DEBATE OF '98- financial resources

Joseph Zorzin redoak at forestmeister.com
Thu Apr 23 03:46:23 EST 1998


KMorrisD wrote:
> 
> Joe and Group,
> 
> I've done some work in southern Berkshire County, so I know what you're talking
> about when you say that woodland for these landowners is just another asset in
> their portfolios.  You have a lot of very wealthy, second home New York City
> people.  But if they have money, they probably understand stock investment
> analysis.  Therefore they should be able to understand forest investment
> analysis.  The problem is no one is telling them that timber is a worthwhile
> investment.  You just have to go out there and do a little missionary work,
> Joe. <G>

The problem with emphasizing the investment angle (not to say that I
don't bring it up) is that the wealthy folks know a LOT about investment
analysis. They might reply, "but how liquid is the investment?". In many
cases, it has very little liquidity. If the forest is mostly young, they
might have no way to see that 10-15% yield for decades. Their next
question might be, "what is the risk factor?". And the answer is that
storms and disease could ruin it. With high risk and low liquidity- any
investment that's actually growing 10-15% isn't really worth that much
to the "wise" investor. If they have been investing in the stock market
the past 10 years they would have seen at least that kind of investment
with high liquidity and low risk. So, although we need to tell
landowners that their forest is a growing investment, I don't care to
overemphasize this as the reason to get involved. I usually emphasize
the tax savings which are NOW, not in 30 years and in my experience,
that lights'em up. And if there is a timber sale in the short term which
is worth a few tens of thousands of dollars, they really start to glow.

When I was a neophyte forester I'd always talk about Thoreau and mother
nature, and I found that landowners DON'T want to hear about mother
nature.

So I see the problem of forestry (private land) around here not just the
fact that consultants and burros are insufficiently able to discuss the
growth of the forest. When you're wealthy like most landowners around
you often just don't care to be bothered. You buy you country house and
forest to get away from the big city and away form those hawking deals.
Actually, regarding the burros, I don't think the burros tell landowners
anything. In 25 years I've NEVER gotten a referral from a burro. Never
has a landowner called me up saying, "I just had a fabulous talk with
the service forester (or extension forester) and he convinced me how
great forestry is and he gave me a list of consultants." That's batting
zero for 25 years. Ya wonder where I get my attitude? <G>

> 
> I saw the article in the latest Journal of Forestry by Dave Kitttredge and
> others about ecosystem management and landowner objectives in Franklin County,
> MA.  According to the survey, everyone cares about recreation and aesthetics,
> and not about investment.  But I wonder how they would have responded if they
> knew they could be--or are already--earning 10-15%.  It's a certainty that the
> interviewers didn't tell them that, and another certainty that they didn't hear
> it from their service forester--and probably not their consulting forester (if
> they have one).

I seriously doubt that Kittredge and the other burros have the slightest
hint as to what landowners are all about. They give speeches to
landowners and once every 20 years they send out a little questionnaire.
We consultants WORK with landowners- go to their houses- walk around
with them for hours- negotiate with them on all kinds of projects. If
Kittredge and the other burros don't ask me MY opinion of what makes
landowners tick, I have ZERO respect for their conclusions. As I've said
here a million times, all the burros are just PARASITES. They contribute
nothing. I'm still waiting for them to disagree and prove that I'm
wrong. They don't take up the challenge, because I could PROVE that THEY
are wrong.

> 
> So a good investment isn't a choice that landowners even know they have--at
> least not in Massachusetts.  I'd be curious to hear from some of the
> consultants and landowners in other states what their service and extension
> foresters are telling landowners about rates of return.  I'd also be curious to
> know what you consultants are telling your clients in other states.  And what
> are they and you saying about the difference between managed and unmanaged?
> How much of a difference does it make in rate of return?
> 
> Karl Davies

I worked WITH the service foresters for 2 years in the '70's under the
old gov. CETA program. My experience with them is that they NEVER reach
out to forest owners who DON'T call them up- which is rare. If a
landowner calls them up, they already have a certain question they want
answered. Usually the question is, "a logger called me up and said my
timber is worth a million bucks from a nice selective harvest, should I
let the logger manage my timber?". Then the service forester might
possibly try to persuade the landowner NOT to sell to the logger, and
hire a consultant, but they'll do this very gingerly so the landowner
won't go back to the logger and imply the state guy said something
negative about him or all hell will break lose- because the logger will
call up the service forester's boss! What I talk about in this message
is the REALITY of forestry as I see it- not the ILLUSION of forestry as
written about the some journal by someone who never managed an acre of
forest and never actually went out in the REAL WORLD and did BUSINESS
with a real live human being, rather than spend a million hours at
meetings acting important. The burros need a reality check, and they
aren't getting it.

-- 
-----------------------------------
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sophisticated state of Massachusetts"

"In wilderness is the preservation of the world."
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