Buying / Owning Timberland

[rb]

Jan,

 

Is your approach and are your considerations at this stage here strictly rational, from an investment angle? - Please do not consider the question here asked as sceptical or negative in any way, because it's not meant that way. There can actually be other incentives and motives for doing such an investment, which is a personal matter.

I've often thought about this and discussed it with many people...

 

What so many people don't get, and frequently argue about is that you can do everything, OR more precisely, you are NOT limited to one thing.  You can own a tremendous amount of stock, real estate, business interests, etc...but you can also own a bit of precious metal. 

 

I have heard it said that "in order to own gold, you must also own lead.  For without lead, you can not keep gold". 

 

Real estate can be great...but it is not anonymous, it is not mobile, it is not concealable, it is not liquid.

 

I am of very limited means...but I've still got a little bit of gold.

 

 

I think it would be incredibly foolish NOT to have a few percent of your wealth in gold/precious metals.

 

This is ESPECIALLY the case today, as the situation in the USA has probably become the most dangerous/volatile in my life time.

 

I am fascinated by the fact that some people think that should some bad or even cataclysmic event were to happen we'd go back to exchanging gold nuggets.

 

Also keeping a few points of your wealth in gold i guess could be fun. Because you can fondle it. But really a few points for your wealth (especially if you're of very limited means) will do you no good in a dystopian scenario. If you really want to prepare to such a scenario there are better ways to allocate a few points of net worth that will result is vastly better outcomes.

[Spekulatius]

What would worry me about trees is if wood is even a construction material any more 50 years from now? If not, wood prices may be much much lower.

 

What would you build with?

 

Steel. 50 years from now possibly composite materials.

[Gregmal]

What would worry me about trees is if wood is even a construction material any more 50 years from now? If not, wood prices may be much much lower.

 

What would you build with?

 

Steel. 50 years from now possibly composite materials.

 

Agree. Look at decking over the past couple decades.

[Guest MarkS]

I own some Western Forest Products. https://www.theglobeandmail.com/investing/markets/stocks/WEF-T/

I can't walk through it admiring my trees, but it pays a dividend and easy to get out of it needed.

[Pelagic]

Thousands of Southerners Planted Trees for Retirement. It Didn’t Work.

 

https://www.wsj.com/articles/thousands-of-southerners-planted-trees-for-retirement-it-didnt-work-1539095250?mod=cx_immersive&cx_navSource=cx_immersive&cx_tag=collabctx&cx_artPos=1#cxrecs_s

 

Interesting reading this considering that Hurricane Michael likely decimated a significant portion of the timberland in the SE. I believe Oddballstocks mentioned earlier the problem of not being able to diversify as an individual investing directly in timberland and the potential for a tornado (or in this case a hurricane) to wipe you out. I don't think anyone is concerned with the effects of Michael on timberland yet as there are more pressing matters but it certainly tracked over a lot of the SE US' timberland and almost certainly destroyed a lot of it.

 

I found this paper analyzing the past impacts of hurricanes on timberland. Page 215 has a table totaling the economic impact in dollars from a selection of hurricanes.

 

https://www.fs.fed.us/pnw/pubs/gtr802/Vol1/pnw_gtr802vol1_prestemon01.pdf

[rb]

What would worry me about trees is if wood is even a construction material any more 50 years from now? If not, wood prices may be much much lower.

 

What would you build with?

 

Steel. 50 years from now possibly composite materials.

Why do you think they will become cheaper than wood?

[Guest MarkS]

pelagic

 

If memory serves that portion of the country primarily grows southern yellow pine.  You would use this species for framing houses and possibly pulp.

[Spekulatius]

What would worry me about trees is if wood is even a construction material any more 50 years from now? If not, wood prices may be much much lower.

 

What would you build with?

 

Steel. 50 years from now possibly composite materials.

Why do you think they will become cheaper than wood?

 

Competing materials may not be cheaper, but they are simply better.  Cost savings may come from lower labor and build costs.

 

Wood is a crappy material. It easily degrades when exposed to moisture, it’s flammable, quality is inconsistent and it is labor intensive to harvest and to build with. I guess it will be around for a long time, but it may not be the material of choice 50 years from now.

[Cardboard]

Yeah we know, in Germany they like cement. Takes them 3 generations to pay for a house. Then if you consider the CO2 impact of producing it and required rebar, makes them big polluters.

 

Cardboard

[oddballstocks]

What would worry me about trees is if wood is even a construction material any more 50 years from now? If not, wood prices may be much much lower.

 

What would you build with?

 

Steel. 50 years from now possibly composite materials.

Why do you think they will become cheaper than wood?

 

Competing materials may not be cheaper, but they are simply better.  Cost savings may come from lower labor and build costs.

 

Wood is a crappy material. It easily degrades when exposed to moisture, it’s flammable, quality is inconsistent and it is labor intensive to harvest and to build with. I guess it will be around for a long time, but it may not be the material of choice 50 years from now.

 

I'd take the other side of that trade.  It's been used for centuries, and will continue to be used for centuries.

 

I have no idea where you're located.  But around me in Pennsylvania (US) there are plenty of wood buildings from the 1800s still standing and in perfect shape.  There are log cabins that are even older, still being used and lived in.  Made entirely out of wood with mortar between the logs.

 

Wood doesn't last forever, but it's a pretty long time! Even more common here is brick shell (heated dirt) with a wood interior.

 

 

Wood doesn't just disintegrate when it hits water either. Up until recently boats were made out of wood.  A tree that falls in the forest will disintegrate, but if it falls in a lake it might be there preserved, waterlogged, but preserved for decades.

 

[Cardboard]

If you are anti-CO2, using wood for construction vs steel or cement makes ton of sense.

 

A tree absorbs CO2 during its life, then releases it when it rots once dead. If cut, then used for construction, the house can be considered a CO2 capture system for 300+ years.

 

Not only that but if the forest is harvested responsibly: cut a portion of the trees, the other grow more and re-plant, you improve the forest ability to capture CO2.

 

Cardboard

 

 

[bizaro86]

On the other hand, ICF construction is probably more energy efficient once constructed. Most of the net zero houses around here (cold climate) are ICF because it saves so much heat during the winter.

 

It's not even close to replacing wood in normal construction because of the cost. Also, there are always arguments that wood could be used for taller buildings because of improved fire suppression, which could add a lot of demand.

 

I'd take the 'wood structures still being built in 50 years' side of the bet also.

[Spekulatius]

I have nothin against wood, but it is likely they there is better material available at some point in thr future. horses were used for thousands of years too, until the automobile can along.

 

In Germany al lot of autoclave aerated concrete (YTONG brand name ) is used. Lightweight fire resistant and great insulator.

https://en.m.wikipedia.org/wiki/Autoclaved_aerated_concrete the cost of builsid a house in stone or prefab stone and wood structures is. It not that  differnt than you would believe. It’s how the rest of the world does it, just hate US and Canada is stuck building barns that go for houses for some reason. 8).

Oddball is correct that wood can last a long time. There are houses with wood structures from medieval times around and it is unlikely that any concrete structure will survive that long without restauration . Also, even when stone is used for walls, wood is still used for the roof structure. the other possibility is that thr properties of wood are enhanced by treating it or infusing it with other materials making it less vulnerable. I know we have pressure treated wood, but it is likely they chemist sill come up with something they makes it fire resistant, invulnerable to pests and moisture resistant for a long time.