Harley-Davidson: Opportunity Exists to the Downside

HOG missed earnings estimates earlier this week. It reported EPS of $.11 vs. an estimate of $.21. Thus far on Yahoo Finance, the analysts' estimates for Q4 2009 have been lowered to -$.26 from -$.16. This means HOG now stands to earn $.43 in FY2009. This translates into a FY2009 P/E of 65 based on Friday's closing price of $27.86. This P/E is far too high for a company whose earnings and revenues seem to be going in reverse instead of growing. Earnings were down more than 80% and sales were down 21% year over year (i.e. revenues are down).

HOG announced it was discontinuing two product lines -- Buell and MV Agusta -- in order to focus more strongly on the Harley-Davidson brand. We'll have to see how good a strategy this turns out to be. Many people have expressed doubts that the Harley-Davidson brand will continue to have the same appeal as the baby boomer generation ages out of the motorcycle buying demographic. Those same people have suggested that both Buell and MV Agusta had more appeal to younger generations.

HOG has announced some improvements to its HDFS unit. It has made loan qualifications more stringent. It has started to ask for bigger down payments. However, this does nothing to help most of the $5.18B in loans held for investment at the end of Q3. It also likely will prevent some customers from buying Harley’s. Further the $5.18B in loans still represents a huge threat to HOG/HDFS as unemployment continues to rise. Moody's is predicting that the credit card charge off rate will peak in about mid 2010. That will likely be the peak of HDFS' problems too. HDFS lost $31.5M in Q3. That was $67M worse than a year ago. It is likely to do much worse before things perhaps begin to improve in the credit business after the middle of 2010.

In the last 90 days the predictions for 2009 EPS have come down from $.88 to $.46 (or $.43) for FY 2009. The predictions for 2010 have not moved down nearly as much. However, as 2010 nears that eventuality seems only a matter of time. I would not be surprised to see HOG lose money in 2010. I would not be surprised to see HOG enter bankruptcy. HOG had a very hard time finding money for HDFS for the 2009 fiscal year (about $1B). HOG will perhaps have a harder time in 2010. HOG seems expensive with a PEG value of 2.8566, above the Recreational Products industry median PEG of 1.22. Considering the FY2009 PE of 65, the PEG doesn’t give one much hope.

On a technical basis HOG is currently above its upper Bollinger Band. It is very likely to come down from there. It is about $4 above its 50-day sma. It should very easily return to there, especially if the market retraces. If the market goes sideways, HOG should still fall. If the market continues upward with strong Q3 earnings, then it might be best to get out quickly. This should be a good short. Any positives in EPS have come from cost cutting and added efficiencies. This cannot go on forever. HOG needs to produce revenue growth. There is no sign of that yet. Rather HOG is likely going to be severely challenged in 2010 as the credit charge off rates skyrocket. Does a stock, which is at risk of losing money in 2010 (or at best growing very little in 2010), deserve to be trading at 65 times 2009 earnings. I think not. The dividend is no reason to keep this stock. It pays a paltry 1.45%, which is considerably below the 2.38% average currently paid by the S&P500.

The Williams %R and the RSI both indicate that HOG is over bought. The SPY is looking like it may retrace soon. Nothing is one hundred percent certain in the stock market, but betting HOG to go down seems like a good percentage bet at this time. Still it might pay to keep a tight upper stop as the overall direction of the market is uncertain; and HOG has a Beta of 2.3. The recent rapid rise seems likely to reverse itself given the negative earnings news. I think the initial negative reaction to the earnings news was the correct one. The “dip buyers” have since pushed the stock price up by about $4. It seems likely that the fundamentals will soon override the unreasonable optimism of the “dip buyers”. This should allow for a very nice profit for those who short. Perhaps GS was a big “dip buyer”? Perhaps GS is now planning to make good money to the downside?

Below if the 3-month chart of HOG:

Disclosure: The author currently has a small short position in HOG.

Comments

[Weaponsman:]

Harley Davidson has made a long term blunder in ending the Buell and MV Agusta product lines. Those Buell and MV Agusta riders are young and as they age most will tend to stay brand loyal. When their age and incomes increase they would, in theory, move on to a HD. Brand loyality is not built over night, or in one decade, it may take several decades, as HD should know. Look for a repeat of the AMF years and the end or near end of HD as a brand.

Oct 19 08:12 AM

[twhite113:]

This is a comment from Wells Fargo republished in Business Week:

Wells Fargo upgrades to outperform from market perform; raises estimates, valuation range

Wells Fargo analyst Timothy Conder said on Oct. 14 that he upgraded Harley-Davidson's stock on his belief that investors have yet to fully appreciate the likely year-end 2009 supply/demand gap that should allow for low single-digits 2010-11 shipment growth and stabilizing used bike prices in the first half of 2010.

The analyst also sees a likely resumption of Harley-Davidson's share repurchase program with excess free cash flow. He raised his $1.32 2010 earnings per share estimate to $1.44 and sets a $2.12 2011 estimate. He raised his $19-$21 valuation range to $30-$32.


Any response, author?

Oct 19 08:30 AM

[eddybaby:]

Couldn't agree more David. HOG typifies the current overbought state of the market. (And then some!)

Oct 19 10:36 AM

[mallarde:]

I added to my short position today. I consider my position long term positions that I can think of as hedges against my mutual fund holdings that are (obviously) long positions.

If HOG goes up more for no reason other than bluster, I will consider moving more assets into my brokerage account and taking on more risk through a larger short position.

The only thing that concerned me was international sales. Since international sales declined by a healthy amount notwithstanding their professed emphasis on expanding outside the U.S., I am less concerned about this.

Also, after listening to the conference call, I am more convinced that management is only competent to "flog the brand" more. The brand already is overexposed. The strategy that seem to want to adopt is appropriate strategy for harvesting as much as possible out of a dying company -- not growing an existing one.

I wish I knew more about how these banks and institutions operate so I could decide whether they are all ignorant or colluding with each other.

Oct 19 05:59 PM

[David White:]

mallarde: I would never risk too much on any one investment. i think my premise it correct. However, the market has often made fools of better, more experienced men than me.

I do agree with you about the international sales. They have toouted them a lot. They will bring in some money. However, it is doubtful that they will be extremely profitable. The average price of the motorcycles sold in India is in the $1000 to $1500 range. India slapped a 100+% tariff on HOG. The cheapest bike they will sell there will be a normally about $7000 bike, which will retail for $14000+ due to the tariff. It's hard to imagine many Indians wanting to pay this kind of premium price.

In China they have tariffs too. They also have laws around most of the big cities which prohibit the use of powerful motorcycles within a certain number of km of the city limits. This effecively excludes a lot of HOGs.

Both China and India are huge markets, but they are going to be hard for HOG to penetrate under the current circumstances. HOG will more likely lose money in these areas trying to penetrate these markets. In the long run that may pay off. In the next two years it seems more likely that HOG will lose money in those markets.

HDFS will likely lose increasingly more money until at least mid 2010, the predicted peak credit card charge offs.

Oct 19 06:46 PM

[David White:]

The Wells Fargo analyst seems a little overly optimistic about HOG. HOG has negative free cash flow from operations in FY2008. I am not sure of the exact figures for FY2009, but I expect FCF to be negative then too. HOG will have trouble raising the money it needs just to allow HDFS to go on lending in 2010. To expect that HOG is going to buy back any appreciable number of shares with what is likely to again be neagtive free cash flow is ridiculous. Even if people buy more motorcycles from HOG in 2010 than many think they are going to, HOG will still be playing catch up financially. HDFS losses are likely to accelerate until mid 2010 (or whenever the credit card charge off rate peaks). This will keep HOG scrambling for enough money to keep itsself in business, which it may have a hard time doing. It is extremely unlikely to repurchase shares. The very idea is someone's drugged up fantasy.

Oct 20 01:48 PM

[David White:]

The Wells Fargo analyst has paid too much attention to the numbers and not enough attention to what HOG, especially HDFS, has actually been doing. HOG recently shifted most of its loans from "held for sale" to "held for investment". HOG quite simply could not sell these loans for anywhere near face value. HOG would have had to take huge losses on these loans. However, HOG has only temporarily forestalled those losses. The eased mark to market rules allow for some leeway, but do not allow loan losses to go completely unreported. As those loans "kept for investment ($5.18B at the end of Q3)" age, they will have to eventually be reported as losses. These losses will accelerate as the unemployment rate climbs and the credit card charge off rate climbs. Currently the pridiction is for the credit card charge off rate to peak in mid 2010, but this could easily be even later. The Wells Fargo analyst has clearly ignored the fact of the skyrocketing negative cash flow from "investments" that will occur from Q4 2009 through Q3 2010. If you look at the results from Q3, you will see this figure was large for this quarter already, and this quarter will be a drop in the bucket compared to future quarters in the next year.

As for the increased sales, HOG has had a steady stream of declining revenue for the last year or more. We have yet to see this decline flatten out, much less reverse itself. I think we have to see revenues flatten out before we think that they are going to suddenly climb drastically. Sales were down 21% year over year for Q3 2009. Eventually they will start back up. However, it is not clear that the motorcycle, especially HOG, will do even as well as the auto industry in this regard. HOG's are termed recreational vehicles for a reason. Most of the buyers are not using them as their primary mode of transportation. Reason tells one that in a continued slow growth / recession environment, HOG's will lag auto sales with regard to sales rebound because autos are "primary and necessary" transportation. We have yet to really see an auto sales rebound, except that mediated by Cash for Clunkers. When I start seeing an auto sales rebound, I will start believing a HOG rebound could be in the cards. HOG is very much in jeopardy of going bankrupt in 2010. The Wells Fargo analyst's predictions are nothing but smoke and mirrors at this point. You have to wait until you see strong evidence of a turn around before you bet on it. So far, HOG is making a lot of noise, but it has very little substance. Q3 EPS was another miss. Q4 EPS predictions were lowered to more negative than they had been. HOG has missed at least the last 5 consecutive quarters. This does not mean management has a good handle on what is happening. It means the opposite. Plus the trend in EPS estimates is still downward. The Wells Fargo analyst is bucking this trend. That usually doesn't pay.

Oct 20 02:52 PM

[mallarde:]

Thanks for the outstanding commentary, David. Also, thank you for the warning. I have been following HOG for many months and will invest with caution.

So the amount they kept on their books involuntarily is $5.1B?

I thought exactly the same thing with respect to revenue. Before they can increase revenue, don't they have to stop the cratering? Shouldn't the question be, when will we stop seeing massive, double-digit declines in sales?

Before the latest equities love-in, revenue declines of these magnitudes would have people screaming for the exits. Instead, management offers empty bluster about "expanding" the brand -- as though H-D benefits from massive exposure like Mickey Mouse.

This is like watching a car wreck in slow motion. I could see H-D taking big gambles to expand overseas, keeping more loans on their own books to prevent sales from dropping even worse than they will in any case and then being forced to ask for a bailout like the Big 3.

Oct 20 04:19 PM

[David White:]

HOG closed today at $28.54 or almost unchanged on the day. It had a lower high point today than the last two days. The pattern is starting to look like a topping pattern. HOG has not gotten higher than $28.75 for three days in a row. Given the fundamentals, the stock should soon turn lower, if the SPY does not shoot up again. The recent rise on the miss in earnings was unfounded. An analyst of two has ignored the $5.18B in loans now being "held for investment". These will incur huge losses over the next several quarters.

The SPY also has looked like it is topping for the last few days. If it heads down soon, HOG with its Beta of 2.3 will follow quickly. After this initial (I think misplaced) post earnings run up for HOG(on a miss for Q3 and a revision downward for Q4), HOG should move downward as long as the SPY does not skyrocket. We will have to wait to see.

Some people are predicting a near term high of $112.50 for the SPY. We have a ways to go to get to that. However, there is no saying that the SPY will not reverse at any time. In cases of double digit revenue changes reported so far, the decreases have far outnumbered the increases. The revenue changes was supposed to be what analysts were looking for in this quarter's earnings. We will have to see if that thought holds true. Time will tell. There are no absolutes in the market place.

From Candlestick theory we see a hanging man candlestick or a dragonfly dogi for today's trading. This tends to be bearish. If HOG closes tomorrow below today's close this is supposed to confirm the bearish character of the dragonfly dogi (or hanging man). Tomorrow could be the start of a big down trend for HOG. With the huge straight run up recently, one would normally expect a retracement about now. It may begin in earnest tomorrow. I don't see fundamental reasons for a continued run upward.

Oct 20 04:29 PM

[buddhabill:]

HOG is my lottery ticket to the downside. There can be no doubt that much of the recent run-up is short-covering - the fundamentals for this last quarter are horrendous - 21% revenue decline, and look at the 10 day chart!

I bought 50 OTM Feb puts for a song, and I will add more closer to the money and nearer-term when the covering is exhausted.

Harleys are a middle-class luxury, and the middle class will be relentlessly squeezed for years to come. The used market will soon be flooded with repos and people dumping expensive toys, and the competition from the vast number of other V-Twins will gobble-up those who want a new bike, but would rather spend $12k than 24k, brand be damned. Sure there are the loyalists, but Chevy had plenty of them too...

Oct 21 05:58 PM

[Joseph Wagda:]

The Wells Fargo analyst might be right regarding shipments in 2010 and 2011. At year's end, HOG will have shipped approximately 20k fewer bikes than it will have sold in 2009. If HOG ships the same number of bikes as it sells at retail in 2010, then it would generate YOY revenue growth in 2010 as long as retail sales deteriorate by less than 7% YOY.

On the other hand, it appears that HOG's sole source of operating cash flow is through TALF. HOG's operating cash flow prospects should be discounted until the company can prove that it does not need the federal government's help to monetize its finance receivables. (Additionally, HOG's WACC is artificially low because of the TALF program.)

This recession is accelerating a secular deterioration in the domestic market for HOG's flagship products. YOY retail sales will be down for the third consecutive year at 12/2009. The critical question is when retail sales will bottom out and whether they will recover. The fact that only four dealers and 15 secondary dealers/satellite retail locations have closed their doors to date in 2009 tells me that the consumer's pain has yet to fully manifest itself in HOG's sales.

I was surprised that HOG pulled the plug on Agusta to "focus on the Harley-Davidson brand". Given a secular decline in the demand for motorcycles, the remaining customer base for the entire industry will be those who have a passion for motorcycling, not a passion for chrome and $450 leather jackets. Agusta could have been developed into a brand which could appeal to those enthusiasts. Unfortunately for HOG, management will find out the hard way over the next several years that the only way to achieve growth through the H-D brand is to invest in tattoo-removal equipment manufacturers.

HOG at $28 is pricing in a healthy dose of future good news as well as the continuation of government largesse.

P.S. Only a sell-side analyst could use HOG and "share repurchase program" in the same sentence without any hint of sarcasm.

Oct 21 07:45 PM

[David White:]

Today HOG closed below the hanging man candlestick or dragonfly doji pattern of yesterday. This is supposed to confirm the bearish trend. However, the close was not dramatically lower, so it is a very weak confirmation. Today's candlestick shows a shooting star or gravestone doji pattern. This is more bearish than the dragonfly doji of yesterday. Hopefully there will be a good confirmation of both tomorrow.

Oct 21 11:14 PM

[mallarde:]

Joseph, tattoo removal is a good idea for customers that have to return their motorcycles to the dealers because they can't make payments. Return the bike and remove the tattoos in one stop.

Management's statement about "focusing on the H-D brand" really cracks me up. Who are they kidding? (I guess they fooled some people.)

Oct 22 12:44 AM

[David White:]

HOG didn't confirm the downtrend today. However, it didn't go up much on an good up day, so the trade is still alive.

The bad news is that AMZN had stupendous earnings and guidance. This will likely push the market up tomorrow. If the Existing Home Sales are bad tomorrow, that will probably counteract the AMZN news. If the Existing Home Sales are good tomorrow, you may want to exit the trade immediately. You will likely be able to get back in at a higher price.

HOG still looks like it is in a topping mode.

Oct 22 09:12 PM

[David White:]

For anyone who doesn't know where to find Existing Home Sales news tomorrow at 10am ET, Marketwatch.com normally reports it fairly quickly after the news comes out.

Oct 22 09:15 PM

[NSN:]

Guys..
I do beleive is stock is over priced and artifically inflated. I wonder who is buying this stock at such high volumes. I be glad to get out at current price but be hesitant to short this unless have some patience for 18 months to make a killing on this one. This brand is not for average riders.. Target riders are upper/above middle class. They sell this bikes to celebrities with huge maint. contracts. Owning HD bike is a status symbol for many CIOs/CFOs/CTOs. and I think these are the people who is also keeping the stock inflated. Good luck!


On Oct 19 06:46 PM David White wrote:

> mallarde: I would never risk too much on any one investment. i think
> my premise it correct. However, the market has often made fools of
> better, more experienced men than me.
>
> I do agree with you about the international sales. They have toouted
> them a lot. They will bring in some money. However, it is doubtful
> that they will be extremely profitable. The average price of the
> motorcycles sold in India is in the $1000 to $1500 range. India slapped
> a 100+% tariff on HOG. The cheapest bike they will sell there will
> be a normally about $7000 bike, which will retail for $14000+ due
> to the tariff. It's hard to imagine many Indians wanting to pay this
> kind of premium price.
>
> In China they have tariffs too. They also have laws around most of
> the big cities which prohibit the use of powerful motorcycles within
> a certain number of km of the city limits. This effecively excludes
> a lot of HOGs.
>
> Both China and India are huge markets, but they are going to be hard
> for HOG to penetrate under the current circumstances. HOG will more
> likely lose money in these areas trying to penetrate these markets.
> In the long run that may pay off. In the next two years it seems
> more likely that HOG will lose money in those markets.
>
> HDFS will likely lose increasingly more money until at least mid
> 2010, the predicted peak credit card charge offs.

Oct 23 07:38 AM

[David White:]

Sorry about not referencing my instablog about the UK GDP data here sooner. It really had a lot to do with how you likely wanted to play today. UK GDP was -.4% vs and expected +.2%. This was very bad news. Plus it virtually ensured a rise in the USD Index. This in turn put pressure on oil and other commodites. This pressured commodity related stocks. Since oil is topping (or seems to be), a reversal in oil will help this play. The UK news seems likely to help the USD for several days. The USD seems to have bottomed against the Yen, and it is heading upward. A lot of people are saying 1.50 should be the bottom for the USD against the Euro. There should be limited downward pressure at least. All this means commodities and commodity related stocks should tend downward (dependent on other news too) as long as the USD Index keeps heading upward. This situation should help the HOG trade.

Oct 23 12:52 PM

[David White:]

NSN: There are relatively few celebrities. The middle class guys are still likely to be conservative next year. High unemployment with little job growth and high credit card charge off rates will see they remain so. The Wells Fargo analyst (and apparently you) are thinking that 2010 will be just another year. That's unlikely. It will still be a hard one -- a conservative one. Plus HDFS will have accelerating losses into the middle of 2010 and possibly beyond. The credit card charge off rates are predicted to peak then.

We still haven't seen the real fall out from the commercial real estate problems. This is likely coming in late 2009 and 2010. When it does, unemployment will likely worsen.

Oct 23 12:59 PM

[NSN:]

David-
Great work on putting together lot of information.

What I was trying to figure out was logic behind the stock price jump with high volume 2-days in row after the earnings were out. It seems so illogical for the earnings they posted. I have been following this stock for quite some time and strongly believed someone is cooking filthy platter on this one. I would short this only if I have the stomach to hold on to it for at least 2/3 quarters so real colors show up.

Who knows this analysts/companies who they are hangin-out with and what they are cooking.
(I smelled little Bacon today) After what we heard about fraud on insiders trading, anything is possible. I think this stock is so much similar to Enron kind they may take it to reall high before fall.

Beware and good luck

NSN

Oct 23 05:00 PM

[INVESTGROUP:]

GOOD BYE AMERICA!
well, the world is getting smaller and smaller.
once america was number 1, but can anyone honestly with a sound mind and not with an ego bullshz redneck way, still say america is number 1? when the great hogs are begin pulling out of america and start having their low riders born to be free, made in a different country that has never experience real freedom, but has only dream about it.
has our great american pride of a company harley davidson abandon it

Oct 31 06:07 AM

[INVESTGROUP:]

GOOD BYE AMERICA!
well, the world is getting smaller and smaller.
once america was number 1, but can anyone honestly with a sound mind and not with an ego bullshz redneck way, still say america is number 1? when the great hogs are begin pulling out of america and start having their low riders born to be free, made in a different country that has never experience real freedom, but has only dream about it.
has our great american pride of a company harley davidson abandon it's own people that has made them so much money, that has made them a world known name?
it seems like harley davidson will follow just like every other company and has given up on it's own country and people. it's called greed. you have these ceo's, the boss hogs wanting their million dollar bounus and there are so many upper hogs that they can not afford to pay a "nobody ", "a pee-on ", a free american that may have children to raise, to educate, a mortage, or just wants to take his pay check on the road every chance they get. but can this continue to happen for this great america? for the great melting pot of the world? i say F NO!
this great nation has turn a corner in the pages of time. this country was built on wealth and greed, oh yes lots of greed it was built on from the first boat that landed here.
this county has done alot of bad things to get were it is today and it also has done alot of good things too, but it still doesn't justifie the bad in no shape or form.
but if you think about it, what are these companies really doing? i was once told by the owner of a world known company, that has many offices around the world. he told me you pay your workers just enough to place a small down payment a house or new car, but not enough to pay it off. just keep them in debt and more likely they will stay with you longer.
isn't that what happen back in the day.
well i'm getting side track and i should wrap this up.
so i will say to HARLEY DAVIDSON, go ahead and take your az z out of this country that made you who you are today and take all your CEO'S with you that are taking in million dollar bonus.
go ahead and have your great american, born to be free scooters made in a country that only dreams about being free.
go ahead HARLEY DAVIDSON leave country and all these great american people, so that you can pay a worker that doesn't live in a freedom counrty 3 dollars a day, so that you ( harley davidson can keep paying those millions of dollar crazy bonuses.
yes sir, HARLEY DAVIDSON, you have employed many great american people and you have provided them with something to eat, but think about what you could have done by taking and paying out a nice salary to the upper and share those billion dollar bonus with your laborers, the nobodies, the pee-ons.
just think HARLEY DAVIDSON, one of your pee-ons might have been able to send one of their children to college that would become one of your upper statemans and the kicker is MR. HARLEY, is that you could start the greenhorn of 1/4 of what your paying your other coney, so there is a benefit for you too, HARLEY DAVIDSON'.

so i wrap this up and say,
go ahead HARLEY DAVIDSON and take your million dollars CEO'S so that you can make more profit and get the F out of this country, excuse me, and get the F out of this country! i had to say it again. the f wasn't loud enough.

Oct 31 06:10 AM

[mallarde:]

NSN, if I may offer my own opinion on this: Presuming that there is no manipulation of the stock, I think that the market was responding to the message put out by corporate. The message as I heard it was "we are getting back to basics and will fully leverage the H-D 'brand.'"

This message has real appeal to Wall Street types who can only see one quarter ahead. We know that H-D already has been trying to leverage the brand. In fact, they have been raping the brand, to put it bluntly. They have been savaging the brand to make money now, but the brand will suffer in the longer term from overexposure on belt buckles, jewelry pendents, etc.

So to me their message is only a sign of desperation. To Wall Street's ears, it means higher profits off of less capital investment -- the investment in the brands with less margin. Of course, we know that Wall Street likes progressively higher earnings each quarter even if it means the train goes off the rails. From Wall Street's perspective, full-size Harleys are like crack. Buells are like run-of-the-mill powder cocaine. Why waste your time on powder coke when you can put all your investment in the more powerful crack? "Let's just smoke crack!" management tells us.

H-D could only more fully "lever" the H-D brand if they opened a chain of strip clubs or starting licensing the logo to bratwurst makers. I mean, what sort of merchandising is left that they are not already participating in?


On Oct 23 05:00 PM NSN wrote:

> David-
> Great work on putting together lot of information.
>
> What I was trying to figure out was logic behind the stock price
> jump with high volume 2-days in row after the earnings were out.
> It seems so illogical for the earnings they posted. I have been following
> this stock for quite some time and strongly believed someone is cooking
> filthy platter on this one. I would short this only if I have the
> stomach to hold on to it for at least 2/3 quarters so real colors
> show up.
>
> Who knows this analysts/companies who they are hangin-out with and
> what they are cooking.
> (I smelled little Bacon today) After what we heard about fraud on
> insiders trading, anything is possible. I think this stock is so
> much similar to Enron kind they may take it to reall high before
> fall.
>
> Beware and good luck
>
> NSN

Oct 31 01:22 PM

[NSN:]

David White:
Can you comment on following from
"www.cnbc.com/id/337972..."

"Warren Buffett and the Crisis: 'Brilliant Moves Interspersed with Some Surprising Errors'"

"Treasury yields soon reached zero, but the flood of money failed to open the channels of business lending; credit remained virtually nonexistent. Buffett, who was at the time acting as the economy’s greatest cheerleader, lent at interest rates that in some instances bordered on usurious—$150 million of twelve percent notes in Sealed Air; $300 million of Harley-Davidson debt for a fifteen percent interest rate; $300 million of ten-percent contingent convertible senior notes from USG; $250 million of Tiffany bonds at ten percent; and a $2.7 billion, twelve-percent perpetual convertible stake in Swiss Re that would give Berkshire a thirty-percent ownership in the insurance giant."

What does it mean to HOG? I am unable interpret the end result. Does it mean HOG got lucky @Buffet's expense?

Also any other analysys from you, What is going on with HOG based on the SEC Financial statement they filed.

Thankyou,

NSN

Nov 10 04:21 PM