The simplest way to make a genuine fortune - we're talking 20 to 50 times your money here - is to buy assets no one wants and wait for them to be wanted again.

In fact, we met someone who did it firsthand a few months ago. Over breakfast with Bob Quartermain, the president of Silver Standard Resources (NASDAQ:SSRI), your editor got the first-hand account of the company's development.

Quartermain, a geologist by training, started at Silver Standard in 1985 when the precious metal bubble had just imploded. He had one goal: acquire silver assets. Silver projects were cheap and plentiful and Silver Standard was buying them.

To make a long story short, this strategy took Silver Standard from a company holding a few dozen worthless silver projects to a leading silver mining giant worth more than $1 billion today.

Early investors who spotted this opportunity made 20 to 50 times their original investment or more.

Now it's looking like it's happening all over again in another industry no one wants to touch - timber.

I know, I know...timber!...who wants timber? But please, here me out.

The Insider Advantage

For obvious reasons, timber is out of favor. Housing starts are still at multi-year lows. Lumber prices are down nearly 70% from their housing bubble peak. And shares of leading timber companies have recently been downgraded by analysts at JP Morgan, Credit Suisse, and other firms (could there be a better buy signal?).

There is, however, one industry insider who may be pulling together another Silver Standard-style success - only in timber. Even if it pays off only half as big though, it's definitely worth a look.

Last week I was doing some research on a very early stage opportunity for President's List readers and sat down for lunch with Rick Doman. The Doman name is a big one in the timber industry. Herb Doman, Rick's father, built Doman Industries from the ground up. Herb started the company in 1953, listed it publicly in 1964, and eventually grew it into a $1 billion timber company.

When Herb left the company in 2001 it was in rough shape. It was weighed down by too much debt and Rick took the reins to lead a restructuring. Rick took the company from the verge of receivership to a $1 billion turnaround success story in about three years.

Rick spotted the housing bubble and realized the great times would not last forever. He knew the mistakes timber companies made in the 90s with debt and other structural mistakes because he witnessed them firsthand at Doman Industries. And when the newly reborn Doman Industries (under its new name Western Forest Products - TSX:WEF) was headed down the same road, Rick got out of there.

Over the next five years he would keep close tabs on the industry though as a consultant. Basically, he charged institutional investors thousands of dollars to tell them not to buy timber.

Frankly, you'd be hard pressed to find someone who knows the industry better. And that's why your editor became very interested when we found out Rick was getting back into timber. After all, we know the value of the opportunity to accumulate assets no one else wants (who wants timber now?) and we had to get together to learn what he's doing, why he's doing it now, and what the real opportunities are out there.

The Real Future of Timber

Now, when you think timber (technically, softwood timber in this case), you think housing. The two industries are practically joined at the hip. Housing construction drives timber demand.

So when housing starts climbed to the rate of 2.2 million per year at the peak of the bubble, lumber prices surged too. Lumber climbed from $250 to $300 per 1,000 board feet at the start of the decade to more than $450.

The great times wouldn't last forever. Lumber price collapsed when the housing bubble burst. They fell from the $450 peak to less than $150. The downturn forced companies to curtail production and sawmills to shut down as the industry contracted.

As I write, lumber prices are still under $200 and timber is still out of favor. But there's actually a lot to get excited about.

Here are four reasons why a contrarian could really get excited about timber now (it's not just housing):

Long-Run Housing Rebound - The housing market is currently working through the bubble era excesses. Prices are down and the government has the industry on life support.

Over the long run the outlook for housing is much different than it is now. It's all because the fundamental driver of housing demand is population growth.

As a result, U.S. population growth will spark a rebound in housing construction. The boom times may never come again, but there is an equilibrium point the market must get back to. That equilibrium rate is much higher than the current rate. Here's why.

The Population Reference Bureau expects the population to grow at 0.9% per year through 2050. If we extrapolate the results of recent Texas A&M University study, Housing Market Mirrors Population Growth, which correlates housing and population growth, excluding the recent bubble years, the 0.9% population growth means housing demand will increase 1.12% per year.

That means 1.26 million new homes (105 million currently + 1.12% per year growth) will need to be built each year.

Of course, you have to consider types of housing units, interest rates, and how long the newly constructed houses will last. However, 1.26 million per year estimate is right in line with long-run averages. The current new housing construction rate is 660,000 per year.

Barring an outright depression, housing construction must go up over the long run to meet basic demand from new families and to replace old ones. And the timber demand will rebound right along with it.

A Tight Correlation - Although the timber market is truly global, lumber and U.S. housing are very closely correlated.

For instance, a few hours before Rick and I sat down for lunch, the U.S. government announced plans to extend the $8,000 first-time homebuyer tax credit. That was expected. The market didn't expect the extension of a $6,500 credit for other non-first-time homebuyers.

The reaction in the lumber trading pits in Chicago was euphoric. Lumber prices surged 5% and went limit up - the point at which trading is halted because the price has moved too much in a single day. It's a very bullish sign.

The Russian Wildcard - Russia accounts for 22% of global wood trade. It is the third largest timber producer in the world behind Canada and the United States.

Russia has repeatedly proven its willingness to leverage natural resources to its political advantage. It has used oil and natural gas and -coming soon - agriculture (follow this link for Agriculture Report), with total disregard for the economic consequences in the country. Timber is about to join that group.

For example, Prime Minister Putin placed a 25% export duty on timber last year and announced it was going up to 80%, with the intention of encouraging foreign investment in Russia's timber industry. The big increase has been delayed, but the delay is not indefinite.

The impact here is Russian timber became 25% more expensive on the world market with the swipe of a pen. And it's only going to get more expensive. This creates a situation where timber production has much less competition at current prices.

In addition to all that though, other leading timber producing regions are facing their own set of challenges.

Pine Beetle Devastation - The biggest challenge facing the two largest timber producing regions is the pine beetle. Pine beetles bore through pine tree bark and basically kill the tree. They then move onto the next.

The pine beetle has ravaged forests across North America over the past few years. One of the hardest hit areas is in British Columbia, Canada. The timber industry throughout inland British Columbia has practically ground to a halt. For example, West Fraser Timber (TSX:WFT) closed its last timber mill in northern British Columbia last week. They had to shut it down because there aren't enough trees. The pine beetle has killed most of them.

It doesn't stop there; the pine beetle infestation is spreading. It has already spread through the U.S. northwest and has reached as far away as Colorado. The beetles have had the same impact there too. The Colorado State Forest Service recently reported 660,000 acres of lodgepole forests have been destroyed by the pine beetle. That's more than 40% of Colorado's forests!

To put the pine beetle infestations into perspective, think of timber like the oil industry. Then picture what would happen if Iran's oil production was eliminated from the market.

Prices would go up - way up. That's about what the pine beetle has done so far in the timber industry, but lumber prices haven't gone up...yet.

Buying Low and Selling High

Needless to say, now is the time to get really interested in timber.

The industry has been decimated by the housing collapse. The sector is completely out of favor and assets are selling for pennies on the dollar.

The timber industry's future, however, is quite bright for those willing to get past the knee-jerk housing market is terrible reaction and look at what's really going on.

More importantly, all this truly shows there are folks looking to turn the current downturn into an absolute fortune. The markets may be weak and getting weaker, but as investors, we have the opportunity to get on board with the few who are doing it right and go along for the ride. It also shows the best low-risk/very high-reward opportunities will be limited to those of us with a contrarian approach looking where nobody else is.