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More International Timber Investing

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By
Gary Scott

Here is some more international timber investing sage advice from a very wise and proven investor!

We can gain some excellent thinking about more international timber investing by listening to Jeremy Grantham a Boston-based money manager to which institutions and individuals have entrusted $22 billion, Grantham is one of the most respected U.S. fund managers and is best known for his acumen in relative values represented by different asset classes and markets worldwide.

More International Timber Investing Photo

International Timber Investing

Gary Scott's past articles

Grantham agrees with my thinking that there is great opportunity for more international timber investing to lower risk by moving into asset classes with higher implicit returns, of which includes his favorite asset class, timber.

One of Grantham's comments is that Timber is a low-risk, high-return asset class in existence because people are not familiar with it. What they are not familiar with they avoid. He believes that timber is the only commodity that has had a steadily rising price for 200 years, 100 years, 50 years, 10 years. And a unit of wood, just the price of a piece of wood -- in real terms -- beat the S&P over most of the 20th Century, from 1910 to 2000. The price of a piece of wood actually outgrew the price of a share of the S&P, which is an unfair context, because there is some growth embedded in the share of the S&P and there is no growth embedded in a single cubic foot of wood. The yield from timber averaged about 6.5%. The yield from the S&P averaged 4.5% The current yield on the S&P is 1.25% and the current yield on timber is 6.5%.In each of the three great past bear markets that I've referred to --1929-'45 and 1965-'82, and a third one that's off everyone's radar screen, which is post-World War I, 1917-'25 -- the price of timber went up. It is the only reliably negatively correlated asset class when you really need it to be. One reason for that is you can withhold the forest. If you find the price of lumber is no good, you don't cut. Not only is there no cost of storage, the tree continues to grow and it gets more valuable. Grantham feels this is a virtue.

More International Timber Investing Photo

International Timber Investing

See our North Carolina international timber investing at LittleHorseCreek.com

Timber has been one of my favorite recommendations for some time so I could not agree more. For more on Jeremy Grantham go to gmo.com

Gary Scott

For more on international timber investing as a business visit Successguidelines.com

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More International Timber Investing
March 17, 2005
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