With
the way the financial markets have been going since the first of the year, I would not be surprised to find most of you hiding under your desks. I know my own broker is; he won't answer my calls.*
In times like these, some of the things I learn building houses for the poor in Guatemala--something I do a couple of weeks a year--come to mind. The germane matter is this--we are often moving people out from paperboard shacks into the houses we build for them.
What's the lesson? In markets reeling as they are today, the principle grades of pulp and paper--packaging and tissue--are keys to a modern life. In poor countries the first luxury good in mass distribution is toilet paper. Boxes are used everywhere.
So, when the markets are crashing and burning all around us, remember that many paper products are not luxuries (despite what I just said above); they are essential for modern commerce and living.
Can we do without an iPhone? Yes--and Apple's recent stock performance reflects this.
However, my contention is that basic pulp and paper manufacturing as we know it today is essential. Drops in the stock prices of pulp and paper companies reflect a bit of the herd mentality as everyone runs for the doors. It is not a reasonable comparison to lump pulp and paper in with many other stocks racing to the bottom.
*Just so you know--I do not invest in the pulp and paper industry because it would not be an ethical thing for me to do. And perhaps not a legal one, as I may be the ultimate insider.
