Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (39358)	9/21/2010 11:06:23 AM
From: Jurgis Bekepuris	Respond to of 78714

Yeah, I was thinking about mentioning cash flow and then forgot. :) Farmland/RE works better if the cashflow yield is high. Then there is some rational basis to appreciation and good money even without appreciation. Most of the RE - AFAIK, I'm not an expert - did not get to very attractive CF multiples. I have no clue if any of the farmland is trading at good CF multiples. At least CF is advantage over things like collectibles or commodities that don't have CF at all.

To: Spekulatius who wrote (39358)	9/21/2010 11:56:11 AM
From: E_K_S	Read Replies (1) \| Respond to of 78714

Re: Farmland I wonder if there are any REITs that specialize in Ag Production & farm management? I did find this agroreit.com. The closest thing I own is Plum Creek Timber Co. Inc. (PCL) which is an REIT Trust that owns owns and manages timberlands in the United States. They own and operate approximately 7 million acres in 19 states. plumcreek.com They generate some of their cash flow doing conservation exchanges. 1.3 million acres have been committed to conservation through conservation sales, easements and land exchanges. They can periodically harvest the timber on these parcels but for a guaranteed cash flow have agreed to not develop or sell these properties. It's been an ok investment generating on average a 5% return in my IRA. I probably should average down as the shares I bought in January 2008 are selling about 12% lower today. I do think a well managed Agriculture REIT w/ properties diversified around the world might do well. Their land assets would provide a good hedge against inflation and the cash flows generated from their crop(s) production should produce a reasonable dividend stream for the investor. EKS

To: Spekulatius who wrote (39358)	9/22/2010 8:32:26 AM
From: gcrispin	Respond to of 78714

I own farmland. It's been with my family for over a hundred years and I lease it out. All farmland in my area is leased for a portion of the crop. So your yield will be as good as the weather and the farmer. All farmers are not created equally. It goes without saying that neither is their machinery. It's a simple investment with few moving parts. However, it isn't for someone who isn't involved with the culture. Most good farmland is bought up by the largest farmers. The four families in my area just keep expanding their land holdings when a parcel comes up on the market, especially anything that shares a border to their land. So I don't see it as a viable investment for the novice. The family that leases my land has been farming it since the thirties. If you switch farmers, you better know what you are doing.