Timber Appears to be Overpriced

By on August 10, 2009

Andrew Barry at Barron’s has written an article about the likely overpricing of timberland. Timber became popular with investors of university endowments over the past decade; also, Jeremy Grantham has focused attention on this once-underappreciated asset class. It seems probable that many have piled into timber at the wrong time and it could be due for a fall.

SMA Comment: The SMA portfolio has benefited from the relative outperformance of long-term holding Rayonier, which has also paid a generous dividend. Due to poor timing of the purchase of another timber holding, Weyerhaueser, that position remains underwater.
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