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Can this type investment opportunity in Forestry be genuine?

by renzelkouten 26 March 2009 |

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I am trying to decide where to invest some money and came across an advert for this on the Motley Fool e-mail, http://www.globalgreenservices.com/price-of-teak/, does anyone know if this company has been around for a significant amount of time, is legitimate, etc?

What are general impressions of investing in something along these lines? Are there any guarantees to my capital, i.e if i pay a deposit on this via a credit card can i get my money back if it goes wrong?

Thanks

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Intelligent47 posted
If you think about the demand for Teak, the uses are all very discretionary,eg garden furniture, yachts, decking, housing. I suspect demand is falling off a log!
There is no FSA Reg No. but this co. is clearly selling an investment.
If you want a timber investment have a look at Phaunos Timber listed on LSE.
Posted on 26 March 2009 | Love 0 loves Report
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jademg posted
Investment ownership in trees is unregulated (cf. investing in a timber derivative such as a Cambium or Phaunos timber fund which is regulated by the FSA).
This company is simply a sales agent for a costa-rican outfit - hence why it is registered in nominee names so you won't be able to find out deatails of its owners at companies house. The site provide no names appart from 'recommendations' and a photo of someone with thumbs up! (draw your own conclusions...)
The tax promises are worrying too. everyone's circumstances are different. Costa Rica has I believe a 15% withholding tax so you would need to check with a tax advisor.
This company has been registered in the past year, but if you do a quick google search you'll come across ghost entries of other agents selling a global green product in Spain and Ireland (back in 2006).
If they are an agent I would make sure they have an escrow account process so if you deposit funds the money will be kept separate until you are in receipt of the legal title to the trees. There is no proforma contract on the website so you would need to go over this in detail.
As for its promises of returns, these are not as inflated as some out there but they suggest harvesting in the early years (baby teak) which do not provide any real returns.
As for the demand for hardwoods these ARE likely to increase over a 20 year horizon: world growth applying ever-increasing pressures on the limited forest-base. Regulation will force trades to prove legality and provenance and will be favourable to plantations as opposed to natural forests.
Investing in a tree is a long term investment. As you are buying a legal title do not expect the trades to be liquid, but at least you are buying organic growth (accounting for 60% of the total returns, roughly) so you will be less buffeted by the vagueries of financial markets (cf. Phaunos fund). Hope this helps.
Posted on 28 March 2009 | Love 0 loves Report
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rebtook posted
Should Motley Fool really be pushing this type of investment?
Posted on 28 March 2009 | Love 0 loves Report
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RicC posted
This company has just advertised again through a Fool.co.uk email.

After the previous discussions, did anyone take the plunge and have any experiences to share?
Posted on 28 May 2009 | Love 0 loves Report
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devallon posted
Personally I don't think LoveMoney or the Fool should advertise financial products or investments that are potential scams. All of the questions asked by subscribers on these blogs should be asked by Foolish management.
The only possible outcome if this is a scam, apart from losses by investors, is damage to the reputation that the Fool has, and it doesn't need any tarnish. Reputations take years to build and are lost overnight - ask a politician !
Fool - stand up and be counted !! Check them out, publish an article and refuse their advertising if they are men of straw.
Rant over !
Posted on 03 June 2009 | Love 0 loves Report

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