Author Topic: Wood as a tangible investment vehicle  (Read 10148 times)

StarswirlTheMustached

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Wood as a tangible investment vehicle
« on: July 08, 2013, 11:10:43 AM »
It's solid. Stored well, it doesn't depreciate. It doesn't need to be put in a safe, like gold, because its value is largely unappreciated. What is it?
Exotic hardwood.

The fellow in the article above describes trying to source lingnum vitae to replace stock he'd used, and finding it had quadrupled in price since 2005. If he'd been holding it to sell, he'd have gotten a pretty good return!

You'd have to know wood very well to trade in it, or even to simply buy and hold for personal use as an inflation hedge, if you're a carpenter who likes to use these fancy woods. If you are the master carpenter type, like the fellow whose article I linked, however, this seems like a very good idea. Any thoughts?

simonsez

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Re: Wood as a tangible investment vehicle
« Reply #1 on: July 08, 2013, 12:18:52 PM »
You'd have to know wood very well to trade in it.

So I think you just excluded 99.9% or more of the population, haha.  Wood is neat though.  I myself will probably never get to a point where I would feel comfortable enough to speculate/invest in it directly but I would like to manage side hustle eventually in the form of splitting/seasoning/selling firewood by the load.  It is what my grandpa and great uncle do together two days a week clearing/chain-sawing out other people's brush and they love it.  I've helped them out before and you learn all sorts of things e.g. osage orange, or hedge, has too many BTUs for some stoves/fireplaces to handle (therefore the hedge gets its own separate seasoning pile marked for outdoor burning or cut for fence posts).  This city boy would've never known that otherwise.  Mmm, the smells of the different species.  I can't wait for the fall time and the bonfires that come with it!

Joet

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Re: Wood as a tangible investment vehicle
« Reply #2 on: July 08, 2013, 12:22:43 PM »
huh, interesting. I figure the safe-money is in traditional timber-fields still growing in the ground. Kind of a dual-play on real estate

aclarridge

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Re: Wood as a tangible investment vehicle
« Reply #3 on: July 08, 2013, 01:05:19 PM »
Funny this should come up - I was talking with my Dad last night about a friend of his, who bought something around 100 acres of woodland which is mostly mature redwoods and other hardwood. He was saying it sounded like a great investment, I was a bit skeptical - I don't like investments that tax you just to own them, and I see land values going down in the short term in Canada.

However, harvesting say 50 trees a year or something and replanting could allow for perpetual cash flow from the property, and if it was cost effective to do some of the work yourself to prepare it for sale (no idea what's involved other than just cutting it down, I assume transport at least) then it might work out alright. If anybody knows more about this kind of thing I'm very interested to hear it.

Joet

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Re: Wood as a tangible investment vehicle
« Reply #4 on: July 08, 2013, 01:38:14 PM »
you're kidding right? Basically what loggers do is buy land, rape it completely, then sell it cheaply as "cabin retreat in the woods (or whats left of it).

Of course a managed/demonstration forest is more sustainable. It's mildly profitable. I have some relatives that log 'just enough' from some new england property to pay the annual taxes. Ridiculous when you think about it but there it is.

Spork

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Re: Wood as a tangible investment vehicle
« Reply #5 on: July 08, 2013, 02:05:54 PM »
I might also mention that agricultural land is not taxed at nearly the rate that residential/commercial land is taxed.

I have 7.5 acres.   I acre is homestead, taxed at "normal rates."  The other 6.5: I pay about $25 a year.  It's taxed as "forest products".

StarswirlTheMustached

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Re: Wood as a tangible investment vehicle
« Reply #6 on: July 08, 2013, 03:13:37 PM »
Funny this should come up - I was talking with my Dad last night about a friend of his, who bought something around 100 acres of woodland which is mostly mature redwoods and other hardwood. He was saying it sounded like a great investment, I was a bit skeptical - I don't like investments that tax you just to own them, and I see land values going down in the short term in Canada.

However, harvesting say 50 trees a year or something and replanting could allow for perpetual cash flow from the property, and if it was cost effective to do some of the work yourself to prepare it for sale (no idea what's involved other than just cutting it down, I assume transport at least) then it might work out alright. If anybody knows more about this kind of thing I'm very interested to hear it.

My grandparents and uncle tried this, and it didn't work, but that was with softwood, though. I think it was Tamarack, which you'd probably call a larch: a conifer that isn't an evergreen. Anyway, softwood's too cheap to be worth selling; they just used the timber for free firewood. What they needed to do was cut the trees, clean them off into logs (remove the branches, in other words), and skid them to a convenient spot for pick up. Really, it's nothing you needn't do if you're harvesting for firewood, though I suppose you might want to cut up the logs in situ. (my grandfather always skidded them out into an automated cutter/splitter rube goldberg contraption)

Depending on what they charge in your area, you're likely better off transporting the timber to the mill, or even better, milling the timber yourself. In a rural area, driving around with a mini-mill behind your pickup can be a decent source of side-income in and of itself. (esp. if you convert the pickup to a wood-burner and run off the waste)

willn

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Re: Wood as a tangible investment vehicle
« Reply #7 on: July 08, 2013, 03:22:23 PM »
It's solid. Stored well, it doesn't depreciate. It doesn't need to be put in a safe, like gold, because its value is largely unappreciated. What is it?

Most everyone commenting mentioned it in the agricultural context, I think you're referring to actually storing hardwood lumber to sell to home or furniture builders, so I have a thought or two.  Doesn't really store that well, compared to say, money in a bank account ;).  You need lots of space that has at least some climate control for humidity.  It burns like crazy. You'd want to insure it.  Marketing it would have some not insignificant costs.  Non-hobbyist buyers are looking for possible large quantities.   Hobbyists of course would be on the look out for small quantities, and deals but may not be a very large market.

None of these are insurmountable challenges.  Then, even though some woods have gone up high in price, its still highly speculative and consumers of exotics and hardwoods may be very price sensitive with economic downturns--for example, the yacht industry took a nose dive in 08/09, they use a ton of this stuff.


Spork

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Re: Wood as a tangible investment vehicle
« Reply #8 on: July 08, 2013, 03:39:47 PM »
It's solid. Stored well, it doesn't depreciate. It doesn't need to be put in a safe, like gold, because its value is largely unappreciated. What is it?

Most everyone commenting mentioned it in the agricultural context, I think you're referring to actually storing hardwood lumber to sell to home or furniture builders, so I have a thought or two.  Doesn't really store that well, compared to say, money in a bank account ;).  You need lots of space that has at least some climate control for humidity.  It burns like crazy. You'd want to insure it.  Marketing it would have some not insignificant costs.  Non-hobbyist buyers are looking for possible large quantities.   Hobbyists of course would be on the look out for small quantities, and deals but may not be a very large market.

None of these are insurmountable challenges.  Then, even though some woods have gone up high in price, its still highly speculative and consumers of exotics and hardwoods may be very price sensitive with economic downturns--for example, the yacht industry took a nose dive in 08/09, they use a ton of this stuff.

I sort of thought the same thing.  The reason gold is a good method of storage (and this is clearly debatable, just go with me on this) is because it is a high value item in a small package and is seemingly not very destructible.  Wood seems like the total opposite.

SnackDog

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Re: Wood as a tangible investment vehicle
« Reply #9 on: July 08, 2013, 03:53:17 PM »
Two work mates took a technical analysis course and ended up investing in lumber futures. They lost their shorts!
« Last Edit: July 09, 2013, 04:23:17 PM by SnackDog »

ncornilsen

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Re: Wood as a tangible investment vehicle
« Reply #10 on: July 09, 2013, 12:10:23 PM »
you're kidding right? Basically what loggers do is buy land, rape it completely, then sell it cheaply as "cabin retreat in the woods (or whats left of it).

Of course a managed/demonstration forest is more sustainable. It's mildly profitable. I have some relatives that log 'just enough' from some new england property to pay the annual taxes. Ridiculous when you think about it but there it is.

Before making a fool of yourself, please learn about how forests are actually managed by timber/logging companies. Clear cutting and the kind of trash you see on reality TV is not the typical procress of logging commercially. As someone who spent a summer packing a saw limbing trees on a logging crew, I can say those shows don't portray logging as it is. As someone who used to be heavily involved in the timber industry and has family members who still are, I take it upon myself to stamp out this kind of misinformation when I see it.

That said, I paid for my first two years of college by cutting and splitting chords of Oak in the april/may/june timeframe, seasoning it, then selling it during the fall. It also kept me in great shape!  I frankly wouldn't want to hold the quanties of exotic woods needed to make it feasible, but I don't understand that market and therefore it's a bad investment for me.
« Last Edit: July 09, 2013, 12:13:18 PM by ncornilsen »

Joet

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Re: Wood as a tangible investment vehicle
« Reply #11 on: July 09, 2013, 12:27:31 PM »
I'm happy to be considered a fool, indeed I get a particular satisfaction when people label me as such-- but there are countless examples of what I describe in the PNW. The old growth is gone, done. Logging companies come in 100,1000, 10,000 acres at a time and it's not technically a clearcut but it's easily 80%.

I also follow real estate and their are COUNTLESS plots for sale in exactly the manner I describe. The 5-10 year growth is left and anything commercially viable is taken. The plots are then marketed for cabins, and the loggers move on to the next plot.

http://truth-out.org/news/item/12413-controversial-logging-proposal-on-federal-land-in-oregon-meets-resistance-in-the-woods-and-on-legal-front

Quote
An Island in a sea of clearcuts

referring to the federal plots of land in the cascade range of the PNW

« Last Edit: July 09, 2013, 12:40:53 PM by Joet »

Marmot

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Re: Wood as a tangible investment vehicle
« Reply #12 on: July 09, 2013, 03:46:20 PM »
There are also some Exchange-Traded Funds (ETFs) for timber:

iShares S&P Global Timber & Forestry Idx (WOOD)
Guggenheim Timber (CUT)

Haven't done any research on them though, as they are not that frequently traded and each only has a little over $200 million in total assets. If you were really interest in investing in wood though, that might be something to look into (then you don't actually have to actually buy and store wood; or buy property).

For info on what an ETF is: http://en.wikipedia.org/wiki/Exchange-traded_fund

StarswirlTheMustached

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Re: Wood as a tangible investment vehicle
« Reply #13 on: July 09, 2013, 04:03:24 PM »
There's two kinds of logging being discussed here : the managed hardwood re-growth of the East, and the wholesale clearcutting of virgin forest in the West. I think you guys might be talking past each-other, because you're both right.

In any case, I wasn't thinking of investing in logging companies, timber futures, or even buying a woodlot (though that last one has a certain appeal) -- instead using exotic hardwoods much as a goldbug does gold. Yes, you need to store it carefully in a climate controlled environment, but if you're the kind of person who knows enough about woods to get into this sort of thing (like the fellow who wrote the article I linked to) you're doing that anyway. It's not for me, or thee, but if you're a master woodworker who enjoys working with exotic hardwoods and old-growth timber, then it's probably for you, because these things are getting rarer and more expensive year-by-year. (Even if these woods were being sustainably harvested, and they're not-- many very desirable hardwoods have made it onto the endangered species list--they'd still be getting rarer as the per-capita abundance went down with population growth.) If nothing else, someone like that would be well advised to secure their own supply as a portion of their 'stache, even if they don't want to trade in the open market.

marty998

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Re: Wood as a tangible investment vehicle
« Reply #14 on: July 09, 2013, 04:11:30 PM »
This was big in Australia from 2003-2008. The industry was given the moniker "managed investment schemes" and it came with significant tax benefits too.

It worked the same as managed funds. Money was pooled and the assets bought were plantation fields. The kicker was that the capital you contribute could be claimed as a tax deduction upfront and any potential gain was assessed at CGT rates (half the marginal rate) on sale. So you can make a gain and get a tax benefit! Sweet as bro, every man on the street signed up for it.

The planners and fund managers loved it, some were charging up to 8-12% in fees and commissions. Good times for all.

Then the ATO got wind of it and said "hang on" somethings not right, and threw the book at it.

Of course once that happened the money stopped pouring in. But how were the managers and planners going to be paid now? With existing unitholder funds, that's how!

This worked for a while, but the problem was trees take a very very long time to grow. Before the chainsaws could come in many of these schemes simply collapsed and most investors lost everything.

For the history lesson and some great cases in how not to invest, goole Great Southern Plantations and Timbercorp.

ncornilsen

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Re: Wood as a tangible investment vehicle
« Reply #15 on: July 09, 2013, 04:38:00 PM »
I'm happy to be considered a fool, indeed I get a particular satisfaction when people label me as such-- but there are countless examples of what I describe in the PNW. The old growth is gone, done. Logging companies come in 100,1000, 10,000 acres at a time and it's not technically a clearcut but it's easily 80%.

I also follow real estate and their are COUNTLESS plots for sale in exactly the manner I describe. The 5-10 year growth is left and anything commercially viable is taken. The plots are then marketed for cabins, and the loggers move on to the next plot.

http://truth-out.org/news/item/12413-controversial-logging-proposal-on-federal-land-in-oregon-meets-resistance-in-the-woods-and-on-legal-front

Quote
An Island in a sea of clearcuts

referring to the federal plots of land in the cascade range of the PNW



I tried editing my post to remove that first part and make it a bit less confrontational, but the site crashed. anyway, I live in the pacific northwest, and spend alot of time in the mountains. I'm not sure where that particular photo was taken, but I suspect it's either doctored or is otherwise not representative of what's going on up here. Oldgrowth is gone and done to loggers, yes... - the mills around here can't even process it anymore, the logs are too big. There's plenty of old growth forests around that will never be logged.
Also, logged land must be replanted, and those trees grow back.  I agree perhaps some additional steps toward sustainability might be beneficial, but timber in public lands absolutely is a resource that can and should be exploited in an intelligent way.

skyrefuge

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Re: Wood as a tangible investment vehicle
« Reply #16 on: July 09, 2013, 04:58:12 PM »
I'm not sure where that particular photo was taken, but I suspect it's either doctored or is otherwise not representative of what's going on up here.

Looks pretty much exactly like this Google aerial map to me. And I've noticed plenty of other checkerboarded areas like this when browsing Google Earth in the PNW.

Back on the original topic, I assumed it was an Onion-like satirical post created solely for the purpose of mocking gold bugs. As such, it was a pretty awesome post, but now I'm getting the impression it was actually *intended* to be taken seriously...?

gooki

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Re: Wood as a tangible investment vehicle
« Reply #17 on: July 10, 2013, 01:08:49 AM »
I have about $1500 of native timber invested/stored in my garage. Retail value is twice that, but my intention is to use it.

Kazimieras

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Re: Wood as a tangible investment vehicle
« Reply #18 on: July 10, 2013, 07:50:08 AM »
Did you know that buying the "paid" US postage stamps have outperformed many parts of the market and that one hedge fund manager joked that he should look at that as in investment vehicle.

Wood is a lump of cellulose that has no productive value by itself. Think of it as a lighter form of gold. The point being that it isn't an investment - it is a gamble. You are hoping that the market will pay more for what you bought it for (similar to the Dutch and tulips). Feel free to put your money in wood, but don't call it an investment.

ncornilsen

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Re: Wood as a tangible investment vehicle
« Reply #19 on: July 10, 2013, 07:56:30 AM »
Did you know that buying the "paid" US postage stamps have outperformed many parts of the market and that one hedge fund manager joked that he should look at that as in investment vehicle.

Wood is a lump of cellulose that has no productive value by itself. Think of it as a lighter form of gold. The point being that it isn't an investment - it is a gamble. You are hoping that the market will pay more for what you bought it for (similar to the Dutch and tulips). Feel free to put your money in wood, but don't call it an investment.

I disagree with that, wood has a lot of intrinsic value, just as raw steel does. It's the primary resource one needs to build shelter, for one thing.  There's probably more academic discussions on this, but it seems the value of anything is it's intrinsic value + it's speculative value. Wood seems to have little speculative value, whereas gold has little intrinsic value.   This of course, applies less to exotic wood than more common structural grade wood, I suppose.

Kazimieras

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Re: Wood as a tangible investment vehicle
« Reply #20 on: July 10, 2013, 08:58:22 AM »
I disagree with that, wood has a lot of intrinsic value, just as raw steel does. It's the primary resource one needs to build shelter, for one thing.  There's probably more academic discussions on this, but it seems the value of anything is it's intrinsic value + it's speculative value. Wood seems to have little speculative value, whereas gold has little intrinsic value.   This of course, applies less to exotic wood than more common structural grade wood, I suppose.

A tree in a forest has value, and it grows as the tree ages (typically). Once processed the wood has value to be used for something. However  it is an unproductive commodity, just like raw steel. Investing is putting money somewhere that will (hopefully) earn you more money in future, typically due to growth. If you buy a stock you are effectively loaning that company your money with the hope that they will take your $1 and make it into $1.20. If you are buying something that cannot increase its value on its own and is reliant on the next person buying it in order for any money to be made (read up on this http://en.wikipedia.org/wiki/Greater_fool_theory).

If I own a rental property, it is an investment since someone pays me to live there and my money is being productive. If I buy some seeds, plant them, wait and then harvest the crop to sell, that is an investment. Putting money into something that just sits there is speculation at best and gambling at worst.

StarswirlTheMustached

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Re: Wood as a tangible investment vehicle
« Reply #21 on: July 10, 2013, 02:40:49 PM »
I disagree with that, wood has a lot of intrinsic value, just as raw steel does. It's the primary resource one needs to build shelter, for one thing.  There's probably more academic discussions on this, but it seems the value of anything is it's intrinsic value + it's speculative value. Wood seems to have little speculative value, whereas gold has little intrinsic value.   This of course, applies less to exotic wood than more common structural grade wood, I suppose.

A tree in a forest has value, and it grows as the tree ages (typically). Once processed the wood has value to be used for something. However  it is an unproductive commodity, just like raw steel. Investing is putting money somewhere that will (hopefully) earn you more money in future, typically due to growth. If you buy a stock you are effectively loaning that company your money with the hope that they will take your $1 and make it into $1.20. If you are buying something that cannot increase its value on its own and is reliant on the next person buying it in order for any money to be made (read up on this http://en.wikipedia.org/wiki/Greater_fool_theory).

If I own a rental property, it is an investment since someone pays me to live there and my money is being productive. If I buy some seeds, plant them, wait and then harvest the crop to sell, that is an investment. Putting money into something that just sits there is speculation at best and gambling at worst.

What if all the gold mines in the world shut down, but there remained a demand for gold? You KNOW the price would go up. If you were a hobbiest goldsmith, you'd want to aquire your supply quickly while still available.
Most woods, I agree, aren't any good for storing value. BUT there are a number of exotic hardwoods which have been placed on the endangered species list and are now illegal to harvest. Black market harvesting could very well drive them to extinction. It's a case of "get 'em while they're hot"
-- now, the price of these unavailable woods will drop to nothing on the larger market, but amongst hobbyist aficionados, there are woods that can go for a thousand dollars per board foot, and their price will only rise. The almost-mystical cachet of these legendary woods will see to that.

This is what I  (and the article I linked to that I don't think anybody read) have been getting at. Now, based on the response this thread has gotten, this forum doesn't have any of the hardwood aficionados for whom this might be a good idea. If you're not already involved in the trade of these woods (at least on the purchasing angle) stay out! You could go to jail if you import the wrong species from the wrong country. Not to mention losing your shirt on the deal.

It's a very specialized opportunity that I don't think any of us here should or will be involved in, but I thought it was a fascinating idea none the less.

kyleaaa

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Re: Wood as a tangible investment vehicle
« Reply #22 on: July 10, 2013, 08:50:36 PM »
I own timber land. It's worked pretty well as an investment and isn't particularly correlated with either stocks or bonds. A very good asset to own if you can swing it. Throws off cash flow in chunks, though, so you'd better be prepared to carry it for all those years.

sol

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Re: Wood as a tangible investment vehicle
« Reply #23 on: July 10, 2013, 09:36:22 PM »
As an investment idea, I think you might do better finding old wood than buying trees.

Certain hardwoods are highly prized for musical instruments if they've been cut and stored dry for a decade or two (or three or four).  I've heard lots of stories of people finding a four foot pile of fence boards under a tarp in grandpa's garage, and making tends of thousands of dollars off of them from first rate luthiers.

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Re: Wood as a tangible investment vehicle
« Reply #24 on: July 10, 2013, 10:18:25 PM »

Most woods, I agree, aren't any good for storing value. BUT there are a number of exotic hardwoods which have been placed on the endangered species list and are now illegal to harvest. Black market harvesting could very well drive them to extinction. It's a case of "get 'em while they're hot"


Huh, here I was thinking if you were a local of the correct climate you could buy the land they grow on and get the psychological benefit of knowing you were preserving them in the meantime and/or sustainably harvesting.  But it sounds like regulation, or rather the possibility of regulation, might lead people to cut them down as quickly as possible.  Ironic.

It's interesting.  I'm actually going to pass that website along to the spouse because he's sort of interested in Japanese carpentry or at least I know he bought some saws.  So he might be the sort of person who knows enough about rare woods (you can tell I really take an interest in my loved ones' hobbies).  We certainly don't have any storage now, though. 

Thinking about regular timberland, this is just off the top of my head, but what about technological innovations that would make us less dependent on trees?  Like the rise of paperless offices or, more impactful probably, the invention of more environmentally friendly or cheaper or recycled building materials?  Plus more extreme weather patterns that might negatively effect the "crop" in ways impossible to predict over the timeframe.
Personally I would be interested in purchasing land for recreational or preservation purposes and it would be nice to know more about the timber options just as a way to cover the property tax costs.  Since several people have mentioned it here, anyone have any pointers to a good resource to learn more?  And probably ultimately convince myself that it's a crazy stupid idea?

StarswirlTheMustached

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Re: Wood as a tangible investment vehicle
« Reply #25 on: July 11, 2013, 07:29:45 AM »
Huh, here I was thinking if you were a local of the correct climate you could buy the land they grow on and get the psychological benefit of knowing you were preserving them in the meantime and/or sustainably harvesting.  But it sounds like regulation, or rather the possibility of regulation, might lead people to cut them down as quickly as possible.  Ironic.
The correct climate for most of these tends to be in the developing world, and the locals are poor. If the land owner is poor but virtuous, his more desparate neighbours might just poach from him.
One could try planting some of these trees further north of their traditional range, since that's a thing nowadays-- I doubt the feds would mind one bit if someone planted a stand of Lingum Vitae in California.(It used to be considered a strategic material, after all; over-harvesting during WWII is probably what's done most of the damage, in that particular case.) Be prepared to wait a few decades, though.

Thinking about regular timberland, this is just off the top of my head, but what about technological innovations that would make us less dependent on trees?  Like the rise of paperless offices or, more impactful probably, the invention of more environmentally friendly or cheaper or recycled building materials?  Plus more extreme weather patterns that might negatively effect the "crop" in ways impossible to predict over the timeframe.
Paper and building materials are mostly cheap, fast growing plantation pine. Innovations in this field wouldn't affect a small-business wood-lot, because you'd be insane to try and compete in that market.  Forest is an incredibly resilient sort of ecosystem: this continent is (or was) forested from the gulf of Mexico up to the James Bay (southern tip of Hudson's bay, i.e., the arctic ocean) coast. Bad years might slow growth, but unless you've got yourself a bunch of pine for beetles to much on (and you don't want pine), I think you can weather whatever's coming. Just help succession along by introducing species from further south, since their ranges have all been moving north of late.


Personally I would be interested in purchasing land for recreational or preservation purposes and it would be nice to know more about the timber options just as a way to cover the property tax costs.  Since several people have mentioned it here, anyone have any pointers to a good resource to learn more?  And probably ultimately convince myself that it's a crazy stupid idea?

This seemed like a decent book to me, but I wasn't reading it to implement. You should probably get a more specialised resource based on what biome you're in, though; a boreal forest will be managed very differently from the deciduous hardwoods you get further south, or the temparate rainforests of the west coast.
If you have a plot with big, old oaks and can link up with a fellow with a bandsaw mini-mill, the property should have no trouble paying its taxes just from deadwood: large boards of quarter-sawn oak are very desirable to just about any fine woodworker.
If you're further north and find a plot with many maples, maybe consider a sugarbush-- but be warned! The southern fringe of workability is moving north as the climate warms.
If your region is mostly pine, I think you can forget about it. Pine is cheap, tasty to beetles, etc.


Ja, I have been thinking about this. How'd you guess?

Rural

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Re: Wood as a tangible investment vehicle
« Reply #26 on: July 12, 2013, 05:53:32 AM »

If you have a plot with big, old oaks and can link up with a fellow with a bandsaw mini-mill, the property should have no trouble paying its taxes just from deadwood: large boards of quarter-sawn oak are very desirable to just about any fine woodworker.
If you're further north and find a plot with many maples, maybe consider a sugarbush-- but be warned! The southern fringe of workability is moving north as the climate warms.
If your region is mostly pine, I think you can forget about it. Pine is cheap, tasty to beetles, etc.


Ja, I have been thinking about this. How'd you guess?

Huh. We have just such a plot with no intention of ever doing logging (which is all clearcut here, extensive and with no runoff controls, and no, we're not in the West). But I hadn't thought about quartersawn from deadwood. We have plenty of that, mostly oak with some hickory, and some more recent than I'd like because it's been a bad year for storms. Hmm. Thanks for the idea. We could probably pay more than our (low) taxes that way.

GuitarStv

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Re: Wood as a tangible investment vehicle
« Reply #27 on: July 12, 2013, 02:01:27 PM »
Most woods, I agree, aren't any good for storing value. BUT there are a number of exotic hardwoods which have been placed on the endangered species list and are now illegal to harvest. Black market harvesting could very well drive them to extinction. It's a case of "get 'em while they're hot"
-- now, the price of these unavailable woods will drop to nothing on the larger market, but amongst hobbyist aficionados, there are woods that can go for a thousand dollars per board foot, and their price will only rise. The almost-mystical cachet of these legendary woods will see to that.

I think you may have missed the boat on this for many of the woods you're talking about.  People have been complaining for ages that the quality of Brazilian rosewood available for guitar fretboards is nowhere near as good as it was 30-40 years ago.  Most of the old growth stuff is gone, and the newer growth stuff is not as prized.

StarswirlTheMustached

  • Bristles
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  • Posts: 475
Re: Wood as a tangible investment vehicle
« Reply #28 on: July 12, 2013, 05:41:06 PM »
Most woods, I agree, aren't any good for storing value. BUT there are a number of exotic hardwoods which have been placed on the endangered species list and are now illegal to harvest. Black market harvesting could very well drive them to extinction. It's a case of "get 'em while they're hot"
-- now, the price of these unavailable woods will drop to nothing on the larger market, but amongst hobbyist aficionados, there are woods that can go for a thousand dollars per board foot, and their price will only rise. The almost-mystical cachet of these legendary woods will see to that.

I think you may have missed the boat on this for many of the woods you're talking about.  People have been complaining for ages that the quality of Brazilian rosewood available for guitar fretboards is nowhere near as good as it was 30-40 years ago.  Most of the old growth stuff is gone, and the newer growth stuff is not as prized.

See? I knew I didn't know enough to get into this. Hah. Depressing, but good to know.