Trees, Wood, Projected Harvest and Dollars

[rrich]

There was a thread about an investment in trees. In theory, the investor purchased a group of saplings. At various intervals the trees would be pruned and thinned. After some time, the thinning of trees would be actual harvesting and thus revenue returned for the investor.

A good theory.

This was discussed here several years ago.

Fast forward to today.

I received an invitation to invest in some Koa trees to be planted and grown on the big Hawaiian island, a.k.a. The Big Island or the County of Hawaii.

The projections, the numbers, everything looked so good and one of those 'You can not lose' schemes. In twenty years the harvest would yield about 10 times your original investment. The too good to be true flag is leading the parade down Main Street.

Well, me being not as stupid as I am ugly, I did some investigation. I found the name of a Hawaiian woodworker that actually carves and uses Koa wood. In an E-Mail, I asked if the projections of this investment were realistic. I got a very short response, "I see no way that they can meet those projections."

So my friends, if you hear of one of these tree harvest in 20 years investment opportunities, please investigate carefully. Please verify through an independent third party.

[Sebastiaan56]

That's an annualised rate of return of 11.3%, over 10 years for an organic investment. I agree, you have every right to doubt this one.

[artme]

You should be thankful that your sceptics antenna works so well.

Too many such schemes as this in the world.

[hughie]

If its too good to be true, then its too good to be true!

[underfoot]

Ahh yes...The alarm on my bullsh*t-o-meter started sounding about 15 years ago when amazing returns were being promised for Pauwlonia plantations
A little research proved the numbers to be a little ...er...optimistic.
needless to say I declined,... unlike some others.
I love the stuff for making models and patterns, and it's really cheap

[whitewood]

I believe that most forestry Managed Investment Schemes and others that are similar fail because they are driven by finance people and not 'farmers'. The aim of the scheme is to make money out of the investors. Making money for the investors is a means to that end and is at the end of the project. The concepts are sound but it is putting it into practice and maintaining it for the duration of the project that the problem lies
Whitewood

[jimbur]

Ahh yes...The alarm on my bullsh*t-o-meter started sounding about 15 years ago when amazing returns were being promised for Pauwlonia plantations
A little research proved the numbers to be a little ...er...optimistic.
needless to say I declined,... unlike some others.
I love the stuff for making models and patterns, and it's really cheap

Never seen it for sale. With all the hype about seedling to furniture in two days you'd think the market was flooded with it.
Cheers,
Jim

[hughie]

There are of course some trees that will generate a good return but over a longer period generally. Most of these trees would be known to all of us, trees such as Western Red Cedar and so. I suspect that any benefit would be for the next generation, although we could grow African Mahogany in the Top End to good size in less than 20 years or so.

Picked up a report a while back into growing exotic timbers in Queensland, along with a study some plantings done, it was not very encouraging. They seemed to have picked a good number of trees from many parts of the world. But the results were not the encouraging and only a few did I recognize. They seem to miss many of expensive endangered species. That given our climate variation I would have thought worth having a go at and if successful a great money earner. I suppose these trees were not very exciting for the academics.

[Sebastiaan56]

I agree Hughie, a couple of others that come to mind are Walnut and Rosewood's (Dalbergia species). Very high value in 30-50 years time.