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Latest Comments39 Comments
i2Technologies: Management Shenanigans
The GDP Effect of Lower Oil Prices
You are right that domestic oil production will have an effect over the long-term, but you wouldn't see a huge change in just a few months. But remember that if US workers are drilling for oil, they're not producing something else (which may or may not be as valuable), so the contribution to GDP is not so clear.
Disney: Mickey Mouse Accounting
Not at all. As you say, these should be considered assets as well as obligations (as alluded to in paragraph 5).
Office Depot: Dialing for Dollars
No cheapshot intended, just sending the message that investors must do their own investigation, and not simply rely on what they hear on the call.
-Saj
Misalignment: Compensating Management with Options
You are right that restricted stock was also involved, but your claim he was not paid in options is false. Here's a video where Fuld specifically admits to exercising various options for hundreds of millions of dollars (1:35 mark of the video): www.youtube.com/watch?...
Common Size Comparisons: Coke vs. Pepsi
A Look at US Debt Levels as a Percentage of GDP
The data is from the historical tables of the 2009 budget (www.whitehouse.gov/omb...). The article clearly states this chart is for public debt, while I believe you are quoting gross debt.
Cramer Likes World Wrestling Entertainment: Should You?
Is Harley-Davidson Losing Market Share On Purpose?
If you don't believe the market share numbers Grant and I are referring to, I encourage you to look it up rather than simply believing it's wrong. Let us know if you interpret the stats you find differently than we do.
Shuffle Master Is No Ace
Is Harley-Davidson Losing Market Share On Purpose?
You are right that HOG buyers are getting older. As a result, Harley has been heavily shifting marketing spend towards younger riders (a couple of examples I've noticed personally is they advertise on digg and Ultimate Fighting), but of course there is no guarantee that they will be successful.
But I think it's important to consider the price of this company. Surely there is a price for which you would buy this company (e.g. if the whole company was on sale for $1, would you buy it?). To me, the stock price has taken into account all the negativity you mentioned and then some.
Hi Joseph,
If you look at Harley's margins, you can see that they have a lot of room to cut prices and still make a profit. But rather than produce bikes to capacity, they've actually cut production to maintain price levels. This causes each bike to cost more to produce (fixed costs spread over few bikes). Therefore, what the CEO means by operating for the long term has to do with brand positioning. They'd rather remain a premium product priced at a level that many can't afford, rather than grabbing short term profits now (by filling production capacity and selling more bikes for cheaper) but losing that premium status.
Is Harley-Davidson Losing Market Share On Purpose?
Thanks for pointing that out. On Harley's conference call, the growth in the rest of the industry was attributed to the competition cutting prices and offering generous financing.
Is Harley-Davidson Losing Market Share On Purpose?
Is Harley-Davidson Losing Market Share On Purpose?
Hi Mallarde, Harley defines its market as engine displacements of 1250cc and up, so that's the market share I'm referring to. You are right, this doesn't include all bikes. Regarding the drop in units, I would agree with you that part of this is the fact that they probably don't want to take on risky loans, but its clear they have cut production, whereas they could have taken on the strategy of keeping production where it was and taking on these riskier loans to move product.
Oil Demand Should Continue to Fall
You are right, the reduction in demand is going to have to come from reduction in fuel for vehicles. It will take a while, I agree, but we do see signs of it happening already.