The concept of Sunk Costs and Ammo

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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.
Not talking about you but in general. Probably shouldn't have quoted your post. Deleted, Sorry...
 
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.

i agree. but that is the point of my whole post. shutting down shooting of a particular caliber in spite of still having a lot of bullets when you've already spent the money anyway.

shoot it. as i mentioned if you run out of it or get only a couple of hundred rds left and you have to really stop shooting. you would just be in the same position of not shooting. these 2 rds are not really self defense rds anyway. ( even the 22 mag as the only gun i had was a SA revolver) does anybody here really think 22 lr prices won't come back down ever again.

this post is there to make you think about your shooting patterns. i am not forcing you to my POV.

regarding the value of the ammo. perception is reality. i have never thought of reselling ammo( we have never even done a garage sale). at most i will eventually use it if i get a gun that will be able to use it( on its own merit, not because i have ammo for it) or if i come across a situation where i can trade it with someone i will do so but i will not be actively trying to sell it or trade it. that is a better example of sunk costs keeping it in spite of not having a gun to shoot it in.
 
everyone should have a few bundles of "potential energy" lying around. a used savage model 24 is a fun way to turn potential into kinetic.

your purchase is still in inventory as an asset. there is no cost here until you sell (or shoot) the ammo.

glass half full,

murf
 
I will not shoot up or sell what I may not be able to replace in the near future. I have spent the money. I do not consider it sunk cost.
I consider the cost as part of the price to get in the game. If I shoot my supplies up I am not longer in the game and my firearms are
now club`s.
 
Barter value!
IF we were to reach a SHTF social situation with severely damaged economy (minimal cash, no electronic funds), ammunition is a far better resource for barter than precious metals, and possibly even than food. The ability to fine tune the amount by # of rounds is exquisite.
The use for barter, alone, may make it worthwhile to keep ammunition on hand for which you have no gun.
 
Been following this thread, feeling somewhat amused. Capn Mac did finally put things into perspective with his take:
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.
Harkening back to the OP:
Moral of the story: shoot what you have and don't squirrel it away. it doesn't bring back the money you've already spent on it and you can quit shooting it when you've run out which would just be the same as having the bullets and not shooting them.
My thoughts on the subject are simply, if you enjoy your firearms (and perhaps collecting more) and shooting, buy as much ammo as you can, when you can, at prices you can afford, and -- as we're talking about a hobby -- quit trying to analyze things in economic terms unless you're not able to keep food on the table for your family, pay your bills and mortgage or you're robbing your kids' college fund and your own retirement accounts.

I order my ammo in thousand-round cases, always have, always will, and I'll continue to do so, despite rising costs.

Can I supply a small country going to war? Probably.

Do I have enough to keep shooting weekly for the rest of my life? Probably.

Do I over-think my ammo supply? Never.

Am I a "hoarder?" I prefer the term "planner." But I'm too old and too tired to worry about what anyone calls me, or thinks of me for how I've chosen to spend my discretionary income.

I'll never have to stop shooting and enjoying my sport because I run low, or run out of, ammunition.

And I have no problem selling some to friends or even new shooters-- at my cost --, and often give it away, by box or case.
 
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What I think you're missing here, is something called "opportunity cost." In economics, that's the cost of choosing one thing over another. The OP could have purchased a convertible Single Six, instead of a Single Nine AND a Single Ten, and had the ability to shoot both rounds.
 
Moral of the story: shoot what you have and don't squirrel it away. it doesn't bring back the money you've already spent on it and you can quit shooting it when you've run out which would just be the same as having the bullets and not shooting them.

This sort of reminds me of a speech I heard as a 2nd LT in Fulda Germany, back in the cold war. Our Regimental commander was giving a "motivational" speech while climbing on an M1A1 tank that was named after his father. Somehow the speech veered into the budget realm and how the regiment was overspent due to training events. The CDR said something to the effect of:

"When those commie ^&*#^&s start coming over the fence, it's not how much money you've got in your wallet that matters, it's how you've been spending it that counts. You don't worry about money, I worry about money"

IMHO it's a good way to look at ammo.......It's not how much you have that counts, but how you've been using it.
 
The thing to remember about sunk cost is that it's a fallacy, and should not be considered in financial decisions.
 
The thing to remember about sunk cost is that it's a fallacy, and should not be considered in financial decisions.
To clarify, sunk costs are real, being unrecoverable prior expenditures. The fallacy is to make financial decisions on future expenditures using those sunk costs as justification for the future expenses. ("If we don't keep going, all that money will have been wasted!")

An interesting example currently in the news is REI in Seattle, who has decided to abandon their not-yet-completed new headquarters building and move to new places outside of the city. Obviously, recent events of massive work-from-home experience, and possibly also the political and safety aspects of the city, made them decide to change directions and not use the planned headquarters building. They do intend to sell the property, recovering at least some of the costs already incurred. Had they pressed ahead with completing the new headquarters because of the money already spent on it, that would have been a sunk cost decision error.
 
...I came across the concept of sunk costs. " a cost that is already incurred and cannot be recovered"...
...at most i will eventually use it if i get a gun that will be able to use it...or if i come across a situation where i can trade it with someone i will do so but i will not be actively trying to sell it or trade it. that is a better example of sunk costs keeping it in spite of not having a gun to shoot it in.
That ammo is absolutely not a sunk cost.

If you can recover your investment, the fact that you choose not to doesn't make it a sunk cost. Accidentally or not, it's become more of a speculative investment at this point since you may use or trade it in the future.

Just because a person isn't actively trying to sell their gold bullion doesn't mean that buying it was a sunk cost.
 
I would disagree on the REI example as a sunk cost. They would more than likely lose a lot by selling a partially complete building (I have no idea how far along it was) but by finishing it, they could actually make money on the sale. This is no different than any commercial or residential building project. A builder puts up a house without a buyer and then sells the completed house for a profit. The builder would more than likely lose money if he quit work and sold it unfinished.
 
I would disagree on the REI example as a sunk cost. They would more than likely lose a lot by selling a partially complete building (I have no idea how far along it was) but by finishing it, they could actually make money on the sale.
I may have failed to explain my example properly. Recall, we have been discussing a "sunk cost decision error," understanding that "sunk cost" really refers to expenses already incurred prior to a new decision.
1. REI's decision to stop development of the in-progress new HQ is definitely not a sunk cost error. They appear to have made the decision on changes to business practices brought on by massive work-from-home experience, and may also have looked at changes in safety and security in Seattle as contributing to the decision to leave the area.

2. IF (a big if) REI had decided to complete and occupy the new HQ in order to avoid wasting the money already spent on it, while ignoring the above described changes (work-from-home, safety, and security) THAT would have been a sunk cost error.

3. Adding your suggestion to complete the building before selling, you have introduced a new complexity into the equation of how best to recover costs in the sale. The choice between sell-incomplete, or complete-then-sell, in either case would NOT be a sunk cost error. Yes, basic tract homes are usually built to completion on spec (speculation) to sell as ready-to-occupy. However, higher grade custom homes are built out only to partial finish, then sold to buyers with the time and money to want a custom finish, being able to select room sizes and positions by choosing non-load-bearing walls, custom kitchen and bathroom designs, options like pools, and personal features, etc. Commercial properties, both office and retail spaces, almost always have to be customized for the specific user. Buying a well established building for new commercial use generally requires modifications to be useful. Therefore, cases such as REI often find it easier to find buyers who can customize in the build-out after (or as part of) the purchase. instead of having to demolish and rebuild parts of the completed building. The decision to sell as incomplete versus finish completely then sell is the difference between building a ready-to-occupy spec house and selling ready-to-customize high end house.
 
All these semantics aside, I think a different frame of reference is probably more applicable. So regardless of what you paid for your stash, if you choose to maintain it at present levels you will have to replace what you shoot at today's prices. Those prices are way outside the comfort zone for me and I imagine a lot of others. This morning I watched a single brick of my preferred 22LR flavor go for $100 plus shipping at auction. If these prices are sustained, there is no way I will be replacing what I shoot if I keep up my typical volume. It is simply not affordable. So every time I shoot, I will have to consider whether I am OK with working down the stash. Prior to the present run, this wasn't an issue because I found prices affordable.

As a practical matter, I stocked up when it was cheap and expect the stash to be worked down over time during periods of market tightness. I imagine I will want a minimum floor amount to not go below, but that just means I will switch from, say, 22 target practice to 38s that I cast and reload for or black powder rifle round ball loads that I can use homemade percussion caps and reduced charges to stretch.
 
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