I made these at Maker Place http://www.makerplace.com from an old 4" x 4" cedar fence post laying around.
Of course you don't need to use a fence post, any 4 x 4 will do.
It just shows that you can bring life back to any chunks of wood laying around by turning it on the lathe.
Cost: $5 at most
Time: 1.5 hours or so
Step 1: Cut off the piece to turn
Step 2: Mount the faceplate, attach to the lathe
VERY important to use good quality, aggressive screws or lags here so your pencil holder doesn't go flying off the lathe into outer space.
I used 8 aggressive lag type screws.
Step 3: Rough out your design
Use sharp chisels, I started with a gouge.
i wanted to leave some squared sections so I marked with a sharpie where to not chisel.
Highly recommended to use the tail spindle as support here as you rough out, it'll help support your piece and keep it true.
A shop vac and mask will help keep the dust out of you.
Begin to hollow out the inside edge.
Step 5: Time to cheat
To save some time and swearing I used the drill press with a 1" blade to get it started.
Drill to whatever you want the final depth of the pens to sit at.
Step 6: Hollow...
Once your depth is good, sand the inside well.
Step 7: Finish
Fine grit sand paper and/or steel wool in between will help keep the streaks down in the finish.