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Strategic & Financial Arguments(TM)
for the pulp and paper industry worldwide

December 2016

Participating as industry experts in pulp and paper financing and M & A deals around the world  for over two decades, we continue to see the same mistakes made over and over.  This newsletter is designed to help you avoid costly mistakes we have seen others make.  We will be giving you one or two points each month to help improve your performance.
 
Investors in the pulp & paper industry are optimistic about the future...
 
The stock market has been garnering headlines ever since Trump was elected president-elect on 9 Nov 16.  The Dow Jones Industrial Average has gone from 17,994.64 on 8 Nov 16 to 19,770.20 as of 12 Dec 16. This is a gain of 1,775.56 or 9.9%.
 
Well, folks, they should have been in the PM40. The PM40* went from 3,264.30 on 8 Nov 16 to 3,633.12 on 12 Dec 16, a gain of 368.82 or 11.3%.  The PM40 bested the Dow by 14%.
 
The PM40 is composed of stocks in the forest products sector which trade on US exchanges; thus it is US-centric.  Clearly investors see promise in the new administration, both in the potential to stop dumping of forest products from foreign sources, from timber to paper, to a new climate of more favorable regulations.
 
There is a lot of concern in general about a trade war breaking out, based on the rhetoric we are hearing from the incoming administration.  We see a potential silver lining: there might be a slight possibility that US OCC (Old Corrugated Containers) could be shut out of the Chinese market in a trade war.  This would play nicely for US recyclers.
 
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*You can hear an update on the PM40 performance daily on Pulp & Paper Radio International.  An update is broadcast every day the NYSE is in session at 11:30 pm US EST. Listen live or anytime thereafter at www.ipulpradio.com.  Just search for pulp & paper radio in your podcast app on either iPhones or Androids to have all Pulp & Paper Radio International programs automatically downloaded to your phone.
If you have a casual question or a major deal, call me on my personal cell phone - 404-822-3412 or email me at jthompson@taii.com. We are here to help.

 

Sincerely,

 


Jim Thompson, CEO
Talo Analytic International, Inc.
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