Saturday, December 3, 2016

The Gardiner Machine experiment

There's been buzz about competitive lap times set by SBK bikes and riders, vs MotoGP bikes and riders, at the Jerez test. That reminds me of the famous Gardiner Machine experiments, in which I used a time machine to transport bone-stock production bikes back in time. My goal was to determine the fastest production bikes' Gardiner Factor. That is, how far back in time would they have to go, before they were as fast as the fastest prototype racing machines? Current answer: 20-30 years. That's way, way better than anything you can say about the car world. Bikes rule.

Not long ago, the buzz among nerdy MotoGP and SBK fans was that, on a rare shared test day, at least one Superbike lapped faster than any of the attending premier-class bikes and riders. The nerdiest nerds then pointed out that it wasn’t really an apples-to-apples comparison, because the SBK teams’ Pirelli tires worked much better on the cold track that day. (Maybe it was more like an apples-to-quinces.)

But, it’s pretty clear: The mere fact we were all fascinated with the comparison pretty much proves that a.) MotoGP engineers aren’t getting that much marginal speed despite an exponentially larger spend; and, b.) the top SBK riders don’t give much away to their snottier peers in MotoGP.

Would a top Superbike rider on a top bike actually be competitive in a MotoGP race? I doubt it.

Whenever I think of radically different machines on track at the same time, I am reminded of the glory days of Formula USA, where anything-goes rules pitted bikes as different as 1,100cc superbikes against 250GP bikes (with nitrous oxide push-to-pass capability).

I don’t have to go back that far though. I’m traveling and away from my records. But if memory serves it was around the mid-‘90s when the top 250GP qualifying times were nearly competitive with 500GP times. That realization prompted Aprilia to build a radically overbore (was it also stroked?) 400cc version of their 250, which they entered in the 500 class. It went nowhere. The speed of the fastest 250s was also probably a factor in Honda’s decision to build some 500cc twins, which they offered as a customer motor to teams in the class. (It’s hard to imagine that, not so long ago, there were than many teams in the premier class, but there were.) Anyway, the Honda twin also underwhelmed.

The experience of 250GP riders in F-USA in the ‘80s, and twins riders mixing it with four-cylinder riders in the 500GP class in the ‘90s proved that bikes that are capable of putting in similar qualifying times on a clear track are not necessarily inherently competitive in the cut-and-thrust of racing, where the way your bike makes power dictates cornering lines. To say nothing of the braking advantage MotoGP bikes would have in a real race.

My guess—and that’s all it is, but it’s informed by historical knowledge of natural experiments in the world of racing—is that even the most dominant SBK rider/machine combination would finish quite far back (close to last) in any dry MotoGP race. That’s not to take anything away from the top riders over there; I am sure that if you gave any of the top six SBK riders a few test days and a competitive MotoGP machine, they could ‘pull a Bayliss’ and embarrass the prima donnas. I just don’t think they’d be able to use an SBK bike to full advantage in a MotoGP race.

All that said and as noted above, it’s clear that MotoGP bikes are not much faster than production-based bikes. That brings me to a mental experiment I love to imagine, which is not comparing production-based race bikes to the fastest premier-class racing prototypes; rather, it’s comparing actual production motorcycles to premier-class bikes.

So… Imagine a time machine, big enough to take a current production bike back in time. The question is, How far back do you think you’d have to take the fastest current production motorcycle, before it would be competitive in the top World Championship class?

About 15 years ago, I asked Freddie Spencer if he thought that he could have put a then-current CBR1000 on the grid in a 500GP race, during his racing heyday. He told me, “Not at the fastest tracks, like Hockenheim, because we were already going over 300kph. But I think it would have been competitive at the most technical tracks.”

At that time, Freddie was about 20 years past his 500GP prime. So, you’d have to set the Gardiner Machine at about 20 years to achieve machine parity.

Maybe some time this winter, I’ll parse the lap times at open-class sport-bike launches—to look for a launch with some fast ex-racer testers, held on a track that’s been in use in the World Championship for decades—and make an informed guess about the fastest current production motorcycles. How far back I’d have to take one in the Gardiner Machine, before it would be competitive with premier class bikes of that day. I’m not sure it would be more than 20 years.

And that’s incredible, really. I mean it’s just a mental experiment of course, but it clearly illustrates the fact that we’re living in a Golden Age of production bikes, especially when compared to production cars. Any guy with a regular job can go buy an open class sport bike that is as fast as the fastest prototype motorcycles were a few decades back.

The fastest production cars are an order of magnitude more expensive, and more like 40 or 50 years behind F-1 car lap times.

Thursday, November 24, 2016

Within U.S. only: Give signed, inscribed books for Christmas

Do you know a motorcycle rider who also reads*? Now is your chance to buy them an author-signed and inscribed book for Christmas! (*Or in the case of my trivia books, poops?) 

Here's the deal:

  • U.S. mailing addresses only! (I used to be able to send signed books around the world, but USPS international rates have gone up to the point that, now, it's prohibitively expensive. Sorry!)
  • You pay the cover price, I pay all shipping and handling. Books are shipped in padded envelopes, via USPS, for delivery at least a week before Christmas.
  • Paypal only! (You don't need a Paypal account, you can use any credit or debit card.)
Choose the book (or DVD) you want from this drop-down menu...
Want a specific inscription?

Feature length documentary film. Standard definition. DVD $24.95

Over 400 pages. $22 Sale $18

$20 Now in development as a feature film
with screenplay by Todd Komarnicki (Sully)
to be directed by Antoine Fuqua (Training Day)
Great illustrations from BMW's archives plus the inside story of the development of the famed R90S Superbike, straight from Udo Geitl. BMW's entire racing history, up to but not including the S1000RR. $34.95 Sale $17

Another 365 days-worth!
More bathroom reading for bikers. (And you know, #2 is even more satisfying than #1!) $12.95

A year's worth of reading on the john. The perfect gift for any biker who reads (or poops).
Amazon's #1 Bestseller in the 'Motorsports' category last Christmas! $12.95

Sunday, November 20, 2016

Psst... Wanna' buy some HOG PII?

Links to motorcycle stocks mentioned below

Harley Davidson (NYSE: HOG)

Victory, Indian (NYSE: PII)

Ducati (Volkswagen AG Frankfurt ETR: VOW3)
  • Volkswagen ADR OTCMKTS: VLKAY

BMW AG (Frankfurt ETR: BMW)

Honda (Tokyo: 7267)
  • Honda sponsored ADR (NYSE: HMC)

Suzuki (Tokyo: 6785)

Yamaha (Tokyo: 7272)

Kawasaki Heavy Industries (Tokyo: 7012)

As the year winds down, and people focus on happy moments like Thanksgiving, Christmas, and New Year’s Eve, you might want to spare a thought for something else on the horizon: tax time.

If, like me, you have a self-directed IRA, that might mean you’re about to convert saved cash into equities. And if you’re a motorcyclist, you may want to buy some motorcycle stock. The last year started off pretty poorly for the two big American motorcycle companies, Harley Davidson (NYSE: HOG) and Polaris Industries (NYSE: PII), the maker of Victory and Indian. However as of this writing Harley-Davidson’s shares have staged a pretty strong recovery.

A year ago, HOG was trading at around $48 per share. It’s now at well over $57, having returned over 18%--roughly double the return of the Dow Jones Industrial Average. Pretty impressive, especially considering The Motor Company's lackluster sales results. Even beleaguered Polaris has had a strong month or two, clawing its way back to around $85 from a low of $75.

Most of my self-directed IRA holdings are in accounts at TD Ameritrade, which offers an easy and intuitive trading platform. The downside is that it’s pretty much limited to equities trading on U.S. exchanges. That makes it difficult to invest in the other major motorcycle manufacturers—but not impossible.

Quite a few foreign motorcycle manufacturers’ shares are traded in the U.S. in the form of American Depository Receipts. That’s to say, shares in those companies are initially purchased on foreign exchanges, and then traded on U.S. exchanges or over-the-counter. 

There are two kinds of ADRs--sponsored and unsponsored. In a sponsored one, the company itself acts as the agent; it's a way for foreign companies to have easier access to the U.S. capital pool. If some other agent--e.g. and investment bank--just buys shares on a foreign exchange and then trades the receipts in the U.S., that's an unsponsored ADR. 

Some ADRs track the underlying company’s share prices almost perfectly, but others are not particularly liquid. If you prefer to invest directly, you can use Fidelity to trade on Japanese and European exchanges. There are pluses and minuses to each approach--you'll have to research tax implications and fees and decide what's best for you.

To invest in Ducati, you need to buy shares in Volkswagen (Ducati’s parent company.) Ducati represents a trivial percentage of VW’s business though, so your investment is really in a huge car company (and one which, by the way, has a cloud over its head at the moment.) Volkswagen trades on the Frankfurt exchange and is currently about in the middle of its range for the year.

Motorcycles represent a larger percentage of BMW’s business, but BMW still sells at least 10 cars for every bike. BMW also trades on the Frankfurt exchange and Xetra. BMW shares are well down from a high of over 100EUR a year ago, though prices have recovered somewhat in the third and fourth quarters (so far). BMW's ADRs each represent 1/3 of an underlying share.

Honda shares have lost 25% of their value in the last year, and the venerable company’s three-year chart’s not much better. But Ford Equity Research just put out a report rating HMC a ‘strong buy’. I believe Honda’s year end is in June, so if this report is solid, and Honda’s year looks good as of next summer, this might actually be a good time to buy.

Suzuki’s recent year has been forgettable, but pull back and look at the company’s five-year chart and you’ll see a reasonable return to form. Stock trades on the Tokyo exchange and with over-the-counter here in the U.S. as SZKMY; each receipt is for four of the underlying shares. I’m not crazy about the U.S. ADRs; I've been put off by large differences between bid and ask prices which makes me think there's a liquidity problem. But, that’s just me. 

I see Suzuki as one of the companies best positioned for increasing sales in the developing world—personally I’d just pay the higher fees to buy it in Tokyo, rather than here in the U.S. (By contrast, I have no problem owning Honda’s ADRs, which trade on the New York Stock Exchange.)

There are two different Yamaha companies: Yamaha Motor Corp. (Tokyo: 7272) and Yamaha Corp. (Tokyo 7951). It would be easy to buy the wrong one! Yamaha Motor Corp., like Suzuki, looks better when you take a longer view. ADRs trade over the counter as YAMHF. Not much of this trade in the U.S.--only a few hundred shares on a typical day. And, although it dropped below the general market's return earlier in 2016, it's done quite a bit better than the market as a whole so far this year.

Last but not least, Kawasaki Heavy Industries relies on motorcycles (and related products, such as quads and watercraft) for about one-fifth of its revenues. It’s number 7012 on the Tokyo Stock Exchange, and ADRs trade here as KWHIY. It’s been a crappy last two or three years for Kawasaki investors; you would have been far better off just buying a motorcycle in the spring of 2015, since the stock’s lost about half its value since then.

That said, some investors see the big K as a long-term strategic investment. You can buy it now at something close to it’s three-year minimum so if you really believe in the company, it’s not a crazy play.

As a motorcyclist, have you invested in any particular motorcycle companies? If so, which ones and why? Tell me in the comments!