else. I was foolish for thinking you actually cared about the facts or the issues involved in tax policy, and doubly foolish for thinking that we could have a useful discussion. Shame on me. I'm done.

Thing is, hardly anyone who claims to care about the very poor call for a wealth tax. I haven't heard Buffett call for a wealth tax. So he must not be standing up for them either? Buffett earns income from two sources: 1) His $100,000 salary 2) Roughly 1% of his net worth is in a trading account where it is earning capital gains, interest income and dividends. So like, he's a smart guy. He knows that raising the tax rate even to 100% just isn't going to make a damn bit of difference to him. It only raises the tax rate on 1% of his net worth! He knows this of course, but he doesn't go around advocating for a wealth tax, which is really the only way to shake loose his money. Sure he is pledging to give it all way. He can still do that with what's left and yet ease the tax burden on his poor secretary by advocating for a wealth tax. But maybe, just maybe, he thinks a wealth tax is not a good thing to have. I just honestly really don't know. But don't make insinuations that a wealth tax is something that people must advocate for in order to have a conscience. Getting pretty tired of this. I say that 60% is high for a particular asset. I stand by that point. In this thread, you've advocated for: 1) giving bondholders a new tax deduction for the effects of inflation; 2) largely abolishing property taxes; and 3) raising sales taxes Those are highly regressive policies that will lower the tax burden on the wealthy and increase the tax burdens on the poor. That's what you're advocating for. That may be uncomfortable for you to hear, but that doesn't make it less true.

Yes, because sales taxes are more regressive than property taxes. See here: http://www.itep.org/whopays/full_report.php What's the data supporting your view? As I stated earlier, there are ways to deal with this issue within the property tax system. Why not address that, rather than create straw men? Also, there are tens of millions of people who own no property at all and are among the very poorest and most vulnerable in our society. Why won't you stand up for them by calling for a wealth tax? Are they invisible to you, or do you just not care about them? Australia funds police and schools at the federal and state/territory level. The US funds those activities primarily at the local level. That is why your proposal does not work in, to use your phrase, "the real world." Why don't you spend time understanding the differences between Australian and US government. I'm glad you now realize that you've shifted to arguing for something that has nothing to do with the purported unfairness you originally highlighted and have now, wisely, abandoned.

I suspect that would shift a substantial amount of the tax burden from the wealthy to the middle class and the poor. I think that's a relevant consideration when discussing the fairness of a tax system. In addition, property taxes typically fund local government, while sales taxes typically are collected by states and the federal government. How would you fund local government, i.e., schools, fire departments, police, etc.? Instituting a local sales tax would not work because many localities don't have enough sales locally, e.g., primarily residential suburbs. Finally, this would do nothing to help the person in your initial hypo, because she's paying "high" taxes on an investment property, rather than her "primary residence."