Wednesday, March 10, 2004

Make No Mistake. Bruce isn't gonna pay a lot for that teak.

I am at present all about teak.

The Teak Site we looked at has got me looking for holes, but as best I can tell, everything is clean. It's an honest to goodness Investment™, an exotic security, a swamp property in Miami with a summer home in the Cayman's to some, but to my eye it's legitter than your kid's college fund.

Important Investor Information:

  • Diversity of your Investment -

    We are growing more than 40 species of precious tropical hardwood trees, carefully chosen by our foresters for their beautiful hardwoods, excellent growth potential, and high value, both on the local and international markets


  • Growth potential of your Investment -

    All of our selected species of tropical hardwoods are valuable. Some are already quite scarce and many of their export/import prices are not published. We can, however, use their retail prices as a guide.

    Teak for example sells for nearly four times the price of black walnut, considered to be one of the finest hardwoods grown in North America. And some of our hardwood species sell for even more than teak.

    We expect the prices of all of our hardwoods to go much higher as the world's remaining tropical rainforests are either destroyed or placed off limits to logging.



  • Adaptability of Investment to market forces -

    Which species we plant in any year will depend upon the availability of quality seeds and seedlings, and the availability of planting areas within the farms which match each species' requirements.


  • Recommended vesting period of Investment -

    For teak, we project that the first commercial thinning harvest will be in the 6th - 9th year after field-planting, followed by additional thinning harvests approximately each 3 or 4 years and continuing until the final harvest in about the 25th year.


  • Frequency of Dividends -


    After each harvest, if you wish we will sell your hardwoods for you and send you the proceeds.


  • Return on Equity of Investment -


    If you were to put $3,797, the price of 100 teak trees, into savings or CD's today at 5% compound interest and allowed the interest to accumulate for 25 years, you would have a total of $12,858 at the end of the 25 years.

    That compares to the approximately $103,000 projected cumulative harvest proceeds over the next 25 years from planting 100 teak trees.



  • Tax Implications of Investment -


    Even though your trees are growing in size and value, you will not have to report their increase in value or pay any income tax until you actually receive the proceeds from the sale of your hardwoods.

    This is unlike many other investments where you have to pay tax on the interest you earn each year, even if the interest is not paid out to you.
    <-- Small hint


  • For Real? -


    Yes. Growing tropical hardwood trees is definitely an investment that qualifies for your IRA. Many of our tree owners have chosen to have us grow trees for their IRA.


  • Liquidity of Investment -


    You have the right to sell or transfer your trees at any time to whomever you choose. We will be happy to assist in preparing appropriate transfer documents. We cannot guarantee the sale or value of your trees, but because we are constantly in contact with tree owners and others interested in owning trees, it is possible that we may be able to help find a buyer for your trees.


  • Political Climes surrounding Investment -


    Costa Rica is a government of laws, and like the U.S., the Costa Rican constitution guarantees human rights, private property, and equality before the law - for Costa Ricans and non-Costa Ricans alike.

    Costa Rica has enjoyed this long-standing stability for several reasons. No part of the Costa Rican population has ever been subjugated, so there is no class division, no resentment. There is a large, strong, active middle class, and prosperous individuals, including foreigners, are respected for their hard work and success.

    Also, Costa Rica has dedicated its resources to education. There is no army here, and there are more teachers than policemen. Free and obligatory public education has been mandated by Costa Rica's constitution since 1869.


  • Elected officials of Interest in said Policital Climes -


    Costa Rica has enjoyed more than a century of democracy and peace. It is the oldest democracy in all of Latin America.

    Like the U.S., the Costa Rican government consists of three branches, the executive - the presidency and ministries, the judicial - the supreme court, and district and appellate courts, and the legislative branch - their assembly or legislature.

    The president, two vice presidents, and the legislators are all elected to four-year terms in free, direct popular elections. Each president can serve only one four-year term. Candidates run for office in a multi-party political system and no single party dominates.




  • Risk Factors associated with Investment -


    Although hurricanes have occasionally struck the Caribbean side of Costa Rica, an 11,000 foot mountain range runs north and south through the center of the country, sheltering the Pacific side where our tree farms are located. From all we can determine, no hurricane has ever struck in the area of our tree farms. However, localized flooding from hurricane-related heavy rains has occurred.

    ...


    Forest fires are not normally a problem in the humid tropics. In these humid tropical areas, where trees and forest are growing the natural moisture and humidity are retained. For example, when farmers clear their land of forest, they first cut the trees and let them dry in the hot sun for weeks or months before they can burn the area being cleared. Even so, our workers keep the areas around our trees clear of brush and debris.

    ...

    We have chosen only those species which thrive in the area of our plantations and for which there are no known problems of pests or disease. Even so, our foresters and workers will continue to monitor all of the trees, and can respond quickly at the sign of any problem.



  • Saturation of Marketplace -


    There are several other commercial growers enjoying the political stability and lush growing conditions in Costa Rica. For example, U.S.-based Stone Container Corp. has several large plantations in Costa Rica, some only a few miles from our farms. Stone is primarily growing gmelina, a fast growing tree whose wood is used in the manufacture of paper and cardboard.

    Also, there are several other teak plantations ranging from newly-planted, to more than 20 years old.

    Trees planted in plantations in Costa Rica have shown some of the highest growth rates in the world.




  • Resource Implications of Investment -



    Plantations today produce less than 1% of the tropical hardwoods consumed in the world. Meanwhile, nearly 50 million acres of rainforest are being destroyed every year. It is unlikely that enough plantations can ever be established to keep tropical hardwood prices from spiraling out of sight.





  • Why Favour This Particular Investment Group Over Other Investment Groups of a Similar Lineage? -

    We are planting our trees only in areas which have been previously deforested - primarily former pasture. We are carefully preserving more than 4,000 acres of existing natural rainforest on our plantations.

    ...

    In addition to the trees we are planting for harvest, we are planting thousands of trees that will never be harvested - flowering, fruiting and shelter trees to attract and feed the birds and animals, trees along the river and stream banks to protect the waterways, and permanent corridors of natural habitat connecting the areas of existing forest.


  • Notes on Frequency of Financial Reports/Prospectuses -


    After your trees are planted and marked in the field, we will send you a copy of their entry into the Tree Registry, showing the exact quantity, species and planting year of your trees, and the farm, field and rows where they are planted.

    Thereafter, we will send you copies of the Tree Owners News to keep you informed about the farms and tropical hardwoods. At least 90 days before we harvest any of your trees, we will send you a report of our foresters' recommendations of the number of your trees to be harvested, and when the harvest is planned.

    After each harvest, we will send you a precise accounting of the number of your trees harvested, the costs incurred in the harvest of your trees and the processing of your logs into marketable lumber, the amount of our care and management fee, and if you choose to have us sell your hardwoods for you, the exact amount of your net proceeds from the harvest.



  • Field Statistics relevant to Investment -

    See here



The website is owned by a couple of Vancouverites, who run a website, which is mostly blank but for a most curious phrase.

2 Comments:

Anonymous Anonymous said...

I take it you decided against investing with them. Did you find any real info on the Brunners at all?

3:55 PM  
Blogger Sabrina Garza said...

The teak trees are fast-growing plants, and quite valuable because they provide lots of benefits and resources. The good thing about investing on teak is that you’re not only making an investment for your own deeds, but also are helping in conserving forests and their associated resources.

Sabrina Garza

1:36 PM  

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