forestry investment funds

Joseph Zorzin redoak at forestmeister.com
Thu Oct 16 14:24:48 EST 1997


Jostnix wrote:
> 
> >Is that kind of return really possible when you factor in all the costs
> >of holding the land? Or is the investment being made on the speculation
> >that the land value will rise?
> 
> OK, Forestmeister,
> 
> You need two things. 1) a financial calculator (ever heard of one:?) and
> 2) a book called Basic Concepts in Forest Valuation and Investment Analysis
> by Bullard and Straka. Then you have to know how to use the calculator and
> be able to read.

Well, I forgot to mention I only made it to the third grade. But I'm
just impressed that your timber stands grow value that quickly.

> 
> Next, you hire a smart forester (that's the catch:>) or group of same to
> find high site index land with optimum reproduction of a good species or
> presently growing good timber.  Again, that smart forester can do that by
> actually getting in a truck or Mercedes M-Class (if he is doing a good job)
> and purchasing these properties in bulk...to include corporate takovers and
> poorly managed family estates.  You have to have a lot of land...not a
> yankee woodlot.
> 
> Then the investment company sees you making them money and pays you a lot
> of money to buy more good timber and land.  You do so, create a cash flow,
> show a profit after tax and this is called capitalism.

Oh, I think I've hear of that. Some German guy wrote book on it called
Das Kapital.

> 
> And this money can be made without selling any land.  It is done by using
> something call forest management with significant help from hunting rights
> (usually pays taxes in South). This is an added incentive to hire a
> wildlife biologist on bigger holdings.  The multiple-use thing that is a
> bad word these days overrides ecosystem management but strangely enough
> works just as well...and for a profit, praise the world.

Hmmmm.... really good multiple-use is ecosystem management and
vice-versa. Off to the Smokies for foliage! Have a good one.

> 
> Joseph, you can make money growing trees.  More foresters need to believe
> this.  The Preach'n is done<grin>. Im off to the Smokies to see the leaves
> and will not see you response through the weekend (tag, your it).
> 

Well here, you wouldn't be able to to fully amortise the property cost
against timber value growth as it kills the forestry investment equation
until you factor in the much greater real estate value appreciation and
tax advantages. Here forestry is the frosting on the cake. But then
again, I only made to third grade. <G>

-- 
http://forestmeister.com
"The ONLY forester's web page in the otherwise sophisticated state of
Massachusetts".



More information about the Ag-forst mailing list