Healthy Competition (Part 2)

What is a “wolf tree”?

Photo: Michael Gaige. Source: American Forests

A wolf tree is a large forest tree with a wide-spreading crown. We often find them in the middle of a dense woods, and they seem to contradict the notion of “crown shyness.” There’s nothing shy about these giants. They appear to push everyone else out of the way. But that’s an illusion. They’re older than the stand around them, sometimes by several centuries. They have gnarled and broken limbs, and the forest floor around them is littered with deadfall that comes from storm damage and decay. They’re not pushing the other trees away, the younger trees are encroaching on them.

Wolf trees are an historical artifact. Two hundred years ago, most of the landscape was cleared for pasture or hayfields. Often, the farmer would leave a solitary oak or maple on the field’s border to provide shade and shelter for livestock. In the absence of competition, these lonely sentinels would grow out as well as up. But as the Northeastern economy shifted away from agriculture, the pastures were abandoned and the forest came back. These trees would gradually become surrounded by saplings, and later, a mature stand.

Wolf trees are an integral part of the eastern forest, and they’re a visual reminder that history matters. They certainly wouldn’t grow up like this in the current environment, but they’re an important element of the current ecosystem, providing habitat and food for a host of forest creatures.

We sometimes see elements like this in the competitive landscape: businesses that were once dominant and that are still productive and profitable, even if they aren’t growing as dramatically as they once did. They aren’t irrelevant. Rather, they offer diversity to consumers, so what we see isn’t a monoculture of strip malls and Starbucks outlets.

No one knows where the term “wolf tree” came from – whether they were like wolves, hogging resources, or whether they offered refuge from roving wolves in their low-hanging limbs. They’re easy to climb. But they’re another illustration of how a healthy landscape – and economy – offers something for everyone.

Douglas R. Tengdin, CFA

By |2017-08-15T06:52:28-04:00August 15th, 2017|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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