This post includes themes from the (virtual) Applied Forest Finance course on March 31^st, 2026. Early registration ends March 17^th! Class attendees also receive eBooks for the 7^th Edition of Forest Finance Simplified* and 2^nd Edition of Aunt Fanny Learns Forestry*!

Several years ago, I had lunch with a private investor who operates in a niche of the timberland investing world. He was testing ideas about expanding his activities into new assets and markets. “I could really do well there, too,” he said before asking for my opinion.

“Here’s how I see it. You have made a lot of money by being really good and focused on two particular things in timber. You know the people, geography, risks, how things actually work,” I replied. “You don’t have the same advantages in these other markets.”

We went on to talk about the power of insight and long-term context, and agreed that we can get overly enamored with our success in one field by forgetting how long it took us to develop a network and baseline of understanding to get things done in the first place. Over time, we build the expertise to find, assess, and create value in our respective professions.

This story came to mind as timberland investors and managers – struggling to digest the implications of soft housing markets, unwelcome mill closures, and uncertain policies – revisit the risk-and-return fundamentals associated with timberlands. These conversations often culminate with questions like:

Do our reasons for holding timberland still apply? Does the investment thesis still hold?

My thinking on this starts with reviewing the reasons. Why did you invest in timberland originally? What was the thesis? Recency bias and startling headlines can sometimes muddy current thinking when it comes to long-term decisions and commitments. If the investment helpfully diversifies the portfolio and generates cash consistently relative to other opportunities, then ignore the noise and focus on other issues. Your timberlands, in most cases, are doing what they are supposed to do.

That said, the value and management of the timber assets we own or consider, given disruptions in local wood baskets and regional end markets, can change.

• Should we thin once or twice?
• What is the optimal forest rotation given changes in the market?
• Do we harvest this stand now or later?
• What is an appropriate discount rate?
• How do we think about the buying and selling of timberlands moving forward?

 

For these questions, the tools of finance help us assess whether each forest investment opportunity or timber harvesting alternative meets our specific objectives.

*Updated Books on Forest Finance

Forisk Finance Simplified, 7^th Edition

This book distills forest finance themes into a question-and-answer format for those who want an accessible reference for analyzing timber investments and making forest management decisions. The new 7th Edition includes additional content on selecting financial criteria, benchmarking timberland investments, and evaluating financial statements.

Why read Forest Finance Simplified? (19 second video)

Aunt Fanny Learns Forestry: Managing Timberland as an Investment

Aunt Fanny is sharp, wants to learn, and enjoys making a little money. However, her recently inherited forestland is a mystery to her. This 2^nd Edition, with drawings by taxidermist Max Lang and a cover by Heather Clark, follows Aunt Fanny as she gets to know her forest, learns investment concepts, and implements a forest management plan. The book serves any investor interested in a tight and entertaining tutorial for prioritizing what matters when managing their timber as an investment.

Aunt Fanny Learns Forestry 2^nd Edition promo (41 second video)