Diversifying Investments - Surplus Ammo?


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Bob01
April 23, 2012, 09:18 PM
Greetings All,

I was thinking about diversifying my investments today. One thought came into my head - I should've bought 7.62x25 ammo when it was around....now even after the craze - its still about 3x what it costed 18 months ago.

Proceeding to the next step - surplus 5.45x39 and 7.62x54r ammo is still plentiful and affordable. What would be your opinions on buying spam cans of the stuff and putting it in a closet somewhere? Eventually I think I' may get an AK74 and Mosin - but for now I don't have either...


As for the cons of collecting these ammo types, I see:
For the 5.45x39:
Really only the AK74 uses this ammo and some Ar uppers...not quite the same numbers as Tokarevs and PPSHs?
Current Production ammo is only 30% more than the surplus (Looking at Wolf)

7.62x54r:
Mosins and Veprs only for the most part?
Most folks just like shooting 10-12 before calling it a day?



Thanks!

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BerettaBob
April 23, 2012, 09:35 PM
If I were you I'd buy up as much 7.62x54r that I could. And a mosin. :)

medalguy
April 23, 2012, 10:21 PM
I just bought a ton of 7.62 x 54 light ball. I think it's a very good investment, not for resale, but for my own use. I have a few years under my belt (and a few sandwiches) but I can recall .30-06 ammo for 4 cents a round, and .303 British for about the same, and .50 BMG for .15 a round, but that was a few years ago. I wish I had bought a whole bunch more of all of those back them.

Buy and hold for resale later? Maybe, but you have to store it somewhere that will keep it dry and safe, and that will probably cost something as well.

il_10
April 24, 2012, 12:26 AM
It's 30% higher than surplus likely in part because it has surplus to compete with.
Wolf .30-06 is between CMP and Iranian surplus in price, the spread is 4 cents, .49-.53 per round, which is considerably more than a 30% increase than what it was when there were large stores of surplus around. It's not a terrible investment, but not a great one when compared to some others. I'd put ammo on the same playing field as guns themselves, even gold or silver: a GREAT hedge against inflation and economic collapse, but not great compared to high yield investments that appreciate faster than inflation. If the economy collapses, those will be gone; if it doesn't, they'd have made you more money than guns, ammo, gold, or silver.

The thing about surplus is that you have that 30% gap that is due to scarcity rather than inflation. The ammo will bump up that 30, then it will all go up a bit more due to lack of surplus, and then it'll level off and adjust only to inflation. What the difference between the 30% gap now and the endgame will be is tough to say, but it's a 30% gimme at least. Holding off inflation ain't bad, and an extra free 30% is gravy.

Wildbillz
April 24, 2012, 02:45 AM
If you time it right and stack the right stuff. It could pay off big time. On the down side, it takes a lot of room to store much of it. Your allways at the mercy of the market if all of a sudden there is a flood of that caliber that hits your screwed for a while.

If it were me, I would go with calibers that you shoot all ready. Surpluss comes in and go's. Some of it once its gone its gone for good. Get it while you can and plan accordingly.

WB

kozak6
April 24, 2012, 07:30 AM
It's just like any other antique or collectible you have store and keep cool and dry.

Commercial and milsurp 5.45 are close enough in price that it probably isn't worthwhile.

Milsurp 7.62x54R is significantly cheaper than the commercial stuff, but it might remain available long enough that storing it would be a waste of space. It's hard to say.

Also, another factor to keep in mind is Reelection Panic. You might be able to turn a few bucks if you stock up on common calibers and primers now so you can profiteer later.

browningguy
April 24, 2012, 09:01 AM
Ammunition is not an investment.

303tom
April 24, 2012, 09:44 AM
Ammunition is not an investment.
Investment in my life, if push comes to shove....................

Buck Kramer
April 24, 2012, 09:53 AM
Quote:
Originally Posted by browningguy
Ammunition is not an investment.
Investment in my life, if push comes to shove....................

I agree here, I'm not looking to make a buck, but having several crates of ammo helps me sleep a little better.

FuzzyBunny
April 24, 2012, 10:27 AM
Originally Posted by browningguy
Ammunition is not an investment.

Wish I had bought a few pallets of 7.62x39 when it was going for $45 per 1,000 for big orders like that.

I remember going with my dad to the flea market in the 60s as a kid and seeing piles of surplus M1 carbines for $10 or $15 if the wood was perfect. But that would have been 15 silver dollars or $450 in todays market.

BSA1
April 24, 2012, 02:59 PM
I would rather buy calibers I use now instead of calibers I might use someday.

Telekinesis
April 24, 2012, 03:11 PM
Investment in my life, if push comes to shove....
I agree here, I'm not looking to make a buck, but having several crates of ammo helps me sleep a little better.

I would agree with you if you plan on using the ammo for defense, but that's not what we're really talking about here. The OP doesn't even have a gun that fires these calibers. He's just asking about investment in the same way you'd invest in stocks and bonds.

He is essentially saying "if I just sit on this ammo, will it be a worthwhile investment when compared to other options" and that answer is generally no.

Murphy4570
April 24, 2012, 05:15 PM
Only buy ammo for guns you already own.

Having 2-4 spam cans of 7.62x54R for a Mosin is a goodly amount. Would take a long while to shoot all that off.

browningguy
April 24, 2012, 06:03 PM
Investment in my life, if push comes to shove....................

Having thousands of rounds of ammo for a gun you don't own is no way an investment in your life. Kind of like my wife talking about "investing" in fine china and crystal, or "investing" in new curtains. It's just another way to spend money.

I probably have more ammo than most stored, about 8,000 rounds of .223, 9mm and .40 (and lesser amounts of .32ACP,.380 and various hunting ammo), not to mention a few thousand rounds of .22lr. But I don't ty to convince myself it's any kind of investment, I'm giving up potential investment profits to save money on inflation. If you are going to invest I suggest looking at Chevron, Microsoft, Intel, GE or similar companies. They all pay a decent dividend and I am up a substantial amount on them over the past couple of years.

ny32182
April 24, 2012, 06:26 PM
I would say ammo is potentially a much better "investment" than guns, but it fails for a couple reasons:

1) You have to speculate on what surplus caliber is going to spike in value in the next few years... hindsight is 20/20, but foresight is not. I'd consider this more difficult and much higher risk than picking any of many market investments that let you spread your risk in an infinite variety of ways.

2) Physical space to store ("investment" level quantities) hundreds or thousands of crates of ammo... personally I don't have it. Maybe if you have an unused secure warehouse somewhere, it is less a problem.

Buck Kramer
April 24, 2012, 06:59 PM
Having thousands of rounds of ammo for a gun you don't own is no way an investment in your life. Kind of like my wife talking about "investing" in fine china and crystal, or "investing" in new curtains. It's just another way to spend money.


Didnt see that he didn't even have guns to shoot that caliber, in that case, no.

Hacker15E
April 24, 2012, 07:46 PM
I remember going with my dad to the flea market in the 60s as a kid and seeing piles of surplus M1 carbines for $10 or $15 if the wood was perfect. But that would have been 15 silver dollars or $450 in todays market.

And if you'd invested that same money in the market smartly over that same time, I bet you'd have been able to do a lot more than what you'd have earned on stored Carbines over the last 50 years.

TennJed
April 25, 2012, 12:02 AM
I remember going with my dad to the flea market in the 60s as a kid and seeing piles of surplus M1 carbines for $10 or $15 if the wood was perfect. But that would have been 15 silver dollars or $450 in todays market.

The average stock mutual fund would have turned that $15 investment into $830 over that 50 year period.

Guns/ammo are NOT good investments from a monetary standpoint, but as a hobby it does pretty well compared to other hobbies. As much $ as I have put into this hobby, I could recoup a fair amount back if I needed to.

But no one should be fooled into thinking they are good "investment"

CZguy
April 25, 2012, 12:44 AM
But no one should be fooled into thinking they are good "investment"

:what: My wife reads this forum sometimes......decades of careful training could potentially be lost in a matter of seconds. :p

leadcounsel
April 25, 2012, 01:31 AM
Dunno - a $100 SKS from 2005 is worth 3 times that.

7.62x25 ammo has tripled in value since about 2010.

303tom
April 25, 2012, 10:50 AM
The average stock mutual fund would have turned that $15 investment into $830 over that 50 year period.

Guns/ammo are NOT good investments from a monetary standpoint, but as a hobby it does pretty well compared to other hobbies. As much $ as I have put into this hobby, I could recoup a fair amount back if I needed to.

But no one should be fooled into thinking they are good "investment"
I have firearms that are worth 1,000`s that I paid $20.00 for 35 years ago, ain`t no bank going to do that..........

Sav .250
April 25, 2012, 10:54 AM
" in a closet..." your insurance company is going to love that one.

Gordon
April 25, 2012, 11:04 AM
Then there is the value to be considered in a "dooms day" scenario.I'll be bartering off most of the non "assault rifle" core of my collection as things ramp up. Things like a pile of canned goods for a 16 ga. winchester 97 and a few boxes of shells, ect.

tech30528
April 25, 2012, 01:48 PM
I do a little "investing" in ammo. Obviously buying bulk is cheaper per round, many sellers will pay shipping if the order is big enough, etc. I've made a pretty reasonable short term percentage on ammo, sometimes as high as 30% on big orders like 9mm. Haven't really considered it for long term, but what I will typically do when I'm placing an order is try to recover my costs so I shoot for free.

Kind of like this:

I order 4500 rounds of 22LR. They come 325 in a box, with each order of 1500 you get a "free" dry box. The vendor sells the dry boxes for $15 individually. 1500 rounds and a dry box costs $95. Orders over $100 get free shipping.

I don't need any more dry boxes. A friend of mine has an outfitter store and sells the boxes for me for $10 each. My cost on a 325 round box of ammo is $21.25. I sell 10 of the 12 boxes for $26 each, which is a bit less than what it goes for in local stores. I make my money back (plus about $5) and end up with 650 rounds for nothing. Pretty easy to do if you know people who do Appleseed shoots. We have a practice shoot the weekend before and an Appleseed the first Sunday of each month.

Works pretty well with shotgun shells, too.

CZguy
April 25, 2012, 02:28 PM
As with any portfolio..........diversify, buy toilet paper. :D

Hacker15E
April 25, 2012, 05:28 PM
Dunno - a $100 SKS from 2005 is worth 3 times that.

Anyone can pick out an example of an outlier -- I can probably find a specific stock, or commodity, etc, that performed phenomenally over a specific period.

Hell, I can probably find examples of guns/ammo in the run-up during 2008 that had even greater inflation in value than that.

Unfortunately, all of those examples are just not indicative of the vast majority of firearms, ammunition, and accessory values over time.

I like how much money I've made on AAPL stock in the last two years, too...but that's also not typical of nearly any other stock for sale for any other company.

It's a fun idea -- I get it. I wish it were true. If folks feel like they're going to make a buck or two or buying guns and ammo, then go for it. It may work out for you, who knows.

Unfortunately, the economic reality just doesn't bear itself out as being a serious competitor or improvement to the various other conventional economic investment possibilities.

moonman16
April 25, 2012, 06:37 PM
Gold, Silver, Ammo, Good Liquor.

Hotshot10
April 25, 2012, 06:45 PM
My wife reads this forum sometimes......decades of careful training could potentially be lost in a matter of seconds.

Hahaha. Nice.

TennJed
April 25, 2012, 11:35 PM
I have firearms that are worth 1,000`s that I paid $20.00 for 35 years ago, ain`t no bank going to do that..........
No bank will do that but the only reason to invest with banks is a guarantee......ain't no gun going to give you FDIC coverage..so camparing guns to BANKS is a poor comparision. Banks never give a good return....but there are plenty mutual funds that would have done much better than your $1000 guns......the AVERAGE fund was what I was referencing. The AVERAGE gun would not do as well as yours, BUT your guns have done well by gun standards but not nearly as good as a lot of investments would have.

I am sorry, and I love guns, but no way you slice it are guns smart financial investment, when talking about rate of returns

wasr10634unme
April 26, 2012, 01:01 AM
oops

wasr10634unme
April 26, 2012, 01:03 AM
Ammunition is not an investment.
yeah its a retirement plan!

303tom
April 26, 2012, 12:36 PM
No bank will do that but the only reason to invest with banks is a guarantee......ain't no gun going to give you FDIC coverage..so camparing guns to BANKS is a poor comparision. Banks never give a good return....but there are plenty mutual funds that would have done much better than your $1000 guns......the AVERAGE fund was what I was referencing. The AVERAGE gun would not do as well as yours, BUT your guns have done well by gun standards but not nearly as good as a lot of investments would have.

I am sorry, and I love guns, but no way you slice it are guns smart financial investment, when talking about rate of returns
I look at it like this, when push comes to shove & the you know what hits the fan & money is not worth a you know what, what is a better investment. Your BANK or my GUNS ??????

Gordon_Freeman
April 26, 2012, 04:41 PM
I think it is smart to stock up on ammo now because it has such a long shelf life. You can look at the price tags and be thankful years down the road. I put price labels and dates on all mine. I don't think it is a good idea to buy it just to sell it later for profit. You might make some money, but Roth IRA's and mutual funds are a much better option.

Hacker15E
May 1, 2012, 08:58 AM
I think it is smart to stock up on ammo now because it has such a long shelf life. You can look at the price tags and be thankful years down the road.

This is very smart.

So far as most of us are concerned, ammo has a "lifetime" shelf life, but prices will continue to go up no matter what.

P5 Guy
May 1, 2012, 09:56 PM
How much was this way back then?
What would one pay for this today?

Sheepdog1968
May 2, 2012, 03:20 AM
Nothing wrong with stocking up some on ammo for firearms you own. Personally, I think maxing out the 401k over the long haul is still the best way to go.

mr.trooper
May 2, 2012, 10:53 AM
A Mosin is a decent investment in terms of percentages, but in terms of actual DOLLARS you be be returned (years down the road) they probably wont do much for you. You would have to be holding on to a few cases if you wanted to make it worth your while years down the road.

Forget about Class III stuff. At this point the prices are already high, and they are also relatively stable. It will take you a long a time to realize an acceptable percentage of growth.

In short, in my humble opinion, guns are not good investments from a money standpoint. Fun to shoot them though.

SquareBeer
May 2, 2012, 11:05 PM
Ammunition is not an investment.

I'm not sure where they were going with ammo being an investment. It is wise to have a nice reserve of ammo for the guns you hold or if you want to work ahead of sked and get ready. PFM doesn't work to brink you ammo at your need!

B!ngo
May 3, 2012, 03:12 AM
Ammunition is not an investment.
Ditto. If you are investing for financial returns I'd pass. Or at best go direct and invest in the manufacturers and others in the food chain in the ammo business. Not my cup of tea, but you may think otherwise.
If you purchasing to use later, taking advantage of a perceived local minima in pricing then that's your call. But that's not investing. Just smart buying.

valnar
May 3, 2012, 09:32 AM
Ammo may not be a good investment for a "cash in at retirement" scenario, but in general arms have always been a cornerstone of barter or trade when times get tough. In some scenarios, it could be worth more than gold.

4v50 Gary
May 3, 2012, 09:37 AM
Ammo isn't an investment. It's great for SHTF and bartering that will emerge afterwards. Heck, in times of collapse cigarettes, soap, food and booze become prized items for barter.

Fishslayer
May 3, 2012, 11:08 PM
Depends on the ammo. I wish I'd bought a pallet of the brass Yugo x39 when it was $100/crate. It's pretty much gone now. Same with the steel free Yugo 8mm Mauser milsurp. It was dirt cheap last year.

Right now x54R milsurp is around $90/spam can shipped. Mosins are red hot sellers right now & that ammo will eventually dry up.

valnar
May 4, 2012, 07:18 AM
Hindsight is 20/20. I went to a gun show in March and bought a Swiss K31, in great condition, for $350. The guy who sold it to me bought several when they first came out years ago for $90 a piece. I'm guessing this is a 5 year span.

My Dan Wesson PM7-S (1911) was $550 when I bought it in 2003. They go for over $1000 now, although I am never going to sell it.

Depending on your crystal ball you can do quite well.

Plan2Live
May 4, 2012, 08:17 AM
Looking at this strictly from a financial perspective, interest rates are at the lowest point seen in my lifetime. As a result money in the bank is not even keeping up with inflation. Speaking of inflation, our esteemed Treasury continues to print money, that alone will encourage inflation. Inflation means today's dollars will buy fewer things in the future. Metal prices are on the rise, fuel prices are very high and likely to go higher. Throw in the very high likelihood that we will not have a leadership change in November which means we are highly likely to see a "bullet tax", Executive Order or EPA regulations that will negatively impact gun/ammunition tolerance. Add all that together and the logical answer is if you like to shoot and have the cash now then start stocking up.

Even in a worse case scenario of prices remaining stable or even backing up a tad you are less likely to loose money on firearms and ammunition than I am likely to loose money in my well diversified 401(k).

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