Thursday, July 3, 2008

HOG Wild

Sometimes while I am driving in my car I sit there salivating and admiring the freedom exhibited by motorcycles I see on the street. Unfortunately for me I have a beautiful wife who loves me dearly and does not want to see me injured by riding one of these bad boys. If you are smirking while reading this because you have one in your garage... then screw you. If you are like me and can only live vicariously through others, then read on.

In my lala world, this is the bike I would be riding. My other bike would be in the garage, most likely a Ducati Monster or something like that. I'd have a black helmet, tinted visor, a 3/4 cut New York city style leather jacket, and a regular pair of jeans... wait, maybe if I had biceps like Bruce Lee, I'd wair a tank, and go out and get a matching tatoo across my forearms...

Some of you may cringe at this vision, because you'd rather be seen riding a different Harley, but decked out like Angus Young from AC/DC, or someone from Pearl Jam. The point I am trying to make, is that Harley resonates with people from different walks of life. I don't have to go into details about how strong Harley's brand is, or how people associate these bikes to their lifestyle. Each Harley owner "customizes" how they want to look on these bikes. If you tell me you don't sit back and wonder what kind of threads you would wear while riding a Harley, then you are lying.

So, what is a guy like me who has "my lovely wife loves me and doesn't want to see me die on a Harley" syndrome to do? Well, you can own a Harley by buying up HOG shares. This is a stock that turns up using Joel Greenblatt's magic forumla system. Return on Average Assets for 2007 runs at 16.69%, and price to earnings multiple of 9.74.

Last Thursday during the Dow's dive, I mentioned that I was going to go shopping. Harley Davidson was on the list... but I didn't pull the trigger until today. I do know that Harley is experiencing problems collecting on customer loans, and that prospective Harley buyers are tapped out on credit. I think the strategy going into this bear market is to pick up quality companies run by good management that are currently on sale and that will do well when the economy turns around.

My full analysis report will come. Lots of homework to do. I'll be publishing these reports in the following order:

- Herman Miller (MLHR)
- Harley Davidson (HOG)
- Intevac (IVAC)

If there is anything you'd like to see that I didn't cover from my other analyses, please let me know. In the mean time, ride on!

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