Born To Be Wild

“I'll never be able to buy the Hahlee Dayliz. It keeps getting more expensive!” This sentence is packed with deep emotions and sober insights from the world of a six-year-old. First, there’s the power of the brand, even before he can properly pronounce it. And second, the intuitive grasp of inflation.

My youngest son is obsessed with motorcycles. Not just any motorcycles, mind you. It has to be a Harley-Davidson. He's gradually learning to pronounce the name correctly. His fascination runs so deep that we have to visit the Harley store in Vienna. He can easily spend a Saturday morning there. His 8-year-old sister tags along, but her interest wanes quickly.

A capital-intensive icon

For 120 years, the company has been cultivating a worldwide cult following. There are already over one million HOG members. HOG stands for “Harley Owners Group”. Gutmann, however, has never invested in Harley shares. Despite the strong brand, the business model is capital-intensive and faces fierce competition. During the 2008 financial crisis, the company’s very survival was in question. Warren Buffett loaned $300 million to Harley-Davidson at the time. Who knows, had the crisis lasted a little longer, this iconic motorcycle brand might now be part of Berkshire Hathaway.

At least the power of the Harley label allows the company to pass inflationary price increases on to eager riders. This probably explains my son's fear that he‘ll never be able to afford one of these bikes, despite his diligent saving habits. He regularly enquires about his savings balance, only to face disappointment when he realizes that a Harley is still out of reach. We’ve also discussed several times at what age one is allowed to ride such a heavy machine in Austria. I'll just say this much, it's not as simple as it was in my youth. Gone are the days when you could get your motorcycle license at the age of 18 and hit the road. Probably for the better.

But that doesn't mean that the euros he has saved and received as gifts from relatives need to sit idle in his savings account. Despite his tender age, my son is already an investor, with his money going directly into a fund savings plan.

And one day, when he is old enough, individual stocks will also be added. Just as we did with my two grown-up sons. And who knows, maybe it will be Harley shares instead of the actual motorcycle. As a dad, I’m left wondering which Harley endpoint would truly be the smoother ride for us.

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