mallarde

Ten Most Prominent Underperformers in Corporate America

Why should we be offended when you declare that someone we have never met and who appears to be a bumbling fool on television is smarter than us?


On Nov 14 10:32 AM bobbybutte wrote:

> as aperson who allocates capital for aliving I dont see BAC as being
> an underachiever
>
> hedge fund guru john paulson has taken a huge stake and no offense
> but he is much smarter than anyone here who posts

Harley-Davidson: Opportunity Exists to the Downside

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

The Future of U.S. Consumer Spending: It's a Generational Thing

Living in Southern California, I would say that Japan has "good" demographics and the U.S. has "bad" demographics. If millions of poor and uneducated people fuel population growth in the U.S. -- as they decidedly do in CA -- then this is "bad."

True, Americans might consume more in aggregate, but so what? It's an economic sinkhole. We can always export like the Chinese, correct?


On Oct 22 06:11 PM User 353732 wrote:

> The Japanese had( still have) bad government, bad demographics(worse
> now) and good global competitiveness during the lost decade......which,inci...
> is now becoming the lost 2 decades.
>
> The US has bad government, good demographics and bad global competitiveness.
>
>
> Bad Government trumps everything else. Having an expanding labor
> force with relatively poor skills amongst the bottom third, high
> unemployment and underemployment , high debts and no credit does
> not lead to sustainable good quality growth.
>
> Demographics matter, of course, and matter hugely in the long term,
> but National policy, priorities and will matter even more in the
> near and medium terms.
>
> In America the tremendous liability of Bad Government overwhelms
> the great assets of good demographics, astonishingly good endowment
> of natural and technological resources and the entrepreneurial drive
> of small and new businesses

Harley-Davidson: Opportunity Exists to the Downside

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.)

Harley Davidson Executives, Investors Wear Generational Blinders

Nighttrain, meet one rider who has no desire to ride a Harley. Ever. Unlike Harley riders, I ride everyday. Not just Sunday when I get to play dress-up with my pals and annoy people at outdoor cafes so they notice us. ("Don't deny how loud my exhaust is, beautiful people! You must now acknowledge me! Hear my exhaust pipes!")

Harley-Davidson: Opportunity Exists to the Downside

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.

Harley-Davidson: Opportunity Exists to the Downside

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.

Harley Davidson Executives, Investors Wear Generational Blinders

Thanks for the article. I have been repeating many of these points myself. My sense is that Wall Street analysts are so detached from the motorcycle marketplace that they don't understand any of this. This provides us with an opportunity, it would seem.

Are we allowed to talk about groups of people being smaller and less able to ride large motorcycles? Someone once picked a fight with me when I posted something similar.

Harley-Davidson Q3: Earnings Miss, Guidance Narrowed

I just listened to the conference call and now I think I understand what the plan is -- Harley-Davidson-branded energy drinks.

Really, the notion of a strategy of expanding H-D branded products seems almost like a joke. How much more overexposed could the brand be? C'mon. This "flogging the brand" is destructive in the long term. More H-D belt buckles? More H-D studded pants? Could they be any less creative?

It sounds to me like all the bluster about a "plan" in the call is just these guys reading off of a script and repeating tag lines they think the analysts want to hear.

Also, the mantra of sales in Asia seems like a Hail Mary. International sales were down this quarter by a healthy amount. And this is where they plan to shift their lower sales in the U.S.? Does anyone really know whether people will ride these big bikes in Asia? They are freakish-looking here. In Asia? Impractical beyond description.

And the self-serving comments about the youth market seemed empty to me. H-D does not resonate with the youth market around California. I suspect it does not in most places.

I am underwater on my short position -- today's move was remarkable -- but will be thinking of adding at these levels.

Harley-Davidson Q3: Earnings Miss, Guidance Narrowed

I have not reviewed any of the numbers in detail or carefully analyzed the statements of HOG exec.'s, but the news sounds very negative all the way around.

Presuming that the move up today was not 100-percent manipulation, the market must have been responding positively to HOG's plan to drop Buell and MG. The market is dead wrong. HOG is throwing in the towel [complete with H-D logos on it] on ever breaking out of the V-twin, air-cooled corner it has worked itself into.

Think about how BMW fought to break out of its "boxer" engine to avoid falling behind technology. It's boxer engine never died, but now BMW has a broad portfolio of bikes with at least 3 completely different configurations.

HOG's retrenchment dooms it to its little market niche whose audience is getting old and will not continue throwing money at an absurd trophy disguised as a vehicle. I see BMW thrashing to capture a younger market. In contrast, HOG is just "cruising" to its inevitable demise.

I guess Wall Street still can only think one quarter ahead.

Recession Is Over; Depression Has Just Begun

Thanks for the wonderful analysis. An aside: maybe we do not see soup lines today like in the Great Depression, in part, because our material wealth -- including food production -- so far outstrips material wealth in the 1930s. Just a thought.

HOG Is About to Catch Swine Flu

Anyone who ripped on David want to reevaluate? Anyone else hear of many people getting sick? I have a feeling that getting the flu does discourage such purchases as an overweight, overpriced weekend chrome carnival toy.

The Hidden Depression of the 2000s

At some point, the U.S. simply must come to terms with what ills its labor market. In particular, the U.S. cannot allow unlimited outsourcing or cheap imports from Asia and elsewhere. Also, the U.S. cannot continue allowing millions of "workers" -- legal or otherwise -- into the country to boost the labor supply and depress wages. Americans must have jobs that can pay them living wages before the economy can be healthy again.

What seems to be happening is that Obama is flooding the market with credit and government spending to delay the pain -- like giving morphine injections to a badly wounded soldier. At some point, you have to treat the wound.

I see no policymakers or "experts" talking about the above. Until this starts to happen, I do not see how we will avoid continuing down the same path.

HOG Is About to Catch Swine Flu

OK, now HOG is going to catch swine flu. Time to give back some of the frothy gain based on the notion of Indians saving HOG by buying ridiculous cruiser bikes. Are they going to start snapping up our retro muscle cars also? Dodge Charger? Corvettes?

Capacity's Comeback Strongly Indicates Recession's End

Everyone has said, and I'll try to put it slightly differently. A "recovery" must be more than the market going up and people on CNBC acting giddy. Our economy has structural problems. We have allowed jobs to flow out of the country and millions upon millions of poor -- and not so poor -- workers into our borders to compete for the jobs that remain.

Seeing the return of speculation in the financial markets should not impress us. Americans must change the way they live. They have no bubbles left to cash in on and working for a living got a lot harder. (Maybe we will have a "recovery" limited to the wealthy class.)