What is the Pinchot Retirement Plan?

A question from Yahoo! Answers:

What six companies are listed on the NYSE that make up the Pinchot Retirement Plan?

“Pinchot Retirement Plan” means different things to different people.

The original Pinchot Retirement Plan (the retirement plan for the employees of the state of Pennsylvania established by governor Gifford Pinchot in 1923) is now known as Pennsylvania State Employees’ Retirement System and has a $30-billion multi-manager portfolio that contains way more that six stocks (in fact, U.S. stocks account for about a third of its portfolio):

http://www.sers.state.pa.us/sers/lib/ser…

The six companies you mention have relatively little to do with Pinchot. This is a list of timber REITs that supposely practice Pinchot’s approach to forestry management which he developed while managing Biltmore estate in North Carolina for George Vanderbilt. The list has been compiled by an investment newsletter publisher named Steve Sjuggerud. He’ll give it to you, if you subscribe to his $99/year True Wealth newsletter. One company from the list that he names in his marketing materials is Plum Creek (NYSE:PCL).

The problem with Sjuggerud’s claims is that PCL is far from the risk-free cash machine he portrays it and similar companies to be. In 1996-98, in particular, the company had a negative net worth and was vulnerable to all kinds of legal risks. Also, most of PCL’s stellar returns occurred in the first five years since its IPO. The company went public at $7.50 a share (adjusted for splits) in mid-1989 and hit $30 a share in early 1994. Current price? $35.80.

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