Yes, yes, yes – we know. The system is broken. Everything is falling apart. The rich are getting richer and the poor are getting poorer. Blah, blah, blah…
But when you live on a rural highway, and the sun is out, and you see fully-loaded log trucks rumbling toward the mills again, it makes you think. We are too complicated and strong and smart as a nation to be beaten down by the urban doom and gloomers.
For most urban folk, the world is a dark and dangerous place. Don’t believe this? Listen to the news every morning. People dying in auto accidents and drowning right and left, cops hitting protesters (sure, they asked for it, but still, it’s disturbing to see public servants hitting people), murders, thefts, burglaries and more. And repeated every half hour or even every 20 minutes. Who wouldn’t be depressed?
But watching the log trucks makes us realize two things: this is insider information. Clearly the economy is picking up. And this is a highly complex economy.
And the pace of truck trips has picked up. The logs are going to mills which need them to make lumber, paper and other wood products. The mills are filling orders from builders, remodelers, newspapers, and other users of these products.
Investment tip: if you have a long investment horizon, steady nerves, and a regular, reliable income, investing in timberland isn’t a bad idea. When the economy turns down, you just let the trees sit there and grow. The longer the trees grow, the bigger and hence, more valuable, they get. To the best of our knowledge, that growth isn’t taxable until the trees are logged.
It’s a bit tougher for the mills. But they can smooth out economic bumps by buying logs when they are cheap (somebody didn’t have enough income to wait out the recession!) and using them when the orders come back.
Now this is a highly simplified version of the wood products business, but you get the picture. So, enjoy! Life is getting better!