Dividends and Beyond the Beauty Strip

The cutting of trees for pulp and paper and other uses is a multi-billion dollar business and any area with seemingly lots of trees has economic activity related to cutting the trees down. If you think back in terms of when your part of the country was settled, part of the job in settling the  was to remove trees to build a home and cultivate lands to grow food. As time goes on the use of the chainsaw and now machines cut the trees as efficiently as possible. There are very good reasons to use the machines, however the downside was the ability to cut more trees than needed to grow so in 30 years plus the trees can be cut again. Beyond the Beauty Strip by Mitch Lansky, Old Bridge Press, Camden East, Ontario 1993 looked at what was happening in the state of Maine. The state of Maine has a very active forestry industry and many are doing the very best they can.

As a government the State of Maine leans to the forestry companies for their interests in keeping the plants running and the goodwill to ensure that while 90% of Maine is forestry, there remains a healthy forestry industry for years to come. Mr. Lansky argues very effectively, the practices of the forestry companies in Maine, at least up to 1993 leave a lot to be desired. Many attributes offered by the forest companies are not as good as they seem to be. n fact many attributes seem not to help anyone but the forest companies for the short run. When people live in an area, they are torn between what is great for industry and what is great about living in the region. Since their income is invariably linked back to the forestry companies the forestry companies have a great deal of leeway or goodwill behind their names and ability to sign cheques.

Linking to dividend paying stocks, many forest companies pay a dividend although their stock price fluctuates with the economy. Companies often site advantages of ensuring governments help them, some of the advantages are myths and those that will take a toll on earnings in the future. It is important to recognize what is a myth and what is reality and invest accordingly.

There are more questions than answers, till the next time – to raising questions

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