A QUESTION FOR THE 850
PERSONS WHO REGISTERED AS INVESTORS ON WWW.SE-TIMBERSALES.COM:
WHAT PREDICTED RETURN ON CAPITAL WILL TEMPT YOU TO INVEST IN REGULAR PINE
PLANTATIONS OR PPIC’S®
We’ve been writing and talking about how to make
money growing trees for 50 years, and the discount rate for future incomes is
widely used by foresters who comment on various cultural practices. No one that we know of has publicly asked for
the opinions of the investors themselves.
We hope that you will respond by phone at 800+455-4568 or e-mail at jacksonms@vardaman.com. We’ll pass along the most interesting
responses in future Friday Reports.
During the past five years, we’ve been offering for
sale PPIC’s (Pine Plantation Investment Contracts) that allow us to grow crops
of loblolly pine trees on the fractions of tracts that will produce very high
timber yields. In creating them, all
funds are invested in trees, none in land.
The disadvantage is that PPIC’s are illiquid. An investor can’t get out of them until the trees are 22 years
old or he can sell the PPIC to another.
On the other hand, the disadvantage decreases each year. Our experience in working with these
investors is shown by the following chart:
If our analysis is correct and this chart has any
predictive value, Gambler I should sell when the predicted yield reaches
14.75%. What do you think?
