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Thousands of Southerners Planted Trees for Retirement. It Didnít Work.
Old 10-18-2018, 06:13 PM   #1
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Thousands of Southerners Planted Trees for Retirement. It Didnít Work.

Did any of you catch the WSJ article about the Southerners who planted thousands of pine trees in the 1970s, thinking that this was a safer investment for retirement than the stock market, only to find out now, that there isn't enough demand, and there aren't enough saw mills?

Sorry, the article is firewalled:
https://www.wsj.com/articles/thousan...ork-1539095250

and the MSN version:
https://www.msn.com/en-us/money/reti...ob-fb-enus-894


Some of the comments about the stock markets astounded me!
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Old 10-18-2018, 07:13 PM   #2
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Nothing new, but sad nonetheless.

Investing most or all of a nest egg in softwood is no different than investing in a single market. Department stores (Sears, JC Penney, M Wards) come to mind. Video rental outlets were hot until they weren't. Diversification isn't nearly as sexy as the latest hot tech stock, but I sleep well with my total market index funds.

Also, like many industries, a lot of vertical integration has occurred. GA Pacific, Weyerhouser, etc get their raw materials from large landowners at significant volume buys. A mom and pop has a limited market under any condition.

I worked with a gal many years back, and our private company had been acquired by mega-corp, so 401K replaced ESOP. I asked her if she was going to partake in 401k. Nope. She didn't trust mega-corp. But she had an IRA where she was buying AOL, Dogpile, and later, Yahoo. I hope she came out okay, but have my reservations...
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Old 10-18-2018, 07:23 PM   #3
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Originally Posted by Red Badger View Post
Investing most or all of a nest egg in softwood is no different than investing in a single market.
My thoughts exactly. No diversification. Risk of disease, drought, and forest fires....and the realized market risk.
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Old 10-18-2018, 07:50 PM   #4
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A lot of paper mills up here in Wisconsin had their own plantation forests -- hundreds of thousands of acres. As the industry has contracted, the forests have gone up for sale. The state acquired some of it.
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Old 10-18-2018, 08:33 PM   #5
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RB nailed it.
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Old 10-18-2018, 08:36 PM   #6
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Quote:
Originally Posted by HNL Bill View Post
Did any of you catch the WSJ article about the Southerners who planted thousands of pine trees in the 1970s, thinking that this was a safer investment for retirement than the stock market, only to find out now, that there isn't enough demand, and there aren't enough saw mills?

Sorry, the article is firewalled:
https://www.wsj.com/articles/thousan...ork-1539095250

and the MSN version:
https://www.msn.com/en-us/money/reti...ob-fb-enus-894


Some of the comments about the stock markets astounded me!
we had similar schemes in Australia , all packaged up with loans to increase your investment input ( usually involving property mortgages ) and partly sold as a tax evasion scam .

it ruined many rich and not so rich .

sadly very few places enforce the death penalty in Australia ( no matter how terrible the crime )
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Old 10-18-2018, 08:40 PM   #7
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Having a large, straight pine tree removed in an urban area costs quite a bit. When you ask the tree guys why, and shouldn't the return on the wood subsidize it, they just kind of chuckle back at you.

That's an urban area. I would have expected the farms would be more lucrative. Guess not, it is all in the current market.
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Old 10-18-2018, 08:44 PM   #8
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Australia's biggest scam comes crashing down

https://www.smh.com.au/business/aust...0512-b14t.html

EDITORIAL:
Australia's biggest financial scam?

EDITORIAL: Australia's biggest financial scam?
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Old 10-18-2018, 09:04 PM   #9
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The cost of construction lumber has only gone up since I started building my house about 4 years ago.
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Old 10-18-2018, 09:07 PM   #10
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I’m sure there are a few who lost their shirts, but those interviewed seemed savvy and affluent.

Cry me a river.
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Old 10-18-2018, 09:56 PM   #11
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i am savvy enough not to borrow , without very careful thought

however others are swayed by greed and promises ( and normally trust-worthy folks by out-sized commissions )

remember all investing ( even in bank accounts ) involves risk
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Old 10-19-2018, 05:48 AM   #12
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The cost of construction lumber has only gone up since I started building my house about 4 years ago.
That's the real kicker, isn't it? Raw materials down, but finished product up.
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Old 10-19-2018, 07:10 AM   #13
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Starting in the 80's I considered timber investments in the south. At the time the data I saw indicated timber land and timber historically matched or exceeded stocks. (So much for historical data!) I never pulled the trigger. Maybe now that the market is down would be the time to buy. But, not me.
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Old 10-19-2018, 09:00 AM   #14
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Having a large, straight pine tree removed in an urban area costs quite a bit. When you ask the tree guys why, and shouldn't the return on the wood subsidize it, they just kind of chuckle back at you.

That's an urban area. I would have expected the farms would be more lucrative. Guess not, it is all in the current market.
Haha. Most trees in urban areas are only good for firewood at best.

Look at the ends of logs after they've been cut for a few days. They probably have a blue stain in them, the stain is caused by metal, mainly common nails. Even if it's not there there's many other dangers that come with urban trees. My crews scanned logs with military mine detectors for metal. One day a log went in, ruined a $1000 saw, almost killed the offbearer from flying shrapnel. That urban tree had a rot pocket filled with concrete!

Of course there's many kinds of metal that don't turn blue in all species. We hit a 7/8" cable 30' up in an elm, no blue. Yours truly was standing right behind the saw when it struck. A circle saw has replaceable teeth and shanks. We lost every one, $500 we didn't have. Of course there's was 120 pieces of shrapnel we luckily never found.

Then there's the liability in felling urban trees and the costs. We'd turn down smaller tracts of timber, moving equipment is expensive.

I spent 10 years in logging and lumber. Never met anyone who made a lot of money, without being a felon. Occasionally a landowner would have a big payday from large, hundreds of acres, old growth hardwood timber stands. Walnut, White and Red oak veneer can bring a pretty penny when the market is hot. Of course you're going to have to find a logger who will actually pay a fair price. That's less common than you'd expect. I recall a stand of walnut that should have gone for $600k -$750k (in 1980) that buyer paid $90k.
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