The Politics of Paper?

[Gaspar]

I was speaking with an old broker last week and he told me to keep an eye on the Paper industry.

Now first of all, I have to mention that he is a Democrat and we debate issues constantly but he has also been a broker for 45 years and his advice is golden as far as I'm concerned.

What he said was that this administration has passed legislation that will cause the paper industry to boom.  New departments, new regulation, new bureaucracies all have the effect of increasing demand for paper, and the US Government is a prime consumer.

Orders in the industry are already up for business grade pulp products, even though they are still in decline for packaging. 

I've been watching for a few days and the sector does seem to be smoking.  Then, I saw an article today about the relationship between the IRS+H and the Paper Industry.
http://article.nationalreview.com/434140/obamacares-avalanche-of-paperwork/deroy-murdock. 

I guess it's time to buy IP and perhaps even Kimberly-Clark, because I think we are going to need some tissues too. 

[heironymouspasparagus]

The world's entire supply of tissue ain't enough for all the crap that comes out of Washington.

[Gaspar]

The world's entire supply of tissue ain't enough for all the crap that comes out of Washington.

+1

Wait until we get our new 1040EZ with the health deductions booklet.

[RecycleMichael]

I sell a few million pounds of paper per year. I disagree that government regulations make that much of a difference in demand for writing quality paper.

Paper consumption continues to rise, but it is still affected more by personal home computers than anything else. The largest government purchaser/user of paper is in the education field.

Newsprint quality paper has less demand this year because of instability in the newspaper publishng business. Paperboard and cardboard lost demand because of declining manufacturing last year.

I disagree with your friend. The paper industry is heavily influenced by global market consumption and the amount of demand influence of extra regulations would be minimal.

[Gaspar]

I sell a few million pounds of paper per year. I disagree that government regulations make that much of a difference in demand for writing quality paper.

Paper consumption continues to rise, but it is still affected more by personal home computers than anything else. The largest government purchaser/user of paper is in the education field.

Newsprint quality paper has less demand this year because of instability in the newspaper publishng business. Paperboard and cardboard lost demand because of declining manufacturing last year.

I disagree with your friend. The paper industry is heavily influenced by global market consumption and the amount of demand influence of extra regulations would be minimal.

I did buy on his advice.  The fundamentals of the companies I purchased are sound, so hopefully they are a good long term investment regardless.  They also pay good dividends.

[RecycleMichael]

I am a big fan of International Paper. I hope one of the ones you purchased was them. I have had a few meetings with their top brass in the Memphis HQ in 1993 and 1994. I also recommend you look at other industry players Sonoco (SON) and Neenah Paper (NP).

I see IP shares are down 3% today at around $23 a share.

I owned them about six years ago. They stayed in the $25 range and never went anywhere. I sold them after a year or so.

[Gaspar]

I am a big fan of International Paper. I hope one of the ones you purchased was them. I have had a few meetings with their top brass in the Memphis HQ in 1993 and 1994. I also recommend you look at other industry players Sonoco (SON) and Neenah Paper (NP).

I see IP shares are down 3% today at around $23 a share.

I owned them about six years ago. They stayed in the $25 range and never went anywhere. I sold them after a year or so.

Already own Neenah, bought some more.  They're a good 4 star stock.  I did purchase International.  They pay good dividends, and at $23 a share they were a bargain today.  They have a 12 month target price of $31 so I'm tempted to set a stop order for them at that level.

[Gaspar]

Ok, discussed it in more detail with him.  Not all of the new forecast demand comes FROM government.  The Obamacare bill will require small business owners and the self-employed to fill out 1099s for every single company they do more than $600 worth of business with.

That means if you go out and buy a laptop from Office Depot to use for business you will be required to fill out a 1099.  Each business purchase in excess of $600 will require a page of government paperwork.  If you go buy $600 worth of paper at Staples, it will require paperwork.

This is expected to add hundreds of billions of dollars to the paper industry, and cause the tax preparation industry to boom.  The tax software giants are already designing applications to manage this new burden, but it will not change the demand for hard-copies.

There are several sectors especially medical that will be involved in increasing demand for paper as a result of new regulations associated with the legislation.

[Conan71]

Ok, discussed it in more detail with him.  Not all of the new forecast demand comes FROM government.  The Obamacare bill will require small business owners and the self-employed to fill out 1099s for every single company they do more than $600 worth of business with.

That means if you go out and buy a laptop from Office Depot to use for business you will be required to fill out a 1099.  Each business purchase in excess of $600 will require a page of government paperwork.  If you go buy $600 worth of paper at Staples, it will require paperwork.

This is expected to add hundreds of billions of dollars to the paper industry, and cause the tax preparation industry to boom.  The tax software giants are already designing applications to manage this new burden, but it will not change the demand for hard-copies.

There are several sectors especially medical that will be involved in increasing demand for paper as a result of new regulations associated with the legislation.

Interesting.  Supposedly this bill was to make health coverage more simple, yes? Can't wait to see all the new paperwork for insurance companies.  The government is sucking at leading by example in conservation.  Think of all the "greenhouse gasses" emitted in the processing, manufacture, and transportation of all that paper.  Not to mention the environmental impact of inks, toners, etc.  Great job, big government, way to set a wonderful example!!

I really do hate to predict failure with glee but this is a hard one not to feel gleeful about.

[heironymouspasparagus]

Where can one find good quality, preferably cotton paper, on rolls at least 11 wide, preferably 17" wide, up to a couple hundred feet long?
Acid free for archive purposes.  Like what would be used in a scroll (as in Dead Sea).  Or Torah??

[Gaspar]

Where can one find good quality, preferably cotton paper, on rolls at least 11 wide, preferably 17" wide, up to a couple hundred feet long?
Acid free for archive purposes.  Like what would be used in a scroll (as in Dead Sea).  Or Torah??

Call Unisource.  They can supply all kinds of high quality paper.