Thursday, March 25, 2010

Why is teak so valuable?

Teak has been used for 100's of years because of its hardness and durability. A natural oil occurring in teak wood makes it very resistant to pests and rotting and in turn this led to its popularity in boat building, a popularity which continues today.

Natural teak takes approximately 20 years to reach a suitable size for harvesting and commercial use. Some recently developed teak hybrids grow more quickly and take 15 years to reach a size suitable for harvesting.

Teak, however, is not a perishable commodity and the teak can be allowed to grow on beyond the 15 or 20 years and then harvested. In the meanwhile the trees have grown further and become even more valuable.

An interesting and little discussed fact about teak trees is that after felling the stumps will grow again and typically these stumps grow faster and produce more of the very valuable dark heartwood.

Currently milled teak fetches about six times the price of pine wood, four times the price of cherry wood and twice the price of mahogany.

A number of factors come into play in pricing teak:

- Growth Rate: teak is slow growing

- Supply: currently more than 95% of the world's teak comes from non-sustainable jungle sources. As world opinion has moved against the logging of our jungles supply of teak has fallen.

- Demand: teak remains in high demand and is particularly popular in the emerging economies of China and India.

World opinion continues to move against logging our jungles and Australia is currently considering making the import of illegally logged timber a criminal offense. Other countries look sure to follow Australia's lead.

Demand for timber is linked to world population growth and demand for teak will continue to increase inline with the world population growth. Demand will be further fueled by the emergence of new economies where teak is particularly popular.

Timber has been a steady performer over the last century and has typically out performed inflation by 3.2% per annum. Teak as a niche product has outperformed timber. Until sustainable teak production fills the demand for teak, teak looks to increase even more strongly in price over the medium term

Sunday, March 21, 2010

Why I'm Becoming A Tree Hugger by Chris Hunter

This great article was published in International Living and written by Chris Hunter

On Saturday, December 6, 1941, few Americans had any idea that their country was about to be plunged into war.

The following day, Japan’s “Operation Hawaii”—what became known as the Pearl Harbor attack—killed 2,402 Americans and plunged America into war against Japan and Nazi Germany.

Right now, mainstream investors have a similar view of the world as Americans did before that fateful day in December 1941. Although they know a crisis has struck (back then it was the outbreak of war between Germany and Britain; today it is the 2007-2008 stock market crash) they feel safe in the knowledge that everything is “under control.”

This is why so many investors are choosing to place their savings in U.S. government bonds—traditionally thought to be “safe havens.”

Unfortunately, given the jaw-dropping rise in America’s national debt (which is predicted to exceed the nation’s entire economic output in just two years) these traditionally “safe havens” are about as safe as Pearl Harbor was in 1941.

The fact is we tend to base our view of the future on past experiences. And if you were born during the two decades after the war, the past has been, broadly speaking, good to you.

In the great bull market the 1980s and 1990s, stocks trended upward and handsomely rewarded buy-and-hold investors. And America’s debt was relatively stable.

This is the pattern boomers naturally expect to resume once this crisis is over.

The problem is this resumption to “normality” is a pipe dream. Take a look at this chart from David Rosenberg, chief economist and strategist at Gluskin Sheff. It shows that, for the last 12 years, U.S. stock markets have been extremely dangerous places to put your money—swinging wildly from extreme highs to extreme lows.

My beat is long-term wealth protection. That means finding sustainable wealth-building alternatives to volatile stocks and soon-to-be toxic U.S. government debt.

One solution is timberland, for two reasons.

1. Timberland is a great hedge against inflation. Over the last century timber prices have outrun inflation by an average of 3.3%.

2. Timberland is a great way to diversify your investments. Timberland does not move in step with stocks. So when stock markets dive, timberland remains relatively stable. For example, in 2008 the S&P 500 index of U.S. stocks plunged 38%. But timberland rose by 9.5%.

In other words, timberland is great portfolio insurance. It gives you peace of mind that if we do get another leg down in stocks—another Pearl Harbor-style surprise attack from, say, a default by Greece or a blow-up in China’s real estate market—your investments won’t take a big “hit.”

There are a number of publicly traded companies that allow you to invest in timberland, such as Plum Creek Timber (NYSE:PCL) and Rayonier (NYSE:RYN). But these carry significant risks, particularly their tendency to use large amounts of leverage.

I’m exploring a much more direct way to invest in timberland through one of our strategic partners at Bonner & Partners Family Office, the wealth protection society set up by IL’s founding publisher last year.

It’s a Latin American investment company that manages not only timberland, but also vineyards. And it means our members will have the opportunity to buy timberland for up to one hundred times less than in North America.

Editor's note:Bonner & Partners Family Office is a wealth preservation forum for people who are serious about their money. If you think you could make use of the research and contacts available to Bonner & Partners Family Office members, let us know.

To read the full article in International Living just click here

If you would like to diversify your investment portfolio have a look at Nature Walk our most recent project, which combines the safety of a teak timber investment with the huge potential of development land with seaviews close to Jaco.

Thursday, March 18, 2010

Irish have made their marks on Latin America, too

By Christopher Howard* Special to A.M. Costa Rica

Saint Patrick's Day is an annual feast day that celebrates the most commonly recognized of the patron saints of Ireland and is generally celebrated today, March 17.

Legend has it that St. Patrick became the patron saint of Ireland for, among other things, raising the dead and driving snakes out of Ireland. In the United States, drinking has been the way of celebrating St. Patrick's Day since it originally began. The excuse for drinking came from a rumor that Saint Patrick brought the art of running a distillery to Ireland.

The shamrock became a symbol of the celebration because it is said that the saint used it to explain the Trinity (Father, Son and Holy Ghost or Spirit) as he converted the Irish to Christianity.

Saint Patrick's Day is celebrated in many places in Latin America, including Costa Rica. There is usually some type of Saint Patrick's Day celebration at any of the local bars where Americans hang out.

You will be surprised to know that there have been many prominent Latin Americans of Irish descent. Probably the most famous was Bernardo O'Higgins Riquelme (Aug. 20, 1778 - Oct. 24, 1842). O’Higgins was a South American independence leader who, together with José de San Martín, freed Chile from Spanish rule in the Chilean War of Independence. O’Higgins was granted dictatorial powers as supreme director of the country Feb. 16, 1817, and on Feb. 12, 1818, Chile was proclaimed its independent republic through the Chilean Declaration of Independence. For six years, O'Higgins was a largely successful leader, and his government initially functioned well. In time, however, he began to alienate important political factions. Eventually he was deposed in 1823 due to a growing opposition. O'Higgins lived in exile for the rest of his life.

O'Higgins is widely commemorated today, both in Chile and beyond. The Chilean village of Villa O'Higgins was named in his honor. The main thoroughfare of the Chilean capital, Santiago, is Avenida Libertador General Bernardo O'Higgins. There is even a plaque in his honor in Merrion Square in Dublin as well as a bust in Parque Morazán in San José.

Another famous Latino of Irish ancestry was Antonio Rodolfo Quinn. Most people know this late actor by the name of Anthony Quinn. One of his most famous roles was that of Eufemio, Emiliano Zapata’s brother, in the movie classic “Viva Zapata!” starring Marlon Brando. The screenplay was written by John Steinbeck.

A notable arm of the Mexican Army during the Mexican-American War was The Saint Patrick's Battalion (Batallón de San Patricio). It was a group of around several hundred immigrants of European descent (made up primarily of ethnic Irish and German Catholic immigrants), who fought as part of the Mexican Army against the United States in the Mexican-American War of 1846 to 1848. Most of the battalion's members were deserters from the U.S. Army. The majority of these men were immigrants who had arrived at northeastern U.S. ports, as part of the Irish diaspora to escape the Irish Potato Famine and extremely poor economic conditions in Ireland. Therefore, many chose military service because other jobs were not available to them.
Hanging San Patricio members
Painted in the 1840s by Sam Chamberlain via Wikipedia
Some 30 members of the San Patricio unit were hanged as deserters Sept. 13, 1847,
as U.S. troops stormed and captured Chapultepec Castle. This is a contemporary painting.

Considered traitors at home, there are several theories as to why the immigrants fought for Mexico. First, the Mexican government offered incentives to foreigners who would enlist in its army: it granted them citizenship, paid higher wages than the U.S. Army and gave generous land grants. Others say it was due to the mistreatment of immigrants by their Anglo-protestant officers and prejudice in the military. Some historians believed a primary motivation was the Catholic religion they shared with the Mexicans and sympathy for the Mexican cause, likely based on similarities between the situations in Mexico and Ireland. For many Mexicans The Saint Patrick’s Batallion is still fondly remembered and its members considered heroes.

Mexicans hold the Irish in very high regard. St. Patrick is the patron saint of many towns in Mexico. The three joined towns of Melaque, Villa Obregon, and San Patricio celebrate St. Patrick’s Day with the Fiesta del Torros. The festivities include rodeo events, bullfights, parades, folk dancing, and fireworks.

Here is Saint Patrick’s Day vocabulary in Spanish:

Bagpipes (Irish uilleann pipes bag) - La gaita irlandesa

Clover — el trébol

Corn beef and cabbage — Carne acecinada y repollo (cabbage). Please don’t confuse acecinada with asesinada which means assassinated. Acecinar means to salt meat, dry it and then smoke it.

Emerald green — verde esmeralda

Emerald Isle — Irlanda

Gold — oro (metal), dorado (color)

Green — verde

Ireland — Irlanda

Irishman — irlandés

Irish woman — irlandesa

Legend — la leyenda

Leprechaun — duende or gnono

Lucky — afortunado, suertudo

March — marzo (the month)

Parade — el desfile

Patrick — Patricio

Pot of gold — La olla or perol de oro

Rainbow — el arco iris

Saint — el santo

St. Paddy's Day — el día de San Patricio

St. Patrick — San Patricio

Snake — la serpiente

Shamrock — el trébol

Walking stick — bastón

Wish — el deseo. Pedir un deseo is to make a wish

* Christopher Howard, who has a master's degree in linguistics and Spanish, is the author/publisher of the 16th edition of the perennial bestselling "The New Golden Door to Retirement and Living in Costa Rica," "Guide to Real Estate in Costa Rica" and the one-of-a-kind "Official Guide to Costa Rican Spanish." He also is a relocation and retirement expert who conducts custom and group retirement/relocation tours every month. For information: Articles similar to the above may be found at

Sunday, March 14, 2010

Just how much is teak worth?

We are often asked how much teak is worth in comparison to other more common timbers and below is a price list from a US timber mill.

As you can see, teak is priced at US$28.75 per board foot and this is 6 times the price of pine wood (US$4.75), over 4 times the price of cherry wood (US$6.85) and more than twice the price of mahogany (US$12.30).

Why is teak valued so highly, quite simply it is a very beautiful, high demand timber which is in short supply.

Wednesday, March 10, 2010

Australia Considers Making Import of Illegally Harversted Timber a Criminal Offence

The Government of Australia is considering making the import of illegally harvested jungle timber and tropical hardwoods a criminal offense.

The Australian Government estimates that over US$850 million of illegally harvested timber products are imported into Australia every year.

However Australia is not the only country cracking down on illegally harvested timber and this necessary banning of the use of illegally harvested jungle timber will put significant upward pressure on the price of sustainably produced tropical hardwoods in the medium term, until enough sustainable plantations are matured to fill the supply gap.

To read the full story about Australia's proposals in the Sydney Morning Herald, click here

Monday, March 8, 2010

Costa Rica further improves its Environmental Performance Index ranking

Costa Rica has been ranked number three in the world in Yale Universities 2010 Environmental Performance Index Ranking.

Costa Rica has improved it’s EPI year on year improving from 5th in 2008 through to this years ranking of 3rd worldwide.

The Environmental Performance Index ranking is prepared yearly by Yale University and is based around Estimates Ecosystem Vitality, comprising climate change, agriculture, fisheries, forestry, biodiversity and habitat, water and air pollution and estimates of Environmental Health comprising environmental burden of disease, air pollution and water.

The 2010 Environmental Performance Index (EPI) ranks 163 countries on 25 performance indicators tracked across ten policy categories covering both environmental public health and ecosystem vitality. These indicators provide a gauge at a national government scale of how close countries are to established environmental policy goals. The EPI’s proximity-to-target methodology facilitates cross-country comparisons as well as analysis of how the global community is doing collectively on each particular policy issue.

Costa Rica intends being Carbon Neutral as a nation by 2021 and they are on track to achieve this audacious goal.

To see the full list of countries and see where your home country ranks just click here

Thursday, March 4, 2010

Rumblings from the Arenal Volcano

The Tico Times reported a small eruption at the Arenal Volcano yesterday.

The eruption led to some small avalanches and also some small fires as hot lava reached the tree line.

Arenal National Park remains open and La Fortuna, at the base of the Arenal Volcanoe, is not at risk.

To read the full story click here

Meanwhile the Global Disaster Alert and Coordination system noted a change in the Poas Volcano 30km from San Jose and issued a green alert (no significant eruption expected).

To read the full alert warning click here