KJP

In the hypothetical you started with, I'd suggest renting rather than buying. You also started with the hypothetical of an investment property, which should, I think, be judged by the standards of an investment, which includes considering the after-tax yield you are going to get from it before investing. If you're actually concerned about something else -- such as the effect that rising property values and property taxes can have on long-time homeowners -- then that's a different issue that can be addressed, at least in part, through tweaks in the property tax system, e.g., homestead exemptions. I'm sure you know that -- and I'm sure you know you're constantly shifting the basis of your position, which makes it difficult to have a coherent discussion -- but I'll do you the courtesy of not calling you an idiot or a moron, like you have done elsewhere in this thread. You're correct that property taxes can be regressive. And you're correct that property taxes can evolve in ways that hurt some people, particularly the elderly and the disabled. There's plenty of room for intelligent discussion about an alternative tax system that could be better. I hope that's where you're going, because it isn't where you started.

You chose to buy a million dollar house (perhaps buying into a bubble) knowing what the property taxes were, and now you complain that you aren't making enough money and that the tax is "unfair"? That's rich (pun intended). Also, who again are the "people who otherwise pay little tax are paying a very high property tax"? Who exactly are the penniless who have million dollar houses? You've already been bailed out by rock bottom interest rates; there's nothing fair or reasonable about millionaires being given another tax cut (funding by cuts to government services for the poor most likely) to bail them out of bad property investments.

And you are in fact making the point that the taxes are too high relative to the underlying economic value. If the housing were priced closer to intrinsic value (you argue the prices are high), then the tax would be more fair. One of the problems with this sort of taxation scheme is that it causes local municipalities distress when asset values collapse. And it makes them spend unsustainably when they inflate (and later collapse). It drives boom/bust cycles in local tax revenues. It made the economic pain from the housing bust far worse, because it meant a cutback in spending as tax revenues plunged. I don't find it wise to tax the bubble value of an asset. Causes a tax revenue problem if the air drops out of the market. Rather, if they would just tax the rent only and leave it at that, it would keep the taxation more focused on the intrinsic value of the asset, which seems wholly fair and reasonable. What does "tax the rent only" mean for people who live in their houses, rather than rent them?

Of course it doesn't apply. I mentioned that real estate is a very common investment for people. "Common" Americans typical trust it more than stocks and bonds. So then I get some side show argument back that my example used an expensive piece of real estate and that common Americans don't have that much money. You just can't win -- people will not address your message if they can attack you on a detail. So I changed that detail to suit their objection. The detail was unimportant. I was also rebuffed on the ground that I can't make a generalization out of a specific. Which of course I wasn't doing, because I said that taxes were actually high for some assets. I didn't say for all assets (generalization), I was very clear for some. I don't think people realize that they are high for some -- property taxes are relatively obvious. They are easy to see. So I wanted to find an example of a high tax on an asset where optically the tax rate looks a lot lower than it really is. The best example I could think of was the taxation of bonds, where the inflation rate affects the level of real taxation. And you can easily get to real tax rates in excess of 100%. Arguing that only the nominal tax rate matters is IDIOTIC folks! You guys don't argue that only nominal gains matter in the stock market, so adopt a little bit of intellectual honesty and just concede the point that the only rate that matters in both taxation and investment returns is the REAL rate -- be consistent and don't let politics sway you. That's a nice screed, but people have been trying to explain that what you call "high" effective tax rates are caused by a very high purchase price relative to revenue, which is causing property taxes (which are a function of market values) to be a very high percentage of income. If you buy a house for $1,000,000 and rent it for $40,000 per year, you're correct that your overall tax burden will be a very high percentage of your income. That's just math. But you appear to be going further and suggesting that the high relative tax burden in this scenario is actually a problem (and perhaps suggesting it is unfair). I don't think your conclusion follows from the math. If I'm wrong and you're just highlighting the math, then there's nothing really to discuss. But if you are in fact going further and suggesting it's a problem, then you actually need to deal with the response that the tax burden you highlight is driven by the sky high purchase price (and rock bottom cap rate) you're hypothesizing. I think the facts are clear on the assets, net worth and investments of "ordinary" and "common" Americans. I don't believe it can be disputed that the tax change you propose would be a tax cut for the wealthier than average, because they are the only ones who have any significant investments. Everyone reading this has to come to their own conclusion about whether that fact is relevant to them.

I still don't understand who are the "ordinary Americans" in the "0% tax bracket actually paying a 60% tax rate." Median family wealth in the US is about $80,000, including all forms of wealth such as retirement plans and equity in your primary residence. (http://money.cnn.com/2015/07/27/news/economy/wealth-diverse/). The "ordinary American" does not own an investment property or anything close to it.

You also referred to bond income to which your property tax point doesn't apply. As for the property tax, I agree it's a tax. I don't know how else to describe it. But isn't your argument driven by the low cap rate in your hypo? For example, let's assume (i) property taxes are 1% of market value, (ii) you spend 1% of market value per year for a maintenance (I assume this is tax deductible); (iii) market value of the house (and your purchase price) is $100,000; (iv) you borrow 75% of purchase cost at 5%; (v) you get rent of $20,000 per year; and (vi) your income tax rate on this income is 40%. I'm not a real estate expert, but your annual cash flow should look something like this: Revenue: $20k Prop Tax: ($1k) Maintenance: ($1k) EBITDA: $18k Depreciation: (~$3k) Interest: (3750) EBIT: 11250 Income Tax: (4500) Net Income: 6750 Cash Flow: 9750 Post-Tax Cash Yield on Equity: 39% I realize you can't buy real estate today and get returns like this, but I'm attempting to illustrate the point that your argument appears to be driven by the low cap rates in your hypo.

"Ordinary Americans" have barely any investments; they certainly don't buy $1,000,000 investment properties at 4% cap rates. Your position seems to be that tax rates on investment assets, i.e., the tax rates that rich people pay, should be cut to protect the rich from current low yields, even though the rich have already benefited from the rise in asset prices that occurred as yields plummeted. What would be the policy justification for cutting taxes as you suggest? And who would pay more to make up for the lower taxes that asset owners would pay?

Fortune Industries (FDVF) Quorum Information Technologies (QIS) IDW Media Holdings (IDWM) Black Diamond, Inc. (BDE) Rentech (RTK) ELXSI (ELXS) Tower Properties (TPRP) Judges Scientific (JDG) PD RX Pharmaceuticals (PDRX)

For at least the last decade, Old Dominion Freight Lines has earned ~30% pre-tax returns on incremental invested capital, while reinvesting nearly all of its earnings. It has been able to achieve those returns because it is well-managed and operates in an industry with significant local economies of scale (route density). It's currently trading at 16x earnings, but you'll have to determine whether trailing earnings represent a cyclical peak. Whether the next decade will be as good as the last one likely depends on whether it can continue to take market share. In addition, run-rate margins are beginning to approach incremental margins, so investors cannot expect to enjoy the same benefits from operating leverage as they did during the last decade.

It also works for companies that file their disclosures with OTC Markets, even if they do not file with the SEC.

The latest issue of Graham & Doddsville has a brief discussion of Canadian real estate and why Home Capital Group is a short. See discussion starting at p. 39: https://www8.gsb.columbia.edu/valueinvesting/sites/valueinvesting/files/Graham%20%20Doddsville_Issue%2027.pdf

Packer, which HK real estate companies are your favorites right now? Any views on Keck Seng? You likely know but CKI.TO owns a lot of Keck Seng. Yep, but at current prices I'd rather own (and do own) Keck Seng directly rather than through Clarke. The undervaluation of Keck Seng is hard for me to understand, even given what appears to be an overpay for the NY hotel, but I'm always looking for reasons why I'm wrong.

Packer, which HK real estate companies are your favorites right now? Any views on Keck Seng?

On the small- to micro-cap side of things, here are a few that may interest you: Texhong Textile (HK:2678) IDW Media (IDWM) Advant-E (ADVC) Judges Scientific (LN:JDG) Quorum Information Systems (QIS) Singapore Shipping (SGX:S19) DHX Media (DHXM) Sirius XM Canada (XSR) Videocon (VDTH) [look carefully at the corporate governance for this one]

Another good point about focusing only on upside.

Agree: Concentrated investments in names that were both levered and very popular with hedge funds.

Many (most?) of his investments were also highly levered.

What did this guy in was that it looks like he overconcentrated his ptf in energy. The guy grew up in an environment where China binged on capex & commodities fuelling the commodities supercycle, whilst at the same time rates were dropping for 3 decades. Both cycles are turning the other way (though the rates side of it is debatable), and this guy picked that exact moment to go long commodity stocks. I don't think it's that simple. He also has extensive write ups of Hertz and VRX, among others. What I found useful was asking myself whether I would have come to a different conclusion about those companies at the time and, if not, what that says about the types of opportunities I should be considering.

The blogger at 17 Mile is shutting down his blog due to, among other things, the collapse of his strategy. His last post is a very candid assessment of his performance, strategy and current abilities. I found the post-mortem, along with a review of his prior investment theses (mostly well known names), helpful in reminding me about my own limitations as an individual investor, concentration/diversification, and what types of investments I should be considering versus putting in the too-hard/too-levered pile. In case anyone else find's it useful, here's a link: http://seventeenmile.com/

Karelia Tobacco

I agree with this and think it applies to most people, including me 20 years ago. (See the post about bias.) Many of the posts in this thread talk about what someone could do without going to college. But realistically most people would never do those things on their own. Also, nearly everyone I know loved their time in college, and I suspect it bettered their lives in many ways. Is that worth $150,000 in debt? I doubt it. But I think the experience is worth something. An earlier comment also cautioned against "high end" schools. I disagree with that as well. Being around thousands of very smart people your age when you're 18-22 is invaluable. Plus, most "high end" schools offer generous financial aid, so very few have to pay full price to attend.

I don't mind not having quarterly reports, but I do think the lack of any public annual financials is a problem. Without them, how are there going to be new buyers for your shares? It seems like a recipe for chronic undervaluation and, ultimately, a takeunder. I want to qualify all of this by acknowledging that I haven't seen any empirical analysis of this issue and would be interested if anyone has seen any analysis of, for example, P/E or EV/EBIT multiples for fully dark companies relative to similar public companies.

Has the company made any public disclosures since going dark? It doesn't appear that they're going to provide shareholders with quarterly reports. Are they going to provide annual audited financials? The 8-K announcing the decision to go dark is equivocal on that point.

i started looking at videocon d2h, it reported decent metrics but the stock did not react as positively as I would have imagined Agreed. I also thought guidance was really strong. There might be macro/India fear involved? Do you have any background on the Dhoots and their treatment of minority shareholders? I've only heard an unflattering whisper or two, but don't have any firsthand knowledge.

Look forward to seeing it.