Can you make 10% return per year on guns


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gym
September 22, 2009, 09:45 PM
Since there is really no bank paying interest over 2-3%, maybe 4 if you want to tie up your money for several years. I see many folks investing in Cars, Art work, Gold, "Homes ",etc. What about return on investmant on guns. . But there is little that is low risk these days. I got lucky and found a cash buyer who wanted my 20 yr old house. Aren't guns pretty much the same story. If you buy quality at a fair price and put them away, will you see a reasonable rate of appreciation over time or is that over with. What about 1911's of good quality. They seem to continue on a steady up trend, unlike tupperware. Also, Revolvers of the S&W quality level. It seems that they have re issued many of their old designs again. Is this a trend with quality metal American made firearms? Will the demand be there over time for the $2-$5000 handgun, or is that too much guesswork to invest in? Most old school guys say there is no money in guns anymore. But there shure seem to be a lot of people who can't get what they want, so there is a demand.

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Noveldoc
September 22, 2009, 10:06 PM
Cleaning up and refurbishing a Star PD I got for $300. Haven't finished the bluing touchup on the slide yet and already got an offer for $425.

You can get a .45 Smith 645 police turn in for about $400 and they are built like tanks so tend to be in good shape with not much shooting but lots of carrying. You clean up the holster rash on the slide, buff it shiny, slap on some pretty but cheap new grips and you got a $500 gun. Saw one with this treament go at auction for $540.

People tend to value guns based on external appearance. Work on some rebluing and polishing skills and you can add a lot of value. And replacing items like mag retainers or recoil springs for good function is very inexpensive. Lots of folks want a used gun refinished nicely with maybe some basic spring replacement.

With a little work and a small investment, you are looking at 25 to 35% appreciation. I note the prices of the Stars and especially the Smith 45's are creeping up month by month so plan to shoot 'em for fun, keep them clean and probably sell when price is up 75% over my costs.

Tom

BlindJustice
September 22, 2009, 10:18 PM
I doubt a 10% return, but if you shop careful for
older Smiths, or 1911s with little wear, you won't lose
and could have some increase on the market value.

FYI - 15% return per year for 5 straight years and the
durable good, or metal, or investment portfolio with the
profits staying in the investiment portfolio and it will
double in value.. So, a long term view, is 7 1/2% vaverage
over 10 years and it would double as well, and it's a more
realistic average.


I bought a S&W Model 18 K-22 Combat Masterpiece in
1965 for $78 - Used ones today are in the $450 or more
depends on condition. do the math over almost 45 years.

I recall in 1970 a new Series 70 Colt was about $112 and
the Sig 210 was $200. Would have been nice to pick up 6 of
each, Two for shooters and the rest in a vault.

Yah gotta have good taste, and run into deals

Randall

franconialocal
September 22, 2009, 10:27 PM
A friend of mine is very big into trading on the stock market in just about anything (metals, energy, military contractors, etc.) and has done pretty well by it. Good news is he's also a firearm buff so he's "up to speed" on this topic.

He claims a very solid %5.00 per year over the last 10-15 years (overall/ industry wide/ NOT associated with any one mfg. or co.) on firearms.

I'm not a big money man so I don't really know what this equates to in terms of pure profit potential but check out some of the new Smith and Wesson prices on the revolvers....CRAZY!!!

sidheshooter
September 23, 2009, 01:00 AM
Like most things, I'd say go with the high-end "name" collectibles, and they'll go up. Probably won't go down, even with the run of the mill stuff, however; I find it hard to believe that old rossi .44 specials are selling for over 300 bucks in my area, to name one recent example.

i don't know about 10 percent annual return, though... for that, I'd try boxes of .380acp ammo...

tribbles
September 23, 2009, 01:12 AM
The only thing is that in order to make the profit, you have to sell the guns, which is tantamount to sacrilege.

Noveldoc
September 23, 2009, 02:36 AM
LOL. Like selling your babies. ;-)

I made a major profit on my AMT long slide .45 but sure wish I had kept it. <sniff>

Tom

JohnKSa
September 23, 2009, 02:41 AM
There's also the legal issue that buying and selling guns as a way to make a profit (as opposed to as a hobby that happens to net you a bit of cash now and then) is likely to eventually get you a visit from the BATF.

moe1942
September 23, 2009, 11:04 AM
Thanks John. I was hoping someone else would point that out. I always want to be invisible to the IRS and BATF.

Mr. Bojangles
September 23, 2009, 11:11 AM
Like buying houses, cars, or stocks, one has to be careful which firearms are invested in. Some could have a 10% annual return potential, but others... Also consider due to the recent drastic increases in price of many firearms since last November, the prices may not increase much in the next year or so. If I could have seen the future, I would have dumped all my money into guns about two years ago and would now reap the rewards. Right now, it seems like a person is "buying high."
On the other hand, if you are looking for an excuse to buy a new firearm, go for it! :evil:

DRYHUMOR
September 23, 2009, 03:44 PM
Guns are kind of hit and miss, cyclic. If you think about the dollar's value, it comes into plat as well.

Gold has increased approx 61% since the low of 2006, if guns did that I'd have more of them!

Coronach
September 23, 2009, 04:07 PM
One thing you should watch is that if you're buying and selling guns with an intent of making a profit, you're starting to flirt with a scenario in which you should have an FFL.

Mike

AirPower
September 23, 2009, 04:54 PM
Yeah, if you look at it like a business, then you need FFL to "deal" in guns. In general as with anything, be that house, stock, gold or guns, if you can buy something when it's cheap, then you can probably keep or gain value on it. If you buy it while it's high, then you probably won't make any money on it.

If you have money to invest, there are many more "safer" things to invest in, but none as fun as guns. :) enjoy guns for what they are, and justify by thinking that at least they are highly durable and generally don't loose value.

Noveldoc
September 23, 2009, 08:32 PM
Fun is sure a part of the equation. I think if you buy used guns, you can shoot them. Otherwise, don't take a chance on that initial depreciation going from new to used. But a big part of my restoring thing is you can make a profit but the process itself is fun. And I would tweak out the gun anyway.

Another thought is I made the most profit from sort of oddball guns. Made minimal on a 45 Colt Commander and Colt Python .357. Made a wad on AMT long slide 45 and a Desert Eagle .357 with lightweight paratrooper frame. Of course, I still miss both of my babies there. <sniff, sniff>

Tom

Publius1688
September 24, 2009, 12:33 AM
Simply put, no.
However, with careful research and purchasing, I think 4 to 5 per cent per annum could be sustainable, over a three to five year time period.
However, I don't think guns could carry that over a ten year span, at some point, you'd see a point of diminishing returns.

DRYHUMOR
September 24, 2009, 05:37 AM
I've seen an awful lot of good stuff hit the market in the last few months. Not so many that are worth trying to buy for investment, but a lot that are just real good deals.

hogshead
September 24, 2009, 07:55 AM
Sks two years ago $150 today $300 50% per year by the hillbilly math. You got to know what to buy then be prepared to hold till the right time. Sks, ar15, ak, riot shotguns are coming back down but rest assured that with the first mention of gun legislation they will go through the roof again. Same for 7.69 ,223, 45 ammo Though I am at loss for 380 ammo think that one caught all of us unaware.

JohnBT
September 24, 2009, 09:38 AM
I rolled over one of my parents' CDs on Monday. I'll take 3.21% on a 59-month CD over trying to figure out how to make the same investment in guns. I don't think I even want to try to clean and store $170,000 worth of guns. Jeez, and think about the transfer fees and insurance premiums.

I wouldn't even be finished messing with the first batch when the next 2 CDs come due on October 9th.

No thanks, too much work.

My folks are 88 and 85, so don't suggest stocks and bonds and stuff. He got out in time. :) My dad said CDs and CDs is what he gets.

John

Mad Magyar
September 24, 2009, 10:14 AM
Never gave much thought to it, but the "triple-locks" and the S&W 547 can make you smile. For many years, I would sell off a firearm just to get what I paid for it...Profit was enjoying it for whatever how long...:)

DRYHUMOR
September 24, 2009, 10:41 AM
+1 what Mad Magyar said

KBintheSLC
September 24, 2009, 01:14 PM
Will the demand be there over time for the $2-$5000 handgun, or is that too much guesswork to invest in?

Guns are just the same as any other investment... the market fluctuates. Your ROI will vary depending on when you bought in/sold out. Don't think that because guns skyrocketed this year in value that they will do that year after year for the rest of your life. Remember what oil did in spring of 2008? Oil was artificially bloated (like guns are now), then tanked from $150/barrel to like 1/3 that value.

Down the road when demand slows for guns/ammo, imagine the inventories that will be built up from the current production overdrive. Perhaps if you go in "short" on gun corp stocks as the market peaks, you might make a killing when it tanks. Besides that, I think in the near-term, the gun investment ship has already sailed.

Guns might be a decent long-term investment... perhaps when they become collectors items. However, short-term market variance makes them just as volatile as anything else.

waterhouse
September 24, 2009, 01:39 PM
If you get an FFL and plan on making a business out of it, you can buy your guns at dealer cost. Then you can sell them for about 10% (sometimes a little less, sometimes a little more) more than you paid for them.

Short of that, you'd have to be pretty good at figuring out which guns were going to increase in value over the years and which ones would stay the same or come down. If the values stay the same and you shoot it a lot, at least you got to shoot it. If the value drops or it stays the same and you don't shoot it you are just tying up funds that could be earning money elsewhere.

rondog
September 24, 2009, 02:32 PM
You've got it all wrong....you're supposed to invest in other areas, so you can make more money, to buy MORE GUNS!

iiranger
September 24, 2009, 06:08 PM
My favorite money man is Roland Manarin, Omaha, NE. [manarin.com and manarin on money.com]. Some call him "Buffet Jr." He was a small child in WW II Europe where/when armies were killing people, breaking things, not to mention militias... Got a real "hands on" look at economics from the bottom up.

The category you mention is called "hard assets." Gold? Coal? Copper? Lead? Guns? Cars? Good wine? You are betting on your judgment.

As suggested, if you get an FFL and "deal guns" buying wholesale and selling near retail... Most small businesses don't survive without about a 33% return. Now if you can deal from home [the basement bandit]... cuts costs... 10% might not be too unreasonable.

Mr. M likes a balance. Common stock [OWNERSHIP] for the return. Some gold to protect against inflation. And some, a few, treasuries to protect against deflation. (yeh, like that is likely until the big DUMP...)

Obviously you have to finance the operation. Overhead. Insurance. Lights. Heat. Security! Then you get to look at some guns. No end of stories about the "exceptions." Colt couldn't give away "P" peacemakers so they quit making them right after WW II. NOW everyone wanted one. Original Colts got "bid up" to sky high levels. Mr. Ruger came out with a decent product to meet the demand. THEN Colt decided to "get back in" and the original Colts "dropped like a rock." You want the gamble? Diversify!

The rest is courtesy of the government, called inflation. Uncle Sam has tried to take the bottom out of the business cycle. Only go "up." Been done many times thru history (doesn't work forever). Economics history. Dull but enlightening if you care about "your money." I think it was the Romans who punched holes into the center of a silver coin to get more silver to make more coins which were all valued at the value of the silver in the coin before the whole was punched... Government!

Point? Look at the Florida Land boom. (Marx bros "Going Coconuts" movie). Or the Tulip boom in Holland. Or the Chicago land boom. It all "busts" eventually, so don't forget to take plenty of profits off the table to live on when the "bust" comes. Many, reportedly, "lived well" during the depression off the dividends of gold mine stock like Homestake.

I thought along these lines and still have a can of 4227 (empty) with a sticker says $1.95 on it. Now if it was full. Current price? First Mauser I bought was $35.00. In .30/'06 no less. Value today? Before my time although I know men who remember it (darn stories)... Uncle Sam would drop an '03 on your porch REA (Railway Express Assoc?) for $18.00 and /'06 surplus ammo at $0.01 per round with the gun. Those deals are gone. Today? You have to search. Enjoy. Luck.

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