Shares in Harley Davidson (HOG) are up 57% from the beginning of the year. This is great for shareholders, and the companies option holders, but not so good for for actual Harley riders.
A real mans bike, in Sunshine Yellow
Analysts speculate that as the recession carries on, most Harley riders can’t afford to spend the extra money on expensive, slow motorcycles that are always breaking down. This is good news for Japanese Harley competitors Yamaha, and Honda. There has been a shift from Harley Davidson motorcycles to some of the Japanese cruisers as we’ve gotten to the point that they look and sound exactly like Harley’s, but they are less expensive and don’t need to be in the shop for 2 weeks every time you ride it.
Even the Hell’s Angels are feeling the hard times as new chapters become more accepting to other models. “We have a new chapter that rides exclusively Kawasaki Ninja 250r’s, the Hell’s Ninjas. It’s a different bike, neon green; but it can turn, and you only need to take it into the shop for tires or an oil change. If I knew that I didn’t have to take a bike into a shop every 50 miles, I would have gotten me one of those from the get go.” says one Hell’s Angel member.
Electraglide? Is that some sort of vaginal lube?
However most riders are loyal to the brand, and will not sway in any direction other than Harley. We expect the stock to keep rising no matter how many bikes Harley Davidson doesn’t sell just based on the fact that many eager riders that can’t afford to ride, or have wives that won’t let them ride are now buying the stock. One Harley Davidson investor was quoted as saying, “I can’t afford a $40,000 Harley anymore, but I can afford to invest $4000 in Harley stock. When people ask me if I own a Harley, I always say, ‘I own Harley!’” he chuckles.
With Harley Davidson selling only 3 bikes a year and averaging 5 million shares bought and sold on average, we believe that this poorly performing company with big, expensive, slow bikes that can’t turn and need to be taken to the shop every day to be fixed, will be a key earner in a lot of portfolios.
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