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This is the first in a series related to Forisk’s Q3 2017 forest industry analysis and timber price forecasts for the United States and Canada. There is a tendency to cherry-pick forecasts. A market forecast can be used to serve more…
Mid-way through a ninth year of increasing housing starts and growing lumber consumption, timberland investors and forest owners in the U.S. South continue to struggle with flat and, in certain local markets, falling sawlog prices. Previous posts discuss how this more…
This is the fourth in a series related to Forisk’s Q2 2017 forest industry analysis and timber price forecasts for the United States. From 2009 through 2016, U.S. housing starts increased 112%, a compound annual rate exceeding 11%. Over this more…
This is the second in a series related to Forisk’s Q2 2017 forest industry analysis and timber price forecasts for North America. This week, the U.S. imposed a 20% tariff on the imports of softwood lumber from Canada. Tariffs are more…
This is the first in a series related to Forisk’s Q2 2017 forest industry analysis and timber price forecasts for the United States and Canada. In our work, we apply forward-looking scenarios to our understanding of the “facts on the more…
Financial analysis depends on two basic concepts from utility theory. One, we prefer more money rather than less. Two, we prefer dollars today rather than dollars tomorrow. Not only do these principles hold for everyone from kindergarteners to investment bankers, more…
How do we value bare, naked forestland? Timberland investment models and appraisals often use a special application of net present value (NPV) called bare land value (BLV). Also known as land expectation value (LEV) or soil expectation value (SEV), BLV more…
In 1990, Nobel Prize-winning economist Daniel Kahneman and two colleagues published a study documenting how we can “overvalue” things we already own (D. Kahneman, J. Knetsch and R. Thaler, “Experimental Tests of the Endowment Effect and the Coase Theorem,” The more…
A few notes and two questions to ask when applying and interpreting IRR. Internal rate of return (IRR) reflects the compounded return produced by an investment or capital project. IRR is best used in tandem with other measures, such as more…
Albert Einstein, the smartest guy most of us never met, said, “The hardest thing in the world to understand is the income tax.” [Fascinatingly, this quote, along with others, can be found on the IRS website here.] Taxes matter in more…