Short term pain for long term health. This is a phrase that is used in almost every aspect of our lives, because nothing worthwhile happens overnight.
Think about your health as an example: When you start exercising, it sucks. You’re flabby, overweight, can’t lift weights for the rest of your life, and you feel battered, broken, on the verge of death and just want to lay down and give up. Then, after a few weeks or months, you’re lifting heavier, running becomes easier, your chest doesn’t feel like it’s about to collapse, and you’re even thinking about making your workout sessions longer because of it. Short term pain for long term health.
However, investors and people like them are allergic to such ideas. line goes up nowForever – forever.
See, the investor class wants immediate and consistent returns on their investments. They’ve paid into it – that is, buying shares of a company – and that purchase means they make more money. And yet more money. Money from the jump. And when that doesn’t happen, they jump up and start declaring that the world is coming to an end. the sky is falling.
No time to make anything. No time to reorganize. There is no time to settle for something like short-term pain for long-term health. This is no time to fix a badly broken company like Harley-Davidson, which is why S&P Global Ratings recently declared the motor company’s stock “junk.” Not because of those broken appendages, but because it is mending those broken bones. The argument basically goes like this, “Yes, Harley is restructuring and revamping itself and making lower margin bikes for the average person, but we don’t like it and we just won’t make any money!”
What BS?
Harley has been through the ringer lately. Its sales have spent the last two decades in decline. The company’s demographics and customers have tended to be primitive compared to other companies in the area. Its lineup is filled with motorcycles that cost two arms, a leg, and a spleen. And its work with EVs… hasn’t been the best. There has also been a number of public dramas that have forced the motor company to respond in ways that have put it on the backfoot, including a boardroom controversy, labeling it as a “woke”, the departure and subsequent search of its CEO, and a Very public Defeated its main rival Indian Motorcycle.
Yes, everything hasn’t been easy for America’s most famous motorcycle company, and it hasn’t been easy for a long time. Nevertheless, in the last year, there have been signs of revival pointing towards a return to form.
Newly appointed CEO Artie Starrs has reportedly worked towards re-establishing better relations with the company’s dealers, which were quite strained during the Jochen Zeitz era. Dealers are now supporting Starr’s regime, including defending the executive when the Indian launched its attack campaign against him. Starrs’ tenure also saw Harley’s LiveWire acquire Dust Moto, a smaller EV dirt bike company, which is set to help Livewire tap into the hottest motorcycle market right now with its Dust offering.
The brand brought Revolution Max engine manufacturing back to the United States, something the union had wanted for years. and introduced the RMCR Concept, a café racer built for those who want the roar of a V-twin, but not the ergonomics of a traditional Harley cruiser. But most importantly, Harley will finally introduce an entry-level motorcycle that will sit below the eventually returning Sportster and Nightster. A motorcycle for the time and place we all live in, where people can’t afford a $20,000 motorcycle, let alone a $40,000 one.
Look, if you haven’t been paying attention to the economy lately, you might not know that affordability is a big problem with virtually everything. It’s almost impossible to afford gas, groceries, rent, mortgage, health care, and child care all at the same time. Hell, just living is more expensive because inflation is rampant. Nevertheless, wages are stable and have remained so since the late 1990s. This means the dollar is no longer what it used to be, and wasteful spending has been cut back, i.e., spending $30,000 on a bagger.
However, people still want motorcycles, which has made cheaper, more entry-level-style bikes more attractive and appealing. This is why Triumph and Royal Enfield and Honda have all been having banner sales for years: they all have stacks of small-displacement, affordable motorcycles. Still, it’s Harley’s push for those smaller-margin, higher-sales-volume-angled bikes that is why S&P classified the company as junk, and why these investors should be in the sunlight.
according to bloombergS&P Global Ratings cut Harley-Davidson Inc’s credit grade to junk status on Wednesday, citing the company’s strategy to start selling lower-priced motorcycles to boost revenue. The motorcycle maker’s plan could boost retail sales and market share, but will put pressure on profitability for some time, S&P said in a statement.
But as a longtime observer of Harley-Davidson, what was the alternative? Do nothing, will the stock remain worth anything, and let the company bleed to death? Whatever happens, I think this is the right time to buy a Harley-Davidson. As it looks now, the company is on the rise and in the right direction. It may not be making waves with showy things like adding “AI” to its exhaust or something – a trait investors swallow wholeheartedly despite AI being virtually useless and possibly a giant bubble – but it is getting its house in order and steadying the foundation.
I just dont get it. Maybe that’s why I’m not an investor or a rich man, though? Maybe lack of institutional knowledge on a subject or no grip on reality is the way to be successful these days? Maybe I should just focus on the short term and maximize investors’ profits while hurting everything else!
That will definitely work…
