The concept of Sunk Costs and Ammo

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I look at ammo investments as sunk costs as well. Here's the thing: I bought it to shoot it. If I don't shoot it, it's most likely going to sit in my closet until I shoot it or buy a gun to shoot it or give it to a friend to shoot. Im not going to flip it.

What i have found when it comes to "stocking up" on ammo, is that i need to be honest with myself. I have no need or use for thousands of dollars of ammo. Shooting is a lesser hobby of mine. I think that ammo procurement, or the idea of what is "enough", is a slippery slope/gateway to "yeah, but what if?...". Yeah but what if "they" ban it/there is a shortage/I have to shoot at a mob of 200 zombies because of my perception of things going to hell in a hand basket?

My personal honest "need"....a couple boxes to get me through a visit to the range and a spare box for social use. I have no need, time, resources, or frankly desire to stock up beyond what I am going to use for fun.

I dont live the gun life, and I am a fair weather shooter. The sunk cost of a lot of ammo is a very real thing to me. I stilll have 3 or 4 types of ammo kicking around with nothing to feed it to anymore. Not enough to sell and not enough to invest in another gun. Orphan expenses.

same here i bought it to shoot it and not to earn money on it flip it or trade it though you could.

i will start applying my new reasoning to my 223/5.56 stash. i will leave my unopened can of 480 rds but will start enjoying my roughly 1500 rds left over. rather than sitting on it and not shooting it. otherwise i am behaving as if I've already run out of the bullets.
 
So you have a box of 22mag that is worth what? Like 10 buck off the shelf? And are thinking of spending like $150ish on a barrel to fire it?

Give the box of 22mag to someone that needs it and know you did a good deed. Use the $150 you would have spent on the barrel to buy more of the 22lr that you still shoot.

Problem solved.

I one time bought 2 Sig Saurer mags at a gun show. Zipper back and in supper condition. The guy didn't know what he had and sold them to me for $25. I had seen police turn in P226's for sale at one of the online sellers for $275 so it made sense. I got the gun and found out the mags were for a P228. So I looked around and found a police turn in P228 and bought it. I also looked around and found a few mags for the 226 I had bought. In the long run I don't shoot either of them all that much and I don't even want to think how much I sunk into those first Cheap Sig mags. But at the moment that line of thinking made sense to me. It was sort of like I had to find a way to make the deal work and cost be dammed.

Now I have aged a bit and try to think things out a bit more clearly. At least I try to.

WB
 
So you have a box of 22mag that is worth what? Like 10 buck off the shelf? And are thinking of spending like $150ish on a barrel to fire it?

Give the box of 22mag to someone that needs it and know you did a good deed. Use the $150 you would have spent on the barrel to buy more of the 22lr that you still shoot.

Problem solved.

I one time bought 2 Sig Saurer mags at a gun show. Zipper back and in supper condition. The guy didn't know what he had and sold them to me for $25. I had seen police turn in P226's for sale at one of the online sellers for $275 so it made sense. I got the gun and found out the mags were for a P228. So I looked around and found a police turn in P228 and bought it. I also looked around and found a few mags for the 226 I had bought. In the long run I don't shoot either of them all that much and I don't even want to think how much I sunk into those first Cheap Sig mags. But at the moment that line of thinking made sense to me. It was sort of like I had to find a way to make the deal work and cost be dammed.

Now I have aged a bit and try to think things out a bit more clearly. At least I try to.

WB

see my ff up reply regarding the barrel
 
I think the best example of sunk costs is that boatload of firearms that many of us have lost in those random lakes and rivers.

Or the boatload of guns people accumulate, never or hardly ever use, and refuse to sell for some inexplicable reason.....but I see what you did there. :rofl:

Like I alluded to in my previous post, gun hobby and economic principles will never agree and its a long, complicated, and sometimes depressing rabbit hole.
 
Collectable guns can be an investment, but their value degrades with additional shooting.

I've eight various SKS models, that I've only shot once to verify they worked, sitting in a nice display case. They were cheap and I'd heard the "I wish I'd bought a truck load of surplus ..." stories as a teenager. So I figured, not tying up a ton of money here, why not get some interesting variations. Last I checked purchase prices, inflation and current selling prices they've done ~3% better than inflation -- better that CDs have done in the past 10 years and they are a lot more enjoyable to look at :)
 
To me, a better example of sunk cost would be something like paying $200 for a case of wooden-projectile steel-case 7.62x39mm training ammo, having it get completely submerged in water to the point of the wood bullet rotting and powder and primer being completely water logged, and not wanting to throw it out because you'd "lose" $200 by throwing it out.

Another example would be buying a Jennings 25ACP for $50 and spending $300 on a gunsmith to get it working and then it breaks again and you won't trade it in to the dealer on a new Ruger cuz dealer is only offering $20 but you don't want to get $20 cuz you're "losing" $330 on the Jennings.
 
To me, a better example of sunk cost would be something like paying $200 for a case of wooden-projectile steel-case 7.62x39mm training ammo, having it get completely submerged in water to the point of the wood bullet rotting and powder and primer being completely water logged, and not wanting to throw it out because you'd "lose" $200 by throwing it out.

Another example would be buying a Jennings 25ACP for $50 and spending $300 on a gunsmith to get it working and then it breaks again and you won't trade it in to the dealer on a new Ruger cuz dealer is only offering $20 but you don't want to get $20 cuz you're "losing" $330 on the Jennings.
those certainly are more classic examples but not applicable to me.
 
Or the boatload of guns people accumulate, never or hardly ever use, and refuse to sell for some inexplicable reason.....but I see what you did there. :rofl:

.

Maybe this is the explanation for something I cannot understand: if they keep making and selling millions of guns a year, why are used guns as expensive (more or less) as new ones?
 
Sunk cost as a term refers simply to resources (money) already spent, with an understanding that resource is not recoverable.
The concept of sunk cost in economics predates the more recent behavioral economics discussions; I studied it in Economics 201, (Keynesian) Macro Economics, in 1969.
The concept (not theory) is that it is a fundamental mistake to decide on future actions using unrecoverable prior spending (sunk costs) as the reason for the decision. Stockpiled ammunition, as discussed in this thread, is not a true sunk cost, because it can be recovered by sale. Buying a gun to use up the stockpile is a faux sunk cost decision, since the value of the stockpile can be recovered by other means, such as a sale.
I believe one of the best examples of a true sunk cost mistake is justifying continuing a war because of casualties already taken, lest those casualties be considered "wasted."
 
There are inherent problems when similar systems are conflated.
Mixing economics and accounting is as natural as mixing meteorology and climatology.
This often happens as the two practices often share terminology, just used in differing ways.

So, it's only logical that microeconomics terminology gets blended into accounting. Hence, the article referenced above. We can have an innate understanding of household accounting, yet, while microeconomics uses similar terms, they don't quite mean the same thing.

Purchasing firearms and and ammo is all discretionary spending. Discretionary spending has no financial value. It will not gain value through interest, or by way of contractual trade. Changes in replacement costs, particularly through inflation, can appear to be an inflation of value, a financial "gain." Which is not the same as an investment, where terms and values can be predicted or scheduled.

And, it's subtle stuff, slippery at every turn.

If I buy a firearm for a unit of currency, and decades later the retail value is Unit(x), that looks like I'm "ahead" on the purchase, that I have gained value. But, I cannot buy a firearm today at a unit of currency, I cannot project a Future Value by way of an increasing percentage over time. Further, because inflation is a fickle beast, the actual Present Value might actually be less in inflation-adjusted currency, even if the amounts are different.

So you buy a shooter for $100 thirty years ago, and it's $1200 retail, today--so you are "ahead" $1100, right? Not if inflation makes that $1100 only worth $800-900; that instead of being worth $100 in thirty-year-old currency, it's actually only $80. So, you are in a $20 "hole."

We buy firearms and their accoutrements because that is our preference. Something we do for our pleasure, not for our gain. For gain, you want something that has a contract to pay a known profit over time.
 
while there's utility in having a stockpile i would say there would have been more utility for me if i shot the ammo and yet i did not. i am talking about my 22 mag and 22 lr personal examples.

ammo is not really that fungible(at least without effort) so I'd still consider it as a sunk cost.

i am just pointing out how i look at my actions in hindsight and maybe some other shooters can just relax and enjoy shooting what ammo they have.
No, still not a sunk cost as it still has value and you can liquidate it and certainly recover your cost today, if not show a profit.

JMHO, of course.
 
There are inherent problems when similar systems are conflated.
Mixing economics and accounting is as natural as mixing meteorology and climatology.
This often happens as the two practices often share terminology, just used in differing ways.

So, it's only logical that microeconomics terminology gets blended into accounting. Hence, the article referenced above. We can have an innate understanding of household accounting, yet, while microeconomics uses similar terms, they don't quite mean the same thing.

Purchasing firearms and and ammo is all discretionary spending. Discretionary spending has no financial value. It will not gain value through interest, or by way of contractual trade. Changes in replacement costs, particularly through inflation, can appear to be an inflation of value, a financial "gain." Which is not the same as an investment, where terms and values can be predicted or scheduled.

And, it's subtle stuff, slippery at every turn.

If I buy a firearm for a unit of currency, and decades later the retail value is Unit(x), that looks like I'm "ahead" on the purchase, that I have gained value. But, I cannot buy a firearm today at a unit of currency, I cannot project a Future Value by way of an increasing percentage over time. Further, because inflation is a fickle beast, the actual Present Value might actually be less in inflation-adjusted currency, even if the amounts are different.

So you buy a shooter for $100 thirty years ago, and it's $1200 retail, today--so you are "ahead" $1100, right? Not if inflation makes that $1100 only worth $800-900; that instead of being worth $100 in thirty-year-old currency, it's actually only $80. So, you are in a $20 "hole."

We buy firearms and their accoutrements because that is our preference. Something we do for our pleasure, not for our gain. For gain, you want something that has a contract to pay a known profit over time.

CapnMac ... the king of explaining stuff in sensible, understandable fashion.
 
Ammo is not a sunk cost! It is a consumable part of the shooting sports. It has value before and after you shoot it. It holds its purchased value and may even appreciate in times of shortages. You can sell or trade the unfired rounds or the fired brass. Shooting it helps improve your shooting skill so you gain value from that also.

Shooting your ammo is no different than using gas in your car.

A sunk cost is something you spent time or money on that you can’t recover the value no matter what you do.
 
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Of the calibers I use, if I see a 'decent' deal, I buy some. Not shooting at all BUT..why the ammo hoarding? People need thousands of rounds because of??
Civil war or the zombie/Covid hoards coming over the fence?(doubtful), shoot a lot(doubtful), worried that may not be able to get it in the future?(probable)...
 
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Of the calibers I use, if I see a 'decent' deal, I buy some. Not shooting at all BUT..why the ammo hoarding. People need thousands of rounds because of??
I do just about the same. I see a sale or good deal I take advantage of it and buy. I don't shoot all that I buy. Next time I see a good deal or sale I do the same. Over the weeks, months and years all of what I don't shoot or use adds up.

During these summer months I try to normally hit the range 3 times a week and on each visit I shoot maybe 300 rounds of assorted calibers. When hard times come I need not change my routine. I also do the same with reloading components. Does that make me a "hoarder" because I just see it as being wise. I also share during hard times with friends and family. Eventually the stuff gets used or given away. Nice thing about ammunition and components is the long shelf life. :) I do not see any sunken cost?

Ron
 
I sunk more money into ammo in the last month; I'm going to shoot conservatively, as if I don't know when ammo will be "reasonable" to find & buy again.

Of the calibers I use, if I see a 'decent' deal, I buy some. Not shooting at all BUT..why the ammo hoarding. People need thousands of rounds because of??
Civil war or the zombie/Covid hoards coming over the fence?(doubtful), shoot a lot(doubtful), worried that may not be able to get it in the future?(probable)...

How do we get "ammo hoarding" from what I posted? How is that when I gave no example?
For example, I order a case of 10mm FMJ, because I'm extremely low on 10mm FMJ.
1,000 rounds. Lets see, if I shoot 25 rounds a week (100 rounds a month) I'd burn through a case of ammo in 10 months.
Is 10mm FMJ going to be available in 10 months from now for $20 for a box of 50 (delivered)? I don't know.
Is it possible I might want to shoot a little more sometimes than 100 rounds a month? I just might.
Therefore, is ordering two cases of 10mm FMJ for $400 a case (delivered after tax and shipping) reasonable? I'll just leave that unanswered.
 
Therefore, is ordering two cases of 10mm FMJ for $400 a case (delivered after tax and shipping) reasonable? I'll just leave that unanswered.
I see it as reasonable. Every time this sort of shortage happens someone will start screaming "hoarders" at the top of their lungs. Buying more than you need of something is not hoarding and that is exactly what many of us do.

Ron
 
Possession of thousands of rounds hardly equals "hoarding."
Shooters who compete -- be it IDPA, clays, .22 long range, Steel Challenge, etc -- routinely keep thousands of rounds on hand. Practice sessions and match days mean expending ammo.
Also, I do know many people who had "thousands of rounds" of everything they regularly shoot on hand before the COVID arrived or before anyone had heard the name George Floyd. Shooting is a constant in their lives. The thinking re keeping ammo on hand is that as long as it doesn't impact one's non-discretionary spending, the stuff doesn't spoil and buying at optimum times hedges against silly-time prices.
Many people have maintained and do maintain personal stocks of "thousands of rounds" without ever giving a thought to civil disorder or zombies.
 
...Moral of the story: shoot what you have and don't squirrel it away...
Not trying to be flip here, but to me your story seems to be more about accounting/storage/labeling issues than economics or sunk costs.

If you'd known that you still had 800 rounds of .22 magnum ammo, that would've affected the decision to sell your Ruger.

If you had clearly labled the .22 mag ammo and stored it separately from the long rifle stuff, chances are you would've known you still had it.

You can't make good economic decisions unless you know what (and where) your assets are.
 
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