"Grantham recommends timber as the "best" long term investment & I notice David has taken long position.

"Do you know how Australian investors can go long timber without using futures or tax based agricultural schemes of uncertain integrity?"

Eoin Treacy's view Thank you for this informative email and the link to Jeremy Grantham's recent report. Timber has a number of attractions for long-term investors seeking a relatively high yielding, non-correlated asset. Unfortunately, Australia, which is blessed with abundant resources of just about every globally significant commodity, does not have a great deal of standing timber when compared with exporters in the Northern hemisphere. I'm afraid I do not know of an Australian listed timber fund or of any significant Australian lumber companies. However, this is a global strategy service and I have profiled a number of lumber companies in the Comment of the Day over the last year, the last of which appeared on October 13th.

When investing in timber, there are two primary options. The first would be to simply purchase acreage and let the timber grow. The second is to invest in lumber companies that profit from cutting, processing and selling the timber for the best possible price.

The Phaunos Timber Fund appears to invest primarily in standing timber rather than purely lumber companies. It is listed in London, denominated in US Dollars and currently trades at a discount to NAV of 39%. It holds 42% of its assets in cash. I suspect, the discount will narrow as more of its cash is deployed, which it has so far been slow to do. The price has rallied to test the upper side of the two-year base and a sustained move below 70p would be required to question medium-term upside potential.

Rayonier remains one of the better performers in the sector and pays a dividend of 4.19%. It hit a new high this week and a sustained move below $45 would be required to question medium-term upside potential.

West Fraser Timber has rallied impressively this month to retest the May highs and a sustained move below the 200-day MA, currently near C$37, would be required to question medium-term upside potential.