Ten Good Reasons To Invest in Panama Teak Forestry
Friday, November 04 2011 @ 10:58 am EDT
Contributed by: Don Winner
Related Articles and Additional Information:
- Carbon Sequestration by Teak Trees in Panama - YouTube Video
- Panama Teak Forestry - YouTube video shot on the plantations with Jeff Duda in August 2011.
- Burning One Gallon of Gasoline - Produces 19 Pounds of Carbon Dioxide - Makes 5.5 Pounds of Teak - Panama Guide article, 19 October 2011
- A Couple Of Days In The Interior - Looking At Teak Plantations - Panama Guide Article, 3 October 2011
- Invest In A Teak Plantation in Panama - Solid Returns, Safe, Growing Steadily - Panama Guide Article, 16 September 2011
Ten Points – Investing in Plantation Teak in Panama:
- 1. Confidence Inspiring Management – Jeff Duda is the President of Panama Teak Forestry, and I’ve known personally as a friend for many years. Many crooks, thieves, and scam artists have used Panama as their base of operations over the years, and I have an established track record of going after those kinds of guys and tracking them down. For example – Richard D. Cover who is now in prison in Pennsylvania, and Jeff Mowen – who stole more than $50 million dollars from his victims - is now in prison in Utah. They are both behind bars thanks to this website and tips from readers. So, I know the difference between the good guys and the bad guys, and Jeff Duda is a guy you can trust, based on proven performance. And that takes me to my second point…
- 2. There are currently about 70 investors in Panama Teak Forestry. This is not a new operation, nor is it a startup. A lot the hard work has already been done. Jeff came to Panama about ten years ago and started working on the Panama Teak Forestry concept. The company itself was founded in 2004. The initial seed capital came from Jeff using his own money, and that of his friends. Since then they have attracted other investors. And here’s the difference – they have responsibly used those investments to purchase land, plant teak, build a sawmill, build a kiln to dry the wood, and to start herds of sheep and cattle to run on the land. And now after almost twelve years of work they are ready to embark on another expansion program. The ultimate goal is to expand and reach a point where they have enough land and teak planted to allow for an annual harvest of mature 25 year old trees, and to be able to sustain that level of production forever. That’s the company’s strategic goal, and they are working towards the attainment of that goal. And the fundamental point remains – a lot of the work has already been done.
- 3. Currently Undervalued – Here’s my favorite part of this story. Jeff currently has the company valued based solely on the value of the land the company holds – about 750 hectares total – and the log value of the teak trees they have planted. The company has already planted more than half a million teak trees on about 550 hectares of land. Right now, today, Jeff has not figured in any value to the company’s stock to account for the existence of the sawmill, the kiln, or the ability to export teak lumber for sale on the international market. Raw teak logs are worth much less than finished lumber. The holdup right now sounds simple – to get the electricity connected to the kiln so they can dry the first container load of wood for export. I know, it sounds simple, but this is Panama. Progress is being made, but it’s a slog through the bureaucracy. Anyway, the goal is to export the first container of teak lumber before the end of this year. Once the kinks and bumps of the procedures are worked out, then during 2012 hopefully Panama Teak Forestry will be able to export approximately two containers full of lumber per month, minimum. This is very important because once that starts to happen, for the first time the company will be cash flow positive. All of these years the money has been going one way – in. Now, finally, that investment will start paying off. But paying off, how much?
- 4. Steady guaranteed return on investment at 12% per year: If you decide to invest your money in gold, for example, your investment can gain value only if the value of gold goes up. If you put an ounce of gold on the table and let it sit there for ten years, at the end of that time you will still have exactly one ounce of gold. But it’s different with an investment in plantation teak because the trees are constantly growing. The trees grow and produce about 12 cubic meters of new wood, per year, per hectare, and that’s a lowball estimate – the actual numbers will probably be higher. But anyway, the important concept here is that the trees are constantly growing and the price of the shares of stock increase by 1% per month based on that growth rate – guaranteed. In November 2011 the price per share was $1,178. Now in November 2011 that’s gone up by 1% and the price per share is currently $1,189. Just like clockwork – the trees are growing, and that growth is figured into the value of the company, as reflected in the price per share.
- 5. Recession Proof: Teak trees growing on a plantation in Panama really don’t care if the stock market goes up or down. They don’t care about Fanny Mae or Freddie Mac, politics, budget deficits, national debt, foreclosures, or bankruptcies. They are just trees, and they keep on growing. Teak is the ultimate “recession proof” investment because it’s sheltered and protected from all of those outside influences causing grief, stress, harm, and strife among other types of investments. If you’re the kind of person who is losing sleep over your investments, with an investment in Panama Teak Forestry you can relax, safe in the knowledge that the trees are still growing happily away, no matter what.
- 6. What If I Have An Emergency? There’s always a possibility that something might happen. Anyone can experience a short term need for emergency cash. Panama Teak Forestry has a stock buyback program. They will buy your shares back from you at any time, at 10% off the purchase price. Therefore, if you make an investment of $50,000 (for example) in November 2011 and wait ten months, your share value would have increased to a total of $55,000 – at a rate of 1% per month, guaranteed. Then if for any reason you decide to take advantage of the stock buyback program, as long as you wait a minimum of ten months you will still be making something on your investment. If you wait three years for example the value of your investment would have grown to more than $70,000 dollars. And of course you also have the option of selling your shares yourself to someone else.
- 7. Land values going up: There’s another point I wanted to touch on briefly. Land values in Panama continue to go up. Right now Panama Teak Forestry buys burned out cattle land and plants it – reforestation – with 1,100 teak trees per hectare. As I said before they already own more than 750 hectares of land, and of that 550 hectares have been planted with teak, and there are growth and expansion plans to buy more land and plant more teak. When they select the land to buy, they always have an eye on the possibility of a future increase in the value of land for other purposes. For example, there’s one parcel of the plantation that’s near the ocean and a very nice beach. Right now there’s not enough development of the infrastructure to allow for any kind of a residential or tourism development. But who knows what’s going to happen it 25 years when those trees are mature and harvested? That particular parcel of land was purchased years ago at $4,000 per hectare, and recently land in the same area has been sold for $10,000 per hectare, or $10 per meter. In some places in Panama – areas closer to infrastructure and development – similar land is selling today for $125,000 per hectare or more. So anyway, the land owned by Panama Teak Forestry is also getting more valuable every day.
- 8. Good for the environment: I did another recent video about carbon sequestration by teak and the environmental impacts of plantation teak. Jeff Duda of Panama Teak Forestry is the “ultimate tree hugger.” Everything they do is designed to improve the soil and to make the land “healthy” again. I’ve been with Jeff on the plantations many times, and you can stand at the fence line to compare the relative health of the land right next door – burned out cattle land owned by someone else, and the Panama Teak Forestry land managed by Jeff and company. Without a doubt these teak plantations are improving soil conditions and sequestering massive amounts of Carbon Dioxide gas from the atmosphere, in a very responsible manner.
9. Other aspects like cows and sheep: When Jeff started doing this the “conventional wisdom” was that you supposedly can’t run cows and sheep under the trees because they will damage the plantations and stunt their growth. Rather than simply accepting that at face value – Jeff started experimenting at their Llano Grande plantation. They fenced off smaller sections of teak and ran the cattle and sheep under the trees. It turns out that in fact you can run both sheep and cattle under the trees – they don’t harm the trees at all. By using all natural fertilization techniques you end up with organic beef, lamb, and mutton. Jeff is still working out all of the details but eventually the size of the herds will grow to whatever the land can support – with the primary emphasis remaining on the teak business. It’s “teak first, cows and sheep second.” But still, this is another important money making aspect of the business from an investment point of view.
- 10. Production and exports are about to commence: After all of this work that’s already been done, Panama Teak Forestry is on the verge of actually exporting teak lumber and selling it on the international market. But they’re not going to simply dump the lumber on wholesalers or dealers. Rather, they are going to establish a distribution network in the United States, in order to remove as many middle-men as possible and to sell the lumber directly to the end users at the retail level. This strategy will maximize the price earned per board foot of lumber produced, in turn maximizing profits for the company.
So now is the time to get in: It’s a good deal, the math and numbers are excellent. Panama Teak Forestry is an established company that operates in a transparent manner, professionally managed by confidence inspiring professionals. If you would like more information, send me an email: firstname.lastname@example.org or give me a call on my Magic Jack US number – (845) 514-9893, or on my cell phone in Panama +011 (507) 6614-0451.
Copyright 2011 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.