Replies to post #331 on Investing in Timber

[a1derfullife]

Matty;

Again, I would suggest that you carefully re-read the posts on this board, and the information posted on TATF's website. If you read the Summer 2007 Tree Owner's News, published in July or August of 2007, Brunner states that TATF has paid out a total of $750,000 dollars in distributions from thinnings. If you read Brunner's post 102 on this board, dated Feb. 29, 2008, he states that TATF has paid out $850,000 in distributions from thinnings. This works out to an annualized rate of less than $200,000/year, in the second half of 2007 and beginning of 2008. TATF started paying out distributions in 2003, so $850,000 over the 5 years from 2003-2007 works out to an average of $170,000 per year. Thus, the payout rate is increasing quite slowly.
Also, since TATF is paying out $1615 per 100 trees purchased for the wood from the 7 year thinnings, payments of $200,000 per year are enough to pay the owners who purchased 12,500 seedlings per year. According to TATF's Tree Owners News, TATF planted 62,000 seedlings in 1992, and 206,000 seedlings in 1993. Assuming that 80% of these were teak, this works out to about 50,000 teak seedlings in 1992, and 165,000 teak seedlings in 1993. Thus, at current utilization rates, it will take Raleo another 10-15 years to finish using, and TATF to finish paying distributions on, the 7 year thinnings of the 1993 teak. Of course, Raleo could buy more wood than it has been buying, but it could also buy less. If Steve Brunner had come up with a substantial new market for the lumber from the thinnings, I'm sure he would have announced it, so I think it's safe to say that Raleo is the only market for the thinnings, and Raleo is not using very much of them.
I have tried to carefully read the information on TATF's website, and thoughtfully and fairly analyze the available data. Unfortunately, the results of these analyses are quite discouraging. The more I, and others, such as fawtsc, and Belmontx have looked and analyzed, the more convinced we have become that buying trees from TATF has been and will continue to be a very poor investment.

A1