This post includes ideas and an excerpt of analysis from the Q2 2026 Forisk Research Quarterly.

Introduction

When it comes to making choices and decisions, I think we overvalue “best,” we underappreciate “good” and “effective” and “better,” and we fail to purge “dumb.” This idea rooted itself into my brain years ago after reading a financial report that quoted the late investor Charlie Munger:

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

In writings and interviews, Munger (rhymes with “hunger”) emphasized the power and advantage associated with avoiding ignorant decisions and thinking through issues systematically. While compound interest and forests and experience grow over time in beneficial ways, dumb choices and their consequences accumulate, destroying value and ruining organizations. There are a lot of ways to do things, and Munger preached the importance of simply avoiding the dumb one.

Don’t do the Dumb Thing

Often, when puzzling through a situation or plan, I try to clarify and specify the key choices, and then gain ground by simply crossing off the “dumb” or worst path given the objectives. The dumb choice – the one that fails to account for the facts on the ground or how things actually work – can put lives, projects, progress, and organizations at risk. Choosing a better path means learning from mistakes, adjusting as conditions change, and developing a view on what might work given the constraints, physical and financial.

For investors and business executives, projects succeed and profit or fail in bankruptcy. Timberland investors need access to diverse sets of well-capitalized wood-using mills. Forest products manufacturers require sustainable, accessible, and economically viable flows of wood raw materials. Understanding reality and relative risk are more important than perfection. Good plans and ideas well implemented make money. Projects unmoored from the fundamentals lose money.

Backtest to Learn from History

At Forisk, our team studies how investment ideas, forest industry assets, and timber markets perform today and historically. We backtest models to assess previous forecasts and apply scenarios to test assumptions and sensitivities for clients. When demand for lumber goes up, what happens to the price of timber? What does this imply for timberland investors and forest products firms across geographies?

Each edition of the Forisk Research Quarterly (FRQ), in addition to updated timber price forecasts and analysis of forest industry sectors, includes an appendix with rolling Forisk forecasts by year versus actual results for housing, lumber, pine sawtimber prices, and Douglas-fir #2 sawlog prices. This ongoing, transparent scorecard reinforces the importance of logic, continuous improvement, and ownership of our applied research so that clients have viable projections to support their investment decisions.

For example, in Q1 2021, the FRQ forecast for South-wide pine sawtimber prices was $26.55 per ton for 2025. The actual South-wide price in 2025 was $25.47, or 4% lower. For Douglas-fir domestic #2 domestic sawlogs in Coastal Washington, the forecasted price in Q1 2021 for 2025 was $755.68 per MBF, while the actual price for last year was $740.47, or 2% lower. Scanned over time and compared to changes in the macroeconomy or locally through custom market forecasts, we can better identify and set aside the worst (“dumb”) options for given investments and prioritize the best opportunities.

Conclusion

Forecasting and timber market assessments require arbitrary choices, from the quantitative techniques applied to the qualitative judgments for framing results. As such, we can leverage the available information through testing and tracking prior performance to evaluate rigor, learn, and improve. The systematic testing of priors and models helps us avoid irrational ideas and investment decisions moving forward.

There are a lot of ways to do things. To paraphrase Charlie, don’t do the dumb one.

To learn more about the Forisk Research Quarterly or Custom Market Forecasts, contact Nick DiLuzio (ndiluzio@forisk.com),