Ammunition cartel?

ANY manufacturing, not just ammo, operates on a 10 yr plan.

1. Discussion on possible NEED / desire for expansion. 2-3 yrs of studies, discussions and logistics.
2. Decision made to expand. 2-3 yrs to obtain capital, approve plans, schedule construction.
3. Construction, equipment and staffing. 5 years.

Many things can / do change in a worldwide economy in 5 yrs. Before the actual construction begins, plans can be changed / cancelled. After that, it happens, at great expense. Look at the massive projects around, where a building as 25%, 50%, 95% completed and shut down, walk away.

Even a major need, where decisions to add production hours ( to 24/7 ); how long can the workers go? Do you hire and train more people? Time and expense? Is the equipment capable? Maintenance?

Planning 10 years ahead, when situations change overnight, not easy or fun. Just a guess, at best.

Well there was this business group called the Freedom Group and they made ammo under the Remington label but we were supposed to hate them for some reason, cannot remember exactly why. So they went bankrupt and the remains of the day were bought up out of court so where there was three there are now two. But, wait, I think we are now supposed to hate Vista Group now so soon there will be only one before there is none. Probably an over simplification.

3C

Steel Horse Rider said:

When I looked at all of the companies owned by Vista Outdoors and then the VSTO stock I got excited until I saw that they don't pay a dividend. I don't buy stock in companies that don't pay me for loaning them my money so they are certainly not managing things to reward their stockholders.

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I’ll get reprimanded on this board if I explained why your view is limited and cost you, so I won’t.

3Crows said:

Well there was this business group called the Freedom Group and they made ammo under the Remington label but we were supposed to hate them for some reason, cannot remember exactly why. So they went bankrupt and the remains of the day were bought up out of court so where there was three there are now two. But, wait, I think we are now supposed to hate Vista Group now so soon there will be only one before there is none. Probably an over simplification.

3C

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Just SAY NO to hating! LOL!

Seriously, I think Freedom Gp, like Colt, was plagued by mismanagement, leading to their demise.

Until a company does something immoral, unethical, or illegal, I’ve no hate for them, regardless if I like their products or not.

Buzznrose said:

I’ll get reprimanded on this board if I explained why your view is limited and cost you, so I won’t.


Just SAY NO to hating! LOL!

Seriously, I think Freedom Gp, like Colt, was plagued by mismanagement, leading to their demise.

Until a company does something immoral, unethical, or illegal, I’ve no hate for them, regardless if I like their products or not.

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Many of these investment groups have the objective of buying a company, cleaning out employee retirements funds, screwing employees over, giving themselves huge bonuses, filing bancrupcy and moving on to them next pigeon.

To many accountants in charge, instead of businessmen.

I hate to say it but you should have been hoarding ammo when it was cheap and went on sale. I bought it when I came across a sale for many years, and have an ample amount. I see a lot of shooters buy ammo like bread, when the old loaf is gone, they go buy.
I know you can't go back and change what has happened, but when it gets cheaper, I would suggest loading up.

Handshaker said:

I know you can't go back and change what has happened, but when it gets cheaper, I would suggest loading up.

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The problem is: when do you know the ammo is cheap? I doubt primers will ever get back to $30/brick. If prices fall $10 and you start stocking up again, won't you be contributing to the glut of hoarding people? I went to a gun show last weekend. I saw ammo that was 40 years old and they were trying to sell it at current panic buying prices. I didn't see anyone buying it. That's a good thing.

I don't think anyone knows where ammo will end up with inflation and the current state of the market. But that is also skewed by how much I paid for it before the pandemic. There is a point though that i wont shoot if the ammo is too expensive or I will reload it. Even before the pandemic, i compared the cost vs reloading for not-so-common calibers or the ones that have gotten too expensive. I reload now 45-70,221 fireball, 7mm int-r, 7.62x25mm,45 colt,30-30 and for benchrest 22-250. More calibers will be added as they get too expensive to buy. I also shoot black powder.

Steel Horse Rider said:

When I looked at all of the companies owned by Vista Outdoors and then the VSTO stock I got excited until I saw that they don't pay a dividend. I don't buy stock in companies that don't pay me for loaning them my money so they are certainly not managing things to reward their stockholders.

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I guess that is your money, your loss. My buddy got 50 shares of McDonalds in 1980 @ $40/share when he got married. They don't pay dividends either. It has split several times over the years. Wanna guess how much it is worth today? $260/share.
Vista stock has doubled between 2019 and 2020. Oct., 2019 $19/share; June, 2020 $38/share. You could double your money. I bought some last July at $40/share; today's price is $45.17. Market projections have them going to $54/share this year.

There's more to surviving in the world of manufacturing than meets the eye and arm chair quarterbacks make terrible CEOs.

We are the consumers, not the managers. We get one option and one option only. We open our wallets or we don't.

Belly-aching over availability one minute and then squawking over price the next, or plumbing the depths of conspiracy theories may be protected free speech, but it doesn't help change the situation or improve anything.

You guys do understand that stocks can both increase in value(mostly just a reflection of the devaluation of the dollar) and pay a dividend???

Deleted.

Handshaker said:

I know you can't go back and change what has happened, but when it gets cheaper, I would suggest loading up.

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This is the advice that has been given on these types of forums for over a decade. This so called "loading up" is why prices are high and supplies are low. As long as folks continue to buy ammo at ridiculously inflated prices, those prices will never go down. Why should they? Retailers are asking over MSRP because they are getting it. No different than the Harley market back in the early 2000s. No different than the ATV/UTV market last year. Yes, sometime in the future, prices will level off and supply will catch up. But the longer folks think they are desperate and feel they need to buy anything they can at whatever price is on it, it ain't gonna happen.

Interesting article, here is my economist 2 cents.

First, if we assume that the ammo suppliers are all ultimately owned by 2 firms, that creates an Oligopoly structure for the domestic market. The price implications of Oligopoly are not as simple as a monopoly, and a variety of models can be used to consider market implications. Sometimes oligopolies produce markets with high CS, other times they produce markets with minimal CS.
Second, the assumption is that the two holding firms do actively manage the activities of subsidiary firms to eliminate competition within them. This is a major assumption and may or may not be true.
Third, cutting against this entire idea is the fact that prices were low in 2019, when the market structure was substantially the same. The fact that prices have risen since then indicates that it is the major demand shift right, and minor supply shift left, that resulted in P* rising to current levels.
Fourth, due to foreign producers, the above argument of oligopoly is also weekend.
Fifth, while I don't think any of the Zero Hedge article fact base is wrong, their interpretation is perhaps a bit questionable. Firms seek to maximize returns, which means maximizing profit. I have doubts that with current elasticity of demand and prices that cutting output is an NPV positive decision.
Sixth, we are not seeing expansion in the industry for a host of reasons, and none of them are particularly nefarious or hard to understand.

Zendude said:

If the shipping logistics can get untangled, supply from outside the U.S. should force prices down.

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I share this optomism

Zendude said:

If the shipping logistics can get untangled, supply from outside the U.S. should force prices down.

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Ain't happenin' anytime soon.

China has shut down all of their ports as of today and we're no longer sending full connexes back to them in exchange for their full ones ... it's all outta wack.

I'm not really sure that supply chain is what is making that much of a difference .... imho it's more about demand, plain and simple.