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The New Levels…
Look at the largest lumber producers in North America, they are earning record profits, but they’re not expanding capacity. Instead, they’re using that money to pay down debt, pay dividends and buy back stock. They’re also buying each other, which consolidates the industry and leads to better pricing. Remember how little I know about lumber? Well, I know one thing; lumber isn’t going back into the old range.
Both lumber producers and consumer are in shock. The producers cannot believe how much money they’re making after decades of pain. They don’t think this is sustainable, so they’re not reinvesting. Meanwhile, consumers have a price shock of their own. They’re waiting for the pullback that never seems to happen—that’s leading to pent up demand as consumers eventually accept the new level and pass that cost on.
https://adventuresincapitalism.com/2022/04/18/21690/
Look at the largest lumber producers in North America, they are earning record profits, but they’re not expanding capacity. Instead, they’re using that money to pay down debt, pay dividends and buy back stock. They’re also buying each other, which consolidates the industry and leads to better pricing. Remember how little I know about lumber? Well, I know one thing; lumber isn’t going back into the old range.
Both lumber producers and consumer are in shock. The producers cannot believe how much money they’re making after decades of pain. They don’t think this is sustainable, so they’re not reinvesting. Meanwhile, consumers have a price shock of their own. They’re waiting for the pullback that never seems to happen—that’s leading to pent up demand as consumers eventually accept the new level and pass that cost on.
https://adventuresincapitalism.com/2022/04/18/21690/