George Nichols's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/192514/comments http://seekingalpha.com/article/146477-cut-vs-wood-timber-etfs-square-off?source=feed#comment-573881 573881 tinyurl.com/64cnhe.

You made the common error of conflating the two unrelated concepts of: 1) timberland as an asset class (i.e. what Harvard and Yale have owned) and 2) sector bets via forestry stocks.

The stark differences in their downside-correlation profiles were shown in 2008. The NCREIF Timberland Index generated positive returns, while CUT plunged roughly 48.7%.

It's an apples-to-oranges comparison that retail investors often make, which unfortunately causes them to lose their shirt.

Speaking of which, the news Roger is alluding to is the recent high-profile collapse of Australian entities Great Southern Group and Timbercorp. Many retail timber investors were largely wiped out.

The author's assertion that retail investors now have access to this formerly "forbidden" asset class is highly premature.]]> Sat, 04 Jul 2009 11:21:32 -0400 tinyurl.com/64cnhe.

You made the common error of conflating the two unrelated concepts of: 1) timberland as an asset class (i.e. what Harvard and Yale have owned) and 2) sector bets via forestry stocks.

The stark differences in their downside-correlation profiles were shown in 2008. The NCREIF Timberland Index generated positive returns, while CUT plunged roughly 48.7%.

It's an apples-to-oranges comparison that retail investors often make, which unfortunately causes them to lose their shirt.

Speaking of which, the news Roger is alluding to is the recent high-profile collapse of Australian entities Great Southern Group and Timbercorp. Many retail timber investors were largely wiped out.

The author's assertion that retail investors now have access to this formerly "forbidden" asset class is highly premature.]]> http://seekingalpha.com/article/84787-potlach-spinoff-curb-your-enthusiasm?source=feed#comment-209256 209256
Pulp & Paperboard (35.3%), Wood Products (24.4%), Consumer Products (23.4%)

While of course timberland revenue % varies from year to year, the swings aren't dramatic. PCH's timberland-related revenue made up 17% of sales in the poor housing market of 2007, but a near-identical 18% in the strong housing market of 2005. Hence, at various stages of the economic cycle, PCH has primarily been a manufacturer rather than a timberlands manager.

In your response to my previous article, you said you're interested in (or even own) PCH as a timber play. My goal isn't to criticize PCH or encourage shareholders to sell the stock; rather, to give shareholders a better understanding of exactly what they own.]]> Sat, 19 Jul 2008 07:47:54 -0400
Pulp & Paperboard (35.3%), Wood Products (24.4%), Consumer Products (23.4%)

While of course timberland revenue % varies from year to year, the swings aren't dramatic. PCH's timberland-related revenue made up 17% of sales in the poor housing market of 2007, but a near-identical 18% in the strong housing market of 2005. Hence, at various stages of the economic cycle, PCH has primarily been a manufacturer rather than a timberlands manager.

In your response to my previous article, you said you're interested in (or even own) PCH as a timber play. My goal isn't to criticize PCH or encourage shareholders to sell the stock; rather, to give shareholders a better understanding of exactly what they own.]]> http://seekingalpha.com/article/84241-how-timber-like-are-timber-reits?source=feed#comment-201603 201603
Naturally, annual revenue % data varies from year to year, but the swings generally aren't dramatic. As someone noted, 2007 was marked by a poor housing market; but as I note below, sales % didn't vary dramatically during the strong housing market of 2005:

'% timberland-related revenue, 2007 -> 2005 : PCH = 17% -> 18%; RYN = 28% -> 25%; PCL = 71% -> 68%.]]> Wed, 09 Jul 2008 13:48:51 -0400
Naturally, annual revenue % data varies from year to year, but the swings generally aren't dramatic. As someone noted, 2007 was marked by a poor housing market; but as I note below, sales % didn't vary dramatically during the strong housing market of 2005:

'% timberland-related revenue, 2007 -> 2005 : PCH = 17% -> 18%; RYN = 28% -> 25%; PCL = 71% -> 68%.]]> http://seekingalpha.com/article/83836-adding-wood-to-your-portolio-a-worthwhile-investment?source=feed#comment-199143 199143
Thanks, Rudi. What were the start/finish dates for your correlation period? Regarding your question, historical lumber prices are available, but my correlations were based on the NCREIF Timberland Index. It reports returns of selected TIMOs (timber investment management organizations) on a quarterly basis.

Xmplary, interesting point. There are certainly environmental and aesthetic ramifications to consider. Just from a carbon standpoint, I'm told harvested trees may release *some* carbon back into the atmosphere (versus all of it from naturally decaying deadwood). And, as the other poster noted, areas harvested by timber managers are almost always replanted, which creates future carbon sinks.

On a related note, carbon credits are starting to make up a small, but significant, portion of investment returns for a few timber managers.

- George]]> Sun, 06 Jul 2008 09:58:37 -0400
Thanks, Rudi. What were the start/finish dates for your correlation period? Regarding your question, historical lumber prices are available, but my correlations were based on the NCREIF Timberland Index. It reports returns of selected TIMOs (timber investment management organizations) on a quarterly basis.

Xmplary, interesting point. There are certainly environmental and aesthetic ramifications to consider. Just from a carbon standpoint, I'm told harvested trees may release *some* carbon back into the atmosphere (versus all of it from naturally decaying deadwood). And, as the other poster noted, areas harvested by timber managers are almost always replanted, which creates future carbon sinks.

On a related note, carbon credits are starting to make up a small, but significant, portion of investment returns for a few timber managers.

- George]]> http://seekingalpha.com/article/83211-timber-etfs-without-the-timber?source=feed#comment-196248 196248
In the next week or two, I'll publish brief, follow-up articles on: 1) timber REITs and 2) Potlatch's proposed spinoff.

While timber REITs are generally the most viable options for investors, I'll explain why investors shouldn't go so far as to assume that these stocks will perform as reliable substitutes for direct forest ownership.]]> Mon, 30 Jun 2008 20:26:03 -0400
In the next week or two, I'll publish brief, follow-up articles on: 1) timber REITs and 2) Potlatch's proposed spinoff.

While timber REITs are generally the most viable options for investors, I'll explain why investors shouldn't go so far as to assume that these stocks will perform as reliable substitutes for direct forest ownership.]]> http://seekingalpha.com/article/76971-three-s-company-ssga-launches-third-global-reit-etf?source=feed#comment-166747 166747
1) We have a conversation thread on global REIT trends, and we're discussing your article, at the Bogleheads/Diehards forum: www.diehards.org/forum...

2) The "See related story" part of your article lacks the link to your accompanying article from yesterday at seekingalpha.com/artic...

- George]]> Tue, 13 May 2008 09:54:18 -0400
1) We have a conversation thread on global REIT trends, and we're discussing your article, at the Bogleheads/Diehards forum: www.diehards.org/forum...

2) The "See related story" part of your article lacks the link to your accompanying article from yesterday at seekingalpha.com/artic...

- George]]>