Given that the rental market is the primary "business" concept that is driving the real estate bubble -- and not the lack of land as the builders would have us believe -- then "average rental yield" is an important part of the discussion, but one that is almost absent in the media.

It seems to me that too many real estate "investors" are focused only on top line growth, i.e., price appreciation, rather than return on capital invested. I attribute that phenomenon to media hype as well as lack of understanding by many of those who trade in real estate.

I venture a guess that the average ROCI of the Cara Global Best 100 Companies is 25 pct per year. So, at the end of the day, investing in those companies over 20 and 30 years is going to produce greater returns than residential real estate.

The problem as I see it with real estate investing is that one has to be in the real estate business to know where the best values lie, and to be able to avoid some of the transaction costs, which are extremely high. But when trading securities, one only needs a certain level of self-discipline to avoid the "stories" sold to them by Wall Street (and the complicit media), and stick to a very few proven portfolio management strategies and tactics directed to a relatively few well-managed companies.

Over the long run (say 20 to 30 years), I challenge any real estate investor to try to prove that real estate, as an investment (and not as a home), is superior to equity securities as an investment.

If the all-in costs of holding real estate and trading real estate were far less, and there was a liquid market, then, and only then, would there be a worthy discussion.

I surmise that the concept of real estate as an investment is so appealing to people for other reasons, but that discussion is for another day.

And, by the way, at least one of those residential home builders -- Toll Brothers (NYSE: TOL) is on my list of the best managed companies in the world. I challenge anybody to show me where real estate has appreciated more than TOL in the past 15 years.