This Week in Paper by Joe Masters (TMF Master) Charleston, SC (June 6, 1997) -- A very quiet week for Paper/Forest, both from a newsworthy and a stock volatility perspective. While "da bulls" took hold of both the Dow and the S&P500, with the indices gaining 1.43% and 1.15% (respectively) to set new record highs, the "jazz" was gone from our index which gained a mere 0.03% this week. Leading the gainers this week was KIMBERLY-CLARK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KMB)") else Response.Write("(NYSE: KMB)") end if %>, coming off a near 11% decline last week to add 4.23% this week. Also doing well were INTERNATIONAL PAPER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %>, up 2.87%, POTLATCH <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PCH)") else Response.Write("(NYSE: PCH)") end if %>, rising 1.75%, and WESTVACO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: W)") else Response.Write("(NYSE: W)") end if %>, gaining 1.20%. Topping the losers (outnumbering winners by 11-to-8 this week) was JEFFERSON SMURFIT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JJSC)") else Response.Write("(Nasdaq: JJSC)") end if %> which dropped 10.42% after gaining 15.20% over the past two weeks. Also "dunked" were TEMPLE-INLAND <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TIN)") else Response.Write("(NYSE: TIN)") end if %>, down 2.69%, BOWATER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BOW)") else Response.Write("(NYSE: BOW)") end if %>, declining 2.28%, and PH GLATFELTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: GLT)") else Response.Write("(AMEX: GLT)") end if %>, losing 2.14%. All the News that Fits the Print: On Monday, Suomen Optioporssi, a Finnish options exchange, put the value of northern bleached softwood pulp at $549.56 per ton, down from $550.09 last week. In May, the PIX mean was $541.51, up from $518.12 in April. The PIX mean was $522.28 in March, $546.59 in February and $556.86 in January. Also Monday, HARNISCHFEGER INDUSTRIES INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HPH)") else Response.Write("(NYSE: HPH)") end if %> said that through May 30 it had received about 3,429,664 shares of Giddings & Lewis Inc. in response to its $19 per share tender offer for all shares, and it has extended the bid through June 6. On Wednesday, FLETCHER CHALLENGE LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FLP)") else Response.Write("(NYSE: FLP)") end if %> said it has notified the Australian Foreign Investment Review Board of its interest in increasing its half-stake in Australian Newsprint Mills. ANM, half-owned by NEWS CORP LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %>, has newsprint mills in Albury in New South Wales and Boyer in Tasmania and supplies about 70% of Australia's newsprint market. Also Wednesday, Temple-Inland said its mortgage unit acquired Knutson Mortgage Corp. for about $71 million. The company said the purchase resulted in a servicing portfolio of over $24 billion. On Thursday, Temple-Inland said that it and CARAUSTAR INDUSTRIES, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSAR)") else Response.Write("(Nasdaq: CSAR)") end if %> plan to construct and operate a gypsum wallboard plant in the Clarksville, Tennessee, area with an annual capacity of about 700 million square feet of gypsum wallboard. On Friday, SCOTT PAPER LIMITED (SO.TO) announced that the proposal by Kruger Inc. to acquire the company became effective. Court approval of the transaction was obtained Thursday following shareholder approval which was received on Tuesday. For all you pulp groupies, please note that Mr. Carl Geist, in charge of pulp operations for WEYERHAEUSER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WY)") else Response.Write("(NYSE: WY)") end if %>, will be a keynote speaker at next week's international conference on pulp held right here in Charleston (sorry, I won't be there). Mr. Geist will be addressing industry concerns regarding ROI and cost of capital for this segment. My understanding is the transcript will be available at the company's website at http://www.weyerhaeuser.com following the presentation on Monday the 9th. Copies may also be requested by calling 800-525-5400. "Model Portfolio" Update: Not an especially good week for our port-faux-lio. While some nice gains were made by International Paper and Caraustar Industries this week, quite a bit of ground was lost by a 13.7% decline in THERMO FIBERTEK <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: TFT)") else Response.Write("(AMEX: TFT)") end if %>. No news was seen on the wires to account for the drop. Given this is a thinly-traded issue, though, volatility is usually a little higher since there aren't many buyers around when someone wants to sell, and vice versa. This week, buyers were scarce and the price dropped until some were found. Maybe next week sellers will be lacking. Doesn't matter, though, as we intend to give this one some time. Someone else agrees, as one insider purchased 2 million shares over the past year, at an average price some 6% higher than our entry. Purchase: IP = $40.50, CDP = $49.13, CSAR = $29.00, TFT = $10.75 Last Trade: IP = $49.25, CDP = $54.38, CSAR = $31.13, TFT = $9.44 This Week: Year-to-Date: Model = - 1.31 % Model = + 29.94 % SP500 = + 1.15 % SP500 = + 15.83 % FSPFX = + 0.00 % FSPFX = + 7.82 % Commentary: My apologies for the brief report this week as I am leaving for Europe in a few hours, thus explaining why I cannot attend next week's pulp conference here in town. Along with some other tasks, I intend to obtain some first-hand information about the current state of the industry as it is across the pond. Look for my report in the coming weeks. Until then.... Keep them presses rolling !!! TMF Master

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