The S&P Declared Harley-Davidson's Stock Junk. Shows Investors Are Only Interested In Making Themselves Rich

Short-term pain for long-term health. It's a phrase that's used in almost every aspect of our lives, as nothing worthwhile happens overnight.

Think about your own health as an example: when you start working out, it sucks. You're winded, overweight, can't lift for the life of you, and you feel battered, broken, on the verge of death, and just wanting to lie down and give up. Then, after a few weeks to months, you're lifting heavier stuff, that run gets easier, your chest doesn't feel like it's going to collapse, and you're even thinking about prolonging your workout session further because of it. Short-term pain for long-term health. 

Investors and their ilk, however, are allergic to such ideas. Line goes up now, always and forever.  

See, the investor class wants immediate and constant returns on their investments. They've paid into it—i.e., buying shares of a company—and that buy-in is meant to make them more money. And more money right now. Money from the jump. And they get jumpy when that might not happen and start declaring that the world is ending. The sky is falling.

There's no time to build anything. No time to restructure. No time to do something like short-term pain for long-term health. No time to fix a company that's been as badly broken as Harley-Davidson has been, which is why the S&P Global Ratings have recently declared the Motor Co.'s stock as "junk." Not because of those broken appendages, but because it's setting those broken bones. The reasoning basically amounts to, "Yeah, Harley is restructuring and fixing itself and making bikes with lower margins for the average person, but we don't like that and won't make any money right now!" 

What BS.

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Harley has been through the wringer lately. Its sales have spent the last two decades in decline. The company's demographics and customers have become ancient compared to others within the space. Its lineup is chock-full of motorcycles that cost two arms, a leg, and a spleen. And its work with EVs has been...not the best. There's also been a host of public drama that's forced the Motor Co. to respond in ways that have put it on the back foot, including a boardroom brawl, its labeling as "woke," its CEO leaving and subsequent search, and a very public dust-up with its main rival, Indian Motorcycle. 

Yeah, it hasn't been smooth sailing for America's most famous motorcycle company, and it hasn't been smooth for a long while. Yet, in the last year, there have been signs of reinvigoration pointing toward a return to form. 

Newly appointed CEO Artie Starrs has reportedly worked toward reestablishing better relationships with the company's dealers, which were more than strained during the Jochen Zeitz era. Dealers are now backing the Starrs' regime, including defending the executive when Indian launched its attack campaign against him. Starrs' tenure also saw Harley's LiveWire acquire Dust Moto, a small EV dirt bike company, which is set to help LiveWire get into the hottest motorcycle market right now with its Dust offering. 

The brand also brought back the Revolution Max engine manufacturing to the United States, something the Union has wanted for years. And introduced the RMCR Concept, a cafe racer built for folks who want the rumble 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 sits below the finally returning Sportster and the Nightster. A motorcycle for the time and place we all reside in, where people can't afford $20,000 motorcycles, let alone $40,000 ones. 

See, if you haven't been paying attention to the economy as of late, you might not know that affordability is a big pain point with literally everything. Gas, groceries, rent, mortgages, healthcare, and childcare are all nearly impossible to afford at the same time. Hell, just life is more expensive, as inflation is rampant. Yet, wages are stagnant and have been since the late 1990s. That means the dollar just isn't what it once was, and frivolous spending has been cut, i.e., spending $30,000 on a bagger.

People still want motorcycles, though, which has made cheaper, more entry-level-style bikes all the more attractive and lucrative. It's why Triumph and Royal Enfield and Honda are all having banner sales years: They all have piles of small-displacement, cheap motorcycles. Yet, it's Harley's push to those smaller-margin, more sales-volume-angled bikes that's caused the S&P to grade the company as junk, and why these investors should be yeeted into the sun. 

According to Bloomberg, "S&P Global Ratings cut Harley-Davidson Inc.’s credit grades to junk status on Wednesday, citing the company’s strategy to start selling lower-cost motorcycles to boost revenue. The motorcycle maker’s plan could lift retail sales and market share, but will pressure profitability for some time, S&P said in a statement." 

But as a long-time observer of Harley-Davidson, what the hell was the alternative? Do nothing, have the stock remain whatever, and let the company slip into a death spiral? If anything, I feel like this is the exact time to buy into Harley-Davidson. The company, as it seems right now, is seemingly on an upswing and in the right direction. It might not be making waves with splashy stuff like adding "AI" to its exhaust or whatever—a trait investors absolutely gobble up despite AI being literally useless and likely a massive bubble—but it's fixing its house and stabilizing the foundation.

I just don't get it. Maybe that's why I'm not an investor or rich guy, though? Maybe lacking an institutional knowledge of a subject or grasp on reality is actually the way to succeed these days? Maybe I should just look at the short-term and maximize investor profits with everything else being damned!

That'll surely work...

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