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  1. #1
    wonderer, wanderer gonesh9's Avatar
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    Investing in Bicycle companies

    Anyone know any good bikey companies that would be a good idea to invest in (stocks)? Or even know which companies are publicly traded and their respective stock symbols?

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    Quote Originally Posted by gonesh9
    Anyone know any good bikey companies that would be a good idea to invest in (stocks)? Or even know which companies are publicly traded and their respective stock symbols?

    Historically they have made lousy investments.

    The last North American one to be publicly traded was Cannondale - before it went in Chapter 11.

    The best listed bike Mfr right now is Giant Heavy Industries - trades on the Tiawan exchange and has in fact done pretty well over the last four or five years.

  3. #3
    Prefers Aluminum Sprocket Man's Avatar
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    Quote Originally Posted by toomanybikes
    The last North American one to be publicly traded was Cannondale - before it went in Chapter 11.
    I seem to recall Cannondale's stock symbol was BIKE. I did some research on the company as a potential investment before they filed Chap.11. It was motivated primarily by my love for bikes and the fact that I own a Cannondale mountainbike. At the time, the company was drowning in debt and no way I could justify any kind of investment in them. Sure glad I didn't!

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    According to this site, the pickings are slim indeed.

    http://michaelbluejay.com/sri/bicycles.html


    Shimano traded in the US back in 2000, then delisted. They are still traded on the Nikkei Exchange (7309 JP) is the symbol according to their web site. Foreign investments are a pain unless the company can be traded as an ADR, which Shimano doesn't seem to be, so you have to go through a broker licensed to trade in Japan. The possible foreign tax snafu's alone would steer me away from any stock bought on a foreign exchange unless it was about to flip the switch for its afterburners.

    Cannondale is almost a trend traders dream. Its chart looks like an oscilloscope read out. At an average of 6 cents/share, you could make a fortune buying and selling eleventy kazillion shares whenever it moves a nickel. Problem is trying to trade that many shares with such a low daily volume.
    Last edited by Hal Hardy; 07-26-05 at 11:01 AM.

  5. #5
    wonderer, wanderer gonesh9's Avatar
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    O.K., doesn't look like there's much. What about good socially and environmentally responsible companies in general?

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    I'm not pushing this guy and have no connection with, or knowledge of, him. He showed up when I searched for bicycle stocks.

    http://michaelbluejay.com/sri/index.html
    Last edited by Hal Hardy; 07-25-05 at 06:47 PM.

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    Quote Originally Posted by Hal Hardy
    According to this site, the pickings are slim indeed.

    http://michaelbluejay.com/sri/bicycles.html


    Shimano traded in the US back in 2000, then delisted. They are still traded on the Nikkei Exchange (7309 JP) is the symbol according to their web site. Foreign investments are a pain unless the company can be traded as an ADR, which Shimano doesn't seem to be, so you have to go through a broker licensed to trade in Japan. The possible foreign tax snafu's alone would steer me away from any stock bought on a foreign exchange unless it was about to flip the switch for its afterburners.

    Cannondale is almost a trend traders dream. At an average of 6 cents/share, you could own eleventy kazillion shares and make a fortune if it moves up a nickel. Problem is trying to trade that many shares with such a low daily volume.
    Not investing on foreign exchanges is simply losing out on many great investment opportunities. A good broker will be listed on any exchange / or co-respondent listed and will handle any tax reporting you need to do.

    Many of my best scores have been on European or Australian markets. By and large, the pickings on North American markets are slim, unless of course you want to buy Oil stocks.

  8. #8
    52-week commuter DCCommuter's Avatar
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    Bicycle companies are not necessarily socially or environmentally responsible. China and Taiwan are not particularly known for their working conditions or environmental standards, and virtually all bikes use parts from one of those two countries, even the ones with US or European brand names.

    There are mutual funds that specialize in socially responsible (whatever that means) companies. See for instance http://www.calvert.com/ . About five years ago I put some money in a Calvert fund. It has underperformed the market by an average of 2.8% over the past five years, and 2.1% so far this year.

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    Quote Originally Posted by toomanybikes
    By and large, the pickings on North American markets are slim, unless of course you want to buy Oil stocks.
    Or home builders. Two sectors. That is pretty bad, isn't it?

    I'm doing my own research, etc. and trade through an online broker so you can see my point. I don't have enough invested to make it worth it to go the full service route. Maybe someday.

    I was thinking maybe India or the Far East would be good for higher end bicycles now that their economies are beginning to perk, but then I remembered that the new lower middle class in India is now buying small motorcycles instead of bicycles.

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    Quote Originally Posted by Hal Hardy
    Or home builders. Two sectors. That is pretty bad, isn't it?

    I'm doing my own research, etc. and trade through an online broker so you can see my point. I don't have enough invested to make it worth it to go the full service route. Maybe someday.

    I was thinking maybe India or the Far East would be good for higher end bicycles now that their economies are beginning to perk, but then I remembered that the new lower middle class in India is now buying small motorcycles instead of bicycles.

    Yes - it is bad.

    I am of the opinion that in general North American Markets are far too richly valued, despite this I made well timed moves into Apple Computer at the beginningof last year and into one of the big Canadian Oil drillers. The Oil co has returned the worst of the two at slightly in excess of 300% for the year.

    I am frankly too scared to go near the Home Builders due to the valuations and my unease as to the continuing strength of the US home market. In spite of my mis-givings the stocks continue to roar and I have missed on some great opportunities there.

    I NEVER invest in mutual funds of any sort. Given the fees and costs associated the chances of break even are on the long side - I view Mutual funds as akin to betting against the house in Vegas - I will NEVER do it.

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    Quote Originally Posted by toomanybikes
    The best listed bike Mfr right now is Giant Heavy Industries - trades on the Tiawan exchange and has in fact done pretty well over the last four or five years.
    It better than doubled in price and split three times in 5 years. Not too shabby at all, especially for a bike company. I wish I could pick up a smidgen and hold it until the net profit at least paid for the Giant MTB I bought last week. Alas, it's out of reach for me exchange wise. It looks like they even pay a $3 dividend to boot.

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    Quote Originally Posted by toomanybikes
    Yes - it is bad.

    I am of the opinion that in general North American Markets are far too richly valued, despite this I made well timed moves into Apple Computer at the beginningof last year and into one of the big Canadian Oil drillers. The Oil co has returned the worst of the two at slightly in excess of 300% for the year.

    I am frankly too scared to go near the Home Builders due to the valuations and my unease as to the continuing strength of the US home market. In spite of my mis-givings the stocks continue to roar and I have missed on some great opportunities there.

    I NEVER invest in mutual funds of any sort. Given the fees and costs associated the chances of break even are on the long side - I view Mutual funds as akin to betting against the house in Vegas - I will NEVER do it.

    Your view of mutual funds is dead wrong and sounds like it came right from the TD Waterhouse marketing department. Sure mutual funds charge for professional management. But think of it this way: how much work would you have to do to beat the world's best money managers on a consistant basis? I'm not talking about taking half assed shots at the market. I'm talking about long term portfolio performance. One hour a week?Two? Ten? They spend 60 or more hours a week, work in teams and are fully wired in. And let's say you do beat them, how much do you think you could beat them by, consistantly, year in and year out? One percent, or maybe two? Then you have to ask yourself if it's worth it? You can pay the average fund manager a little over 1% to do it for you. How much is your time worth? And that's assuming a big if, if you can beat them. Most likely you can't. And that's not meant to insult you. It's just fact. Mutual funds aren't the only way to get the job done but for most investors in the under $500K bracket they are one of the most efficient. Dalbar studies have shown that the average U.S. equity fund has outperformed the returns received by the average american investor over all time periods studied. The reason: market timing. Seems the average investor stays in too long at the top, sells too late,and then doesn't recognize the turn at the bottem, repeating the mistake by buying back in late. This is compounded by the fact that the market doesn't move up in a consistant manner. Most years if you miss the best up days of the year you miss most of the performance. These days can be as few as 10. Really is tough to catch those days if you're not already in. Studies show that these investors would be better off buying and holding regardless off what the market is doing. And none of it matters if you don't take asset allocation into account.
    I'm just trying to be the person my dog thinks I am.

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    Quote Originally Posted by tom cotter
    Your view of mutual funds is dead wrong and sounds like it came right from the TD Waterhouse marketing department. Sure mutual funds charge for professional management. But think of it this way: how much work would you have to do to beat the world's best money managers on a consistant basis? I'm not talking about taking half assed shots at the market. I'm talking about long term portfolio performance. One hour a week?Two? Ten? They spend 60 or more hours a week, work in teams and are fully wired in. And let's say you do beat them, how much do you think you could beat them by, consistantly, year in and year out? One percent, or maybe two? Then you have to ask yourself if it's worth it? You can pay the average fund manager a little over 1% to do it for you. How much is your time worth? And that's assuming a big if, if you can beat them. Most likely you can't. And that's not meant to insult you. It's just fact. Mutual funds aren't the only way to get the job done but for most investors in the under $500K bracket they are one of the most efficient. Dalbar studies have shown that the average U.S. equity fund has outperformed the returns received by the average american investor over all time periods studied. The reason: market timing. Seems the average investor stays in too long at the top, sells too late,and then doesn't recognize the turn at the bottem, repeating the mistake by buying back in late. This is compounded by the fact that the market doesn't move up in a consistant manner. Most years if you miss the best up days of the year you miss most of the performance. These days can be as few as 10. Really is tough to catch those days if you're not already in. Studies show that these investors would be better off buying and holding regardless off what the market is doing. And none of it matters if you don't take asset allocation into account.
    In your opinion.

    In mine - I stay away - always have always will and I beat anything I will get in mutual funds.

    What you do not take into account is what I do for a living.

    You are entitled to your opinion - I disagree with it.

    Good luck to you.

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    Quote Originally Posted by toomanybikes
    In your opinion.

    In mine - I stay away - always have always will and I beat anything I will get in mutual funds.
    Long term maybe, but I doubt it. And even if you are, then at what risk? I'm not trying to insult you. No doubt you are very satisfied with what you are doing. Your original post shows you are either uneducated about mutual funds or grossly misinformed. Either way, how would you know?
    I'm just trying to be the person my dog thinks I am.

  15. #15
    rider of small bicycles geneman's Avatar
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    Quote Originally Posted by tom cotter
    Long term maybe, but I doubt it. And even if you are, then at what risk? I'm not trying to insult you. No doubt you are very satisfied with what you are doing. Your original post shows you are either uneducated about mutual funds or grossly misinformed. Either way, how would you know?

    Tom,

    I'm just playing devil's advocate, but I've been turned off by the mutual fund industry primarily because of poor performance relative to non-managed index funds. Explain to me how most managers earn their salaries yet are unable to outperform the S&P500 index. The one's that do manage to outperform the index are typically unable to do so for two years in a row.

    Mark

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    Quote Originally Posted by tom cotter
    Long term maybe, but I doubt it. And even if you are, then at what risk? I'm not trying to insult you. No doubt you are very satisfied with what you are doing. Your original post shows you are either uneducated about mutual funds or grossly misinformed. Either way, how would you know?

    Your postings indicate you are tied to the mutual fund industry - good for you.

    I can positively assure you I am not uneducated about mutual funds, nor am I uneducated about the investment business.

    I can also assure you I am in no way "grossly mis-informed".

    Having now typed this and lookingback on it I wonder why the hell I care what you think ..

    To your point - I accpet very low risk with my money, or with that I manage ( that's right - think about that ) , and over the last 25 years I underperformed the market for excatly three years measured on calendar year bases.

    You are entitled to your rosy view of the mutual fund industry, it would seem you derive your grocery money from it.

    I stay away from mutual funds personally and professionally - they are, in my opinion, the worst possible way to invest your money.

    I am sure you will disagree with me and have further insulting commentary - do me a favour - keep it.

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    Quote Originally Posted by geneman
    Tom,

    I'm just playing devil's advocate, but I've been turned off by the mutual fund industry primarily because of poor performance relative to non-managed index funds. Explain to me how most managers earn their salaries yet are unable to outperform the S&P500 index. The one's that do manage to outperform the index are typically unable to do so for two years in a row.

    Mark
    My view of this is this;

    Fund managers are paid for performance and their total compensation is tied to the performance of the fund against the market, etc.

    In order to qualify for larger bonuses they will make decisions or act in a manner which may be inconsistent with the stated goals of the fund, including the acceptance of risks that would not normally be in keeping with the goals of the fund.

    If those managers are able to return a yield which equals or even beats the market index ( an increasingly rare occurence) they are bonused well and attract the attention of not only others in their fund family, but managers in other fund families as well.

    They are then either transferred out to another fund or even leave the family to accpet work with another brokerage or fund. The return on the original fund then suffers as the transfer works its way through the system.

    I agree with you, on the rare occasion that a mutual fund equals or exceeds the return on non-managed funds, it is usually a short-lived experience, rarely lasting more than a year or two.

    Mutual funds may be fine investment vehicles for many people who have neither the time nor inclination to actively manage their own money. I am of the view, however, that an investment in a mutual fund is a purchase of a vehicle that is virtually guaranteed to underperform the market as a whole.

    The average investor can out perform the universe of mutual funds, as a whole, by either buying non-managed index funds or selectively picking high quality, low risk securities.

    Again, my opinion and a long way from the question originally asked - bike related companies as investment vehicles.

    The best of the lot is probably Giant, however, it is not as cheap as it was five years ago.

  18. #18
    rider of small bicycles geneman's Avatar
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    Quote Originally Posted by toomanybikes
    My view of this is this;

    Fund managers are paid for performance and their total compensation is tied to the performance of the fund against the market, etc.

    In order to qualify for larger bonuses they will make decisions or act in a manner which may be inconsistent with the stated goals of the fund, including the acceptance of risks that would not normally be in keeping with the goals of the fund.

    If those managers are able to return a yield which equals or even beats the market index ( an increasingly rare occurence) they are bonused well and attract the attention of not only others in their fund family, but managers in other fund families as well.

    They are then either transferred out to another fund or even leave the family to accpet work with another brokerage or fund. The return on the original fund then suffers as the transfer works its way through the system.

    I agree with you, on the rare occasion that a mutual fund equals or exceeds the return on non-managed funds, it is usually a short-lived experience, rarely lasting more than a year or two.

    Mutual funds may be fine investment vehicles for many people who have neither the time nor inclination to actively manage their own money. I am of the view, however, that an investment in a mutual fund is a purchase of a vehicle that is virtually guaranteed to underperform the market as a whole.

    The average investor can out perform the universe of mutual funds, as a whole, by either buying non-managed index funds or selectively picking high quality, low risk securities.

    Again, my opinion and a long way from the question originally asked - bike related companies as investment vehicles.

    The best of the lot is probably Giant, however, it is not as cheap as it was five years ago.

    Thanks. I think Tom's silence speak volumes.

    Mark

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    Honestly, I wasn't trying to insult you. But your comments about the MF industry are way off base. Very narrow view. Why is it that I can find a boat load of funds that have out performed their indexes long term and you can't find any?

    Even though you meant it as an insult, I do make my grocery money from the financial services industry. But not from mutual funds. In fact mutual funds have little room in what we do. That doesn't make them poor investments. I manage a lot of money,other peoples money. Been doing it a long time. In this biz people don't hand over the bucks unless you know what your doing.

    Most investors are focused on near term performance, when they should be focused on risk management and relative performance. The key is asset allocation, not what vehicle you're in to acheive that allocation.

    Out performing the markets for 22 out of 25 years earns you an A+ in my book, not that you care what I think. Hat's off to you!
    I'm just trying to be the person my dog thinks I am.

  20. #20
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    I'll take 100,000 shares of Jamis, please. Whadda ya mean that's $500,000?! OK, I'll just have a little old $2500 CD, then.
    --
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    Quote Originally Posted by geneman
    Tom,

    I'm just playing devil's advocate, but I've been turned off by the mutual fund industry primarily because of poor performance relative to non-managed index funds. Explain to me how most managers earn their salaries yet are unable to outperform the S&P500 index. The one's that do manage to outperform the index are typically unable to do so for two years in a row.

    Mark
    First, S&P 500 maybe the wrong benchmark to use. There are dozens of indexes that measure small market segments. Many do not correlate to the main index. Which is a good thing. Finding the right combo of non correlating asset classes is a key to asset management. More important than outperforming an index is peer group performance. How did your manager do compared with managers trying to do the same thing? Most important is how did the investment do relative to your goals? If you need your portfolio to pull 8% a year to meet your goal, did it? If not,why not?
    I'm sorry, I don't see poor performance relative to index funds. An index fund is a passive investment. While it may not be possible for a manager of a mutual fund to outperform their index year in and year out, even the mediocre ones can mitigate a loss. This was evidenced in the last bear market. In a down market an index fund assures that the investor will get the full ride down. There is noone to step in and slow the decent. That's a lot of risk to take. Even in up markets the best you'll do is what the market does minus the fund fee. Index funds,in my opinion, deliver to the investor a high risk ride for average returns. To overcome this flaw some investors try to time the market themselves. If you find one who can do it successfully have them call me. I'll give them my money to invest.
    Two years is not nearly enough time to adequately measure performance. 5 or 10 years is closer to the mark. It's also important to see who owns the performance. Is the manager who delivered the numbers still the person calling the shots? Then there's style drift.
    On the institutional side most managers get a two quarter pass. Underperform three quarters in a row it's time to dust off the resume. Mutual funds are a bit more forgiving, which keeps the managers from taking crazy shots just to save their jobs.

    That we have varying or opposing view points is OK. Afterall, that's what makes a market.
    I'm just trying to be the person my dog thinks I am.

  22. #22
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    Quote Originally Posted by tom cotter
    Honestly, I wasn't trying to insult you. But your comments about the MF industry are way off base. Very narrow view. Why is it that I can find a boat load of funds that have out performed their indexes long term and you can't find any?

    Out performing the markets for 22 out of 25 years earns you an A+ in my book, not that you care what I think. Hat's off to you!
    I've just finished business school, and one of the things we looked at was a long term analysis mutual fund performance. We didn't identify *any* funds that outperformed the indices in the long term. The greatest predicator of fund success was, in fact, low management fees.

    Looking at individual funds, there were some that performed well during extremely arbitrary time periods, but these would be followed by periods of underperformance. The conclusion from this was that past performance of a fund was absolutely no indicator for future performance.

    If I were to adopt a passive investment strategy, I would rather put my money into zero management fee index trackers than any sort of managed fund.

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    Quote Originally Posted by womble
    I've just finished business school, and one of the things we looked at was a long term analysis mutual fund performance. We didn't identify *any* funds that outperformed the indices in the long term. The greatest predicator of fund success was, in fact, low management fees.

    Looking at individual funds, there were some that performed well during extremely arbitrary time periods, but these would be followed by periods of underperformance. The conclusion from this was that past performance of a fund was absolutely no indicator for future performance.

    If I were to adopt a passive investment strategy, I would rather put my money into zero management fee index trackers than any sort of managed fund.

    If you find a zero fee index fund let me know. Most of the fund companies pushing these things like to get paid.

    I'm calling you on your study. Using just one fund, show me it didn't outperform the S&P500 long term. It's not a high flyer, in fact it's pretty boring. Certainly won't make you the darling of the cocktail party by talking about it. The fund is Washington Mutual. It's part of the American funds family. Symbol AWSHX. This is a load fund. I pick this fund because it's one of the most widely held in the country. Let's see that business degree in action. Show me how this fund has not outperformed the S&P 500 long term? For a time frame let's use the life of the fund. That's going back to 1952. That should be an arbitrary time period we can agree on.
    I'm just trying to be the person my dog thinks I am.

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    I must admit that this is the most interesting thread i have come across in a while, and having said that, half of it is greek to me (i'm no MBA). Please pardon my ignorance, but what is it, exactly, that makes bicycle companies bad investments? And how does a company like Cannondale go bankrupt? Just poor financial planning? It seems like the cycling industry/market in the US is huge, and I would have expected to see these companies doing well, not struggling.

    What about Trek? Is it not a public company? Perhaps the best time to invest in Trek would have been 7 years ago, as now they will have to find new ways to grow / market themselves, etc. There was an interesting article in the NY Times about this recently...

    http://www.nytimes.com/2005/07/26/sp...cial/26tv.html

    And here's a thought (although I'm not sure if its a good one, or a possibility)...what about investing in the Lance Armstrong Foundation? Then one could support both cycling and cancer research, and be socially responsible while doing so.

  25. #25
    Senior Member bwinton's Avatar
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    Quote Originally Posted by tom cotter
    If you find a zero fee index fund let me know. Most of the fund companies pushing these things like to get paid.
    Granted, I'm in Canada, but my local financial institution has several index funds available. Sure, I have to ask for them, and they often suggest managed funds, but as long as they're getting my money, they're usually pretty happy to do what I want.


    Quote Originally Posted by tom cotter
    Using just one fund, show me it didn't outperform the S&P500 long term. Symbol AWSHX. Show me how this fund has not outperformed the S&P 500 long term? For a time frame let's use the life of the fund. That's going back to 1952. That should be an arbitrary time period we can agree on.
    The problem with this is that you've picked a fund that's still here. How about picking a random fund that was available in 1952, and seeing how it did. Or averaging the performance from all the funds available in 1952. It's the classic "all death row inmates drank milk as children" fallacy, or, to bring it back to cycling, one of the reasons people think they're safe without helmets is because you hear a lot of stories from people who rode as kids without helmets and were just fine, but no stories from people who rode as kids without helmets and were killed. (Not to say that you are or aren't safe without a helmet, just that there's a bias in the reporting.)

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