HS Dent has an ongoing commentary on the Harley-Davidson Motor Company.  As any of Harley’s dedicated (fanatical?) fans worldwide will tell you, the company makes excellent bikes.  In addition to the quality craftsmanship, Harley comes with a certain image and a feeling that can’t be replicated.

Unfortunately, it also has an extremely narrow customer base: the typical Harley rider is a white male in his mid to late 40s.   Two important factors tend to converge around that age: the mid-40s is when the male mid-life crisis tends to hit.  And, perhaps equally importantly, the average American man lacks the disposable income to afford a Harley until he reaches the peak earnings years of his 40s (or, perhaps recently divorced in his mid-40s as many Americans are, the man finally has his wife out of the way and feels liberated to blow his money on toys for himself again). Read the rest of this entry »

Americans are used to buying cars and appliances on installment plans, but clothes?  

The Financial Times reports that Levi Strauss & Co. will be offering its jeans on an installment plan to Indian consumers.

India has had a vibrant consumer economy for years, driven by a rising middle class.  We view this as a positive for the world economy; more Indian consumers means more global demand, after all.  But in our view, Levi’s installment plan marks a move in a very different direction. Read the rest of this entry »

 We have an ongoing commentary on India, a country with almost unlimited potential but also with a LOT of problems that have to be resolved first.  Among emerging markets, we are attracted to India primarily for:

1. Its sheer size
2. Its orientation towards domestic consumption vs. exports (this makes the country less susceptible to contagion from global economic crises and weak demand from Western importing countries)
3. The country’s youth — with such a young population, Indian aggregate demand will only grow.

But, as we said, India is not without its problems, which include vast rural poverty and illiteracy, an antiquated caste system that still seems to linger on into the modern age, stifling governmental bureaucracy, a vast educational and wealth divide between the “haves” and “have nots,” and — the focus of this post — truly horrid infrastructure.  

The odd thing is, most of these complaints, including that of poor infrastructure, have been heard since the early days of the British colonial period! Read the rest of this entry »

In a prior post on India, we wrote, “India—which never enjoyed the export-fueled growth of her emerging market contemporaries—continues to plod along.  While there has been much to criticize about India’s economic policies in the past (and today too, for that matter),Indiamay well emerge from this long-term recession as the new economic leader ofAsia.”   A few days later, we wrote in a follow-up, “Unfortunately, the “good” countries who followed the economic rules have gotten punished…hard.  Meanwhile, the “bad” countries, who broke all the economic rules have survived relatively unscathed.”  Today, we see more evidence that India’s “bad” behavior has been rewarded.  The country’s rather dirigiste economy, in which the dead hand of government is quite a bit heavier than in most countries, continues to hold up relatively well.  Read the rest of this entry »

This week’s Economist covered several themes that we ourselves have been covering for the past several months, but we thought we’d start with this gem of a quote:

“The public is scared and uncertain; the politicians are panicky and confused. They are leading each other around and down a worrying spiral of ignorance.”  From “The Spiral of Ignorance”

This certainly seems to be the view of the market.  With the government reluctantly tiptoeing its way into a de facto nationalization of the banking system, the message being sent is one of uncertainty.  And the market hates uncertainty. 

Read the rest of this entry »

A lot of ink was spilt in the past few years about the glories of globalization and free trade.  We are big believers in the virtues of free trade, and we were happy to see world policymakers move this direction (even if it was in direct opposition to public opinion).

The problem is that in an integrated world economy, the trade partners that grow rich together also go broke together.  We wrote about this at length in the May 2007 issue of the HS Dent Forecast.(“Going Down With The Ship”), and more recently in the pages of this blog. 

Read the rest of this entry »