Month: January 2019

Harley has another Howler

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Harley-Davidson (HOG), perhaps the most iconic form of discretionary spending, came out with a howler set of Q4 numbers.  Revenue down 9% and operating losses in the last period. FY operating income fell 30% on revenues that finished 1% up. Domestic sales for the 2018 year fell 10% while international sales were flat. Worse was guidance pointed to unit sales falling between 217,000 & 222,000 units down from 228,000 in the fiscal year just past. This new range of unit targets would mean a decline for five consecutive years. If this pattern continues into 2020, luxury competitor BMW, which targets 200,000 units, will likely even up the tally, despite being less than half HOG was in FY2012.

Operating margin guidance for the motorcycle segment is forecast at 8-9% in 2019 down from 12% in 2017.

In June 2018, CM wrote, ““Harley-Davidson (HOG) is the classic case of a divine franchise. While still the world’s largest maker of cruiser motorcycles, it is being swamped by new competition. HOG’s EBIT performance has slid for the last 4 years and is even below the level of 2012…Sadly for HOG, 1Q 2018 has revealed even worse numbers. Global unit sales were 7.2% down on the previous year and 12% down at home.  Japan and Australia were soft. Looking at the strategy it looks like throwing spaghetti at a wall and hoping it sticks.

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Harley may have a grand master plan to incubate 2,000,000 new riders and launch 100 new bikes out to 2027, but all the while they remain stuck in a design studio, the competition, including the Japanese, keep stealing sales away from the Milwaukee icon.

The strategy looks completely unrealistic because growing 200,000 new bikers a year for a decade in the domestic market would mean that based on 2019 global unit sales projections,  92% of customers would need to be brand new, not repeat or existing. However the plan is to grow in the US where it had 138,000 sales in 2018 that would mean new customers would need to be 145% of all current sales in the US. No auto maker on the planet has ever had such pie in the sky assumptions for cultivating new customers, much less at that pace for 10 straight years. How can the board of HOG honestly think this is even remotely achievable? Sadly the company has been too eager conducting buybacks to flatter EPS. Net income for HOG was +1.8% for FY2018, diluted EPS was +5.6%. Time to stop playing games and properly delivering for shareholders.

Democrites

US Senator Ted Cruz gave a pointed speech around the hypocrisy displayed by the Democrats over the border wall, something they all passed in 2013 to build 350 miles worth when in power. Cruz unmasks the real modus operandi from 5 minutes into his speech.

Yes many can’t stand Ted Cruz but if a bill was put forward just to pay the Coast Guard during the shutdown the Dems all voted against it even though it was not contingent on the discussions over the wall. So insane is their hatred.

Oh, the irony

Oh the irony. Poor young Greta Thunberg was invited to speak at Davos. She may have wanted her audience to panic but it might have been better for her to focus outside her window on landing so she could see the utter hypocrisy of those she was addressing and their chosen mode of transport – 1,500 private jets.

Still, like the UN COP summit just past, we are supposed to believe that a 16yo has all the answers. Why go to university? What is the value in further education if a kid not even out of high school is smarter than all the adults in the room?

What a farce. The word “panic” says it all. It is hard to know who to believe. Thunburg? Alexandria Ocasio Cortez has only given us 12 years to live. Even The Pentagon wrote a report in 2003 that suggested by 2020 climate change would cause nuclear war, famine and natural disasters costing millions of lives. Not long to go til we get confirmation.

What next?

The left has a real dilemma. Apparently scientists in Japan think that “stress” caused by climate change will lead to lower birth rates of boys. If the planet warms, toxic masculinity will decline naturally. Save the planet and the risk having a surge in bro-culture. Maybe that’s why they push so hard to indoctrinate kids at such a young age to prepare for a naturally cooler globe.

Naomi Osaka edition Nissan GT-R sells out

While Carlos Ghosn maybe wasting away in a Tokyo detention centre, Nissan is not wasting the talents of Naomi Osaka. At a puffy ecomentalist launch of the new Nissan Leaf EV, one of the board director’s asked the then just crowned US Open winner what car she’d like and without hesitation it was the GT-R. Why? “Because it is fast.” So despite breaking every politically correct rule as goes a green car launch, Nissan got religion and sold out 50 Naomi Osaka edition GT-Rs in a heartbeat. It looks like Naomi run #2 reservations can be made in Feb. Capitalism wins again. Surely the margins on Naomi GT-Rs will outstrip any margins made on Naomi Leafs.

Watch Japanese companies fumble over getting her to star in their commercials. You know what? Best to buy a basket of Naomi Osaka stocks on the TSE. CM wrote a piece on stocks and Japanese idols – there is correlation! Smaller caps tend to benefit more. Valuations largely irrelevant.

As CM wrote it is any wonder a financial institution hasn’t made a Naomi ETF?

How hardcore are you really?

Once again the pill testing argument will rear it’s ugly head after 14 Australia Day revelers were hospitalized at two events, the HTID and Electric Gardens concerts. 6 remain in critical condition. At what point will we hand responsibility over to ‘legal’ adults?

If voting age party-goers are caught with ‘illegal’ substances then charge them accordingly. If people don’t like the law then put action behind a proposal to change it. Despite police sniffer dogs, people smuggled in drugs in condoms and ziplock bags presumably hidden in the nether regions. Coffee grounds were used to throw off the scent.

The real question is if one is hospitalized, why should tax payers pick up the tab for their selfish, reckless behaviour? Would it be a deterrent to let them know that any medical treatment (likely expensive) would not be covered by the state? Put measures in place to ensure the bill is paid for out of future income tax or lowered dole payments. Then let these adults work out the risk reward ratio of taking illicit drugs. Instead of having OD survivors tell horrid tales, they might talk of the financial penalties that followed which have made life considerably tougher than going cold turkey.

If you take illegal pills, don’t say we didn’t warn you. Let’s see how hardcore you really are.” That should be the slogan. Flash up the average cost of an OD treatment on the big screens.

Charlie Chaplin & Albert Einstein

Shared by a former client:

When Albert Einstein met Charlie Chaplin in 1931, Einstein said, “What I admire most about your art is its universality. You do not say a word, and yet the world understands you.” “It’s true.” Replied Chaplin, “But your fame is even greater. The world admires you, when no one understands you.”

Hottest temperatures ever in Australia?

Jo Nova puts together a simple summary of the history of heatwaves in Australia. It is worth reading. Even our Bureau of Meteorology ignores records going back to the 1890s because it fails to fit a narrative. Worse, South Australia (SA) is suffering from blackouts thanks to loony green renewable policies which have seen spot electricity prices surge to $14,500/MWh. Wretched coal fire powered states, NSW & QLD, are in the $105-$110/MWh range. What was the rationale that renewables are cheap, affordable and reliable? The irony is that SA is relying on diesel generators for back up. Thank God for fossil fuels!

Not to worry. We have the world’s elites on 1,500 private jets landing in Davos to tell us we need to save the planet! Their cooler heads will surely prevail.

 

56mn abortions a year. Worth celebrating?

Virtue signaling. Lighting up monuments is the way progressives like to show how ‘woke’ they are. Usually towers and buildings have light thrown upon them after terrorists murder innocent civilians. It is the perfect way to show future terrorists that the West will continue to remain impotent.

Of course love trumps hate is a strategy for liberals. Would be terrorists undoubtedly have pangs of guilt when seeing a building lit up. Deep in their hearts, the defining factor in choosing not to eviscerate concert goers, spray AK-47 fire at cartoonists or run people down in trucks comes from seeing the masses splash French flags over social media avatars.

Still, how crass can NYC be to bathe skyscraper towers to celebrate abortion? Surprised they didn’t invite Michelle Wolf to do her abortion sketch on taxpayer dime in Central Park! What better display of a government acting in the interests of only some of its constituents.

By all means CM respects legislation introduced via democratic process. However is it necessary to champion the terminating of fetuses? Why not conduct a fireworks display for added effect? It is hard not to see it as anything other than an overt and deliberate slap in the face of the pro-lifers and the current administration. Just as easy to pass the legislation without flipping the bird.

Let’s look at the stats.

c.700,000 fetuses are terminated in America each year. Down from 1.4 million in 1990. Hardly stats to cheer about. Of course the arguments for a woman’s right to choose will always be thrown at pro-lifers. Yet allowing termination until birth?

Eurostat statistics on abortion reveal that Germany, France, UK, Spain and Italy alone terminate a combined 760,000 fetuses per annum. Across the EU-28 there are 1.25mn terminations. Without getting into a debate on abortion rights, the pure statistical number points to 20.4% of fetuses never make it out of the womb alive.

According to the Guttmacher Institute some 56 million abortions occur annually. Every. Single. Year. Think that WWII saw 50 million deaths in 6 years of conflict with wide spread use of lethal weapons. So abortions kill at a far higher rate than global conflict.

How ironic that a leftist professor at Birmingham City University, Kehinde Andrews, accused WWII RAF pilots of war crimes. On that logic what does that make abortion clinics? Safe houses?

Take a look at the following photos if you’re game and ask yourself whether abortion is something to celebrate? Once again, this piece isn’t a cry to exert control over women’s rights rather question society and its approach to taking more individual responsibility.

Or are we mistaken to think that the real reason NY lit up these monuments was to lament for all of the fetuses with heartbeats that never had a say in the very legislation that killed them the day before delivery?