I’m sitting in my home office immersed in my usual Thursday night routine. Kids asleep, Yvonne upstairs pecking away at her computer, Dachshund Jack Russell mix fast asleep at my feet. All is quiet in what my neighbors call the ‘terrace’ level, that which I call —- ‘a basement.’ Nonetheless, this is my refuge from the day, hot tea steaming from my overpriced Harley Davidson mug. Steve Heffernan, biker, carpenter, musician (in that order) recently finished my bikeresque home office, complete with built in cabinets, housing my favorite bikes, my most favorite being a black 1945 Harley Flathead. I qualify this bike as an example of one of my good hedges against stock market uncertainty. I don’t ride the thing and friends quip ‘what’s the point?’ My response is, “it’s not a bad investment.” Bad investments I’ve got. Markets are plummeting, life savings are washing away, retirement accounts vanishing and no one I know is immune. What’s that got to do with bikes you ask? It seems the vintage bike market, while a bit soft, has hung pretty tight and values are solid and in some instances, skyrocketing. This may be just the excuse you need to grab that old Indian Scout you’ve been eyeing on e-bay. What a great reason to buy another bike. Just have the spouse call me I’ll talk her into it. No commission required, thank you.
Of late, bike auction prices have soared, despite economic uncertainty. I recently watched Boozefighter Jack Lilly’s 1939 Big Tank Crocker V-Twin go for $300,000.00 at auction at the Barber museum in Alabama. My hands were glued to my thighs, I can assure you. A 1948 Indian 648 ‘Big Case’ racer just sold for $150,000.00 and many belt drive ‘pea-shooters’ and old board track Harleys routinely go for six figures. The most recent record I know of is the 1915 ‘Cyclone’ board track racer OHC, which just sold at the Monterey, California auction for a jaw dropping $520,000.00! Many of the bikes I see go for six figures were 5 or 10 thousand dollar bikes just five years ago. Does that mean the $1,500.00 basket case bought at today’s ABATE swap meet is tomorrow’s 50 grand jackpot? Maybe so! My kids’ college tuition may depend on it!
Despite the recession or perhaps because of it, those who can are investing in vintage iron. I am certainly not about to plunk a hundred thousand clams on a bike, but I think the same result can be had on a smaller scale. The half dozen basket cases I’ve got in milk crates surrounding me as I write this, are certain to yield more than my Harley stock, which by the way is down to a depressing 12 bucks a share from a 52 week high of $48.05!!! Ladies and gentleman, that is a 75 percent drop! I don’t think I’ve ever lost 75 percent buy-sell on a motorcycle in my life, and if I did, it was after a dozen years of blissful use. Of the restored and completed bikes surrounding me in this room, they are what I consider my alternate investment strategy. An odd collection of mostly 30’s through 50’s vintage American and European bikes. All appreciating a healthy 10 to 15 percent per year or more.
Despite having tried to do all the right things in my retirement and savings plan, I’ve still taken a whipping, like everyone else. My investments are heavy on risk spreading mutuals, a healthy dose of equities, an aggressive portion of real estate investments, and a familiar pile of common stocks and options. All this, and the old portfolio has still shrunk like a man unit in a cold shower. So, especially because of this, I take solace in my surroundings. A couple of HD Panheads, an Excelsior Henderson, a couple of AMF year Harleys (now very collectable) with a smattering of British (mostly Triumph) with one Norton that needs restoring thrown in. All these I bought over 20 years of yard sales, classifieds, fire sales, Abate swaps and barroom meetings. I dare say that not one of these bikes is worth less than double what I paid for it, some far more. This is not any kind of brilliant investment strategy, just a healthy love of bikes with a little patience and some luck thrown in.
The kids’ college savings plans are worth less than they were 5 years ago, despite pouring money into them. Does this make me sad? Yes, it does. Not because the kids’ college options are limited, but because unless the market turns around, I can see my little collection going up on the block right around senior year of high school. My 4 year old boy’s freshman year at MIT may cost me a Panhead, his second a Knucklehead, his third a Thruxton, and his fourth, perhaps my sole Norton. Graduate work is up for debate. With two kids and post graduate work expected in today’s competitive job markets, I could be down to just an old Shovel, when all is said and done. In the meantime, I’ll just continue to put some money into college funds, keeping my fingers crossed, while at the same time I do believe I’ll cut a deal with that old farmer with the Ariel Square Four that I hear he has locked up in his barn. “Buy promising stocks every week.” I believe they call that ‘dollar cost averaging.’ Who knows? “Buy four vintage bikes a year.” I call that spreading my risks in a market that I not only understand, but enjoy. As for you, if you get questions from the spouse, just have her give me a call.
Well, signing off for now. Ride strong, ride safe and in the end, make sure you ride home.