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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (271954)	12/25/2003 10:03:40 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

unimaginable riches born of love for debt Short bonds? Did you note the Future Inflation Gauge read negative two months in a row? businesscycle.com I've been hoping to say something intelligent about Forest and Paper products. It seems despite several weeks, I'm still at a loss. So I'll say a few things, for you to reflect on, and perhaps gently correct when the time is right. Your past interest in Wheat, duly noted. And extended to DAP/MAP. I'll say Morrocco offers Phosphate to China, but there is not much I can do there without leaving my semi cozy nest. There is a place ripe for Active investing. Argentina once supplied good beef to Europe, but that too is a challenge, from a passive investment stance. LATAM & perhaps Africa, is where it is at, '04, IMO, brought new prosperity by the expansion of the ASEAN led co-prosperity sphere. And my failing memory has you there too, yet before a renewed interest budding in other minds. Maybe not in beef, but poking head above bush in search of potential bounty, nonetheless. Timber- "The world is awash in Timber". Yet institutional buyers are bidding up pricing of 'smaller' parcels. Income generated by timber harvests yields long term cap gains treatment in the US. Big players active- ie Ontario Teachers & Harvard. And not only the US (ie the Fletcher sale in New Zealand, the Stora Enso monetization in Scandinavia. Maybe a megatrend here, in that tax code changes have shifted the value proposition to larger US players, shifting timber 'cap rates' downward. Container Board- Earlier this year, Yardeni & co made mention of higher energy costs in conjunction with lack of pricing power as limiting profit, thus share pricing. A unique perspective put forth by an outside analyst during a ML Paper group sponsored presentation: the shift in production of non durable goods to Asia has also shifted a component of packaging demand there. A more subtle story; the aging US plants now forming the higher cost marginal sources in a global perspective, might be gleaned from an UPM presentation. But the newly devalued USD has shifted the landscape a bit, perhaps giving US producers some additional breathing room on the global field. Pulp- Fluff- A form of pulp. The stuff that makes for good TP and Diapers- apparently a segment that the US still performs well in. Studying the UPM presentations. This stock is trading at a rich? (8.1+) EV/EBITDA. “Story”: Has some exposure to China growth. Possibly impacted by a stronger Euro? Sure enough, a 031204 presention notes the impact of exchange rates in their glorious details. What about Asia Pacific Pulp and Paper- a group you'd think keen on exporting to China- which has environmental groups up in arms re unsustainable harvest techniques and bond holders up in arms over their financial woes. What are they are thinking, and planning? Is their scale sufficient to influence world wide profitability of other players? Russia far east well suited to supply Chinese demand. Difficult to get a read on how much activity there is in this trade. Oh, a wsj article on the movement of FPP products from the Ukraine to China. The US exports tons of recovered waste paper to China. The UPM presentation suggests sourcing pulp from North America. NBSK (Northern Bleached Softwood Kraft, pulp with longer fibers). Second look at the presentation reveals some increase in NBSK- but a larger proportion of Hardwood. And yes, the second look reveals APP the big dog in the ASEAN world. SKF Pulp Fund runs a plant in Canada reported to be one of the more efficient North American players. Info on this stock is hard to come by, pretty much limited to the SEDAR filings. It's not clear how a bankrupt ABY might impact them. While they aren't directly tied to the china story, they would benefit from a shifting demand picture supporting pulp pricing. Some see additional advertising in the US election cycle driving better NA pulp pricing near term. Southern originated hardwood pulp faces competition from Latin America Eucalyptus stocks. And now a report of the 'bugwood impact'. Industrial plantations of pine in the SE US infested by a destructive beetle, and preventive harvesting suppressing pulp pricing? An interesting tangent, but one I'm unable to quantify regarding significance. The global Forest and Paper Products story proves rather intriguing, perhaps the larger picture untold, unknown or unknowable. Truly good North America investment vehicles might be in short supply. Investors flock to NZ forests news.bbc.co.uk Stora Enso to restructure its forest ownership storaenso.com The rest of the company's shares will be placed with institutional investors. Sedar filings, SKF Pulp sedar.com The Tennessee Tree Massacre nrdc.org creating a glut of scrawny "bugwood" on the market. This has severely depressed the price of pulp. UPM-Kymmene Fine Papers and Changshu Mill w3.upm-kymmene.com w3.upm-kymmene.com