Firearms as monetary investments

[JohnL2]

Okay, after seeing antique roadshow on PBS I was wondering how one could get started on collecting firearms to be investments for the future.
Firearms with historical significance are hard to find of course, so how would one go about determining which guns would increase in value that is of current or relatively current manufacture?
Limited run guns? Collector show pieces? Guns with some cachet attached to them? Just knowing really rare gems that manufacturers quit making? War trophies?

 

[Keith Wheeler]

Full auto. About 13% per year. At least that's what I got out of my SWD M/11 SMG.

 

[Outlaws]

Okay, after seeing antique roadshow on PBS I was wondering how one could get started on collecting firearms to be investments for the future.
Firearms with historical significance are hard to find of course, so how would one go about determining which guns would increase in value that is of current or relatively current manufacture?
Limited run guns? Collector show pieces? Guns with some cachet attached to them? Just knowing really rare gems that manufacturers quit making? War trophies?

As with all investments, its all about researching and knowledge. You can't just ask and get the right answers because if it was that easy, everyone would do it.

All investments involve a risk/reward balance.

If you want to take risk and make money, get into the stock market. If you want to save money and have it grow, there are a million ways to do that too.

Firearms are not exactly the best way. FA is going up in value, but the stroke of a pen and they could be less restricted again....but that is unlikely. What IS likely, is that a simple stroke of a pen and they are TAKEN OUT OF YOUR HANDS.

 

[Justin]

Other than investing in stuff that is either exceedingly rare, historical, or certain NFA items, guns generally aren't a great investment.

Most well-made firearms will tend to hold their value, and even increase some over time. However, in the long run, if you're serious about putting money into an investment, you're better off buying shares in mutual funds.

 

[JohnL2]

There has to a few guns out there worth pursuing and owning. I'll look into it.

 

[JJE]

There are many guns worth pursuing. I think what others are suggesting is that the guns that are most likely to appreciate significantly are the ones that are already quite pricey and possibly difficult to obtain. There ARE guns that aren't astronomically expensive that will probably appreciate well (Pythons come to mind), but they probably won't appreciate as much as other things that are a lot more convenient as investments (mutual funds).

If you want to make serious money, you aren't going to learn how to do it on a forum (we don't know either!). If you enjoy hunting down firearms, and maybe making enough of a profit to cover your expenses, that seems like a reasonable goal (but I don't even know how to do that - I've never made a nickel on a gun or knife).

 

[Chipperman]

My machine guns are worth a lot more now than when I bought them. It's meaningless to me, because I never intend to sell them.

Another thing to consider is the legal aspect of guns, especially NFA. All it would take is a few pen strokes banning transfers, and they all become worthless.

 

[busdriver72]

I've made a some extra cash through curio & relic guns, though it does require research and knowing what you're getting. For example, I found an Old Mosin nagant in a gun shop. The tag said "Russian gun...$75." I offered them $50 and they took it. What I got was a New England Westinghouse M91, which was a Mosin made in the USA for Russia during WWI. It had markings which gave clues as to its history (made it to Russia, and then somehow back to US.) I sold it for $150, which was $100 profit. I also found one with the '41 Winter War mark, and I made about $100 on it, too.
It takes really knowing the guns and marketing to those who are really interested in them.

 

[MatthewVanitas]

Here's an interesting way to look at it:

Lee Harvey Oswald bought his 1891 Mannlicher-Carcano rifle (military surplus) for $19.95 through a mail-order catalog.

Had he not shot the president, the rifle would be worth under $100 today.

Factoring in the rate of inflation, $19.95 in 1963 dollars is about $121 bucks today. A standard 1891 Carcano can often be bought under $100.

So, had Oswald not shot the president, the cost of his rifle wouldn't even have kept up with inflation.

I'm sure his rifle is worth an absolute fortune now, but he won't be enjoying it anytime soon.


A firearm can be a "wise purchase", but by no means is it a solid financial investment for the long haul.

-MV

 

[Chipperman]

Just make sure you are not using your C&R license to "engage in business".

 

[redneck2]

Buying guns as an investment means that you have to figure out which ones are going to worth more...

actually a LOT more than they're worth today.

For example, I know a guy that has unfired original Belgian Browning A5's in the box never opened. He paid maybe $600 in 1970's dollars and they're worth maybe $700 in 2006 dollars. He lost money, or at least buying power.

I know another guy that bought a crapload of the commemorative Winchesters, etc from the 60's and 70's. They don't bring any more if as much as regular models. I worked at a gun store and we had a real hard time selling any of them.

Unless it's something like John Dillinger's sidearm (and you'd better have plenty of proof), you're going to be lucky to do well.

Unless you're lucky and hit something special, you'd be better off in mutual funds. Probably not what you want to hear, but it's the truth.

 

[ArfinGreebly]

On The Other Hand

I know a guy with a dozen or so M1 Carbines, for which he paid not more than $120 for the most expensive. Can't get him to sell me even one.

I haven't been able to find a decent M1 Carbine for less than $600 on consignment. Found two non-mil-spec models for $450, very used.

The brand new ones by Auto Ordnance are selling at $600+ retail.

I've noticed that Garands are no longer $100 either.

Guy who works the counter at Wal*Mart in Carson Valley is a little older than I am, and remembers when they were $25. His dad bought a couple from a barrel at Sears.

On the other hand, you could always invest in a collection of Jennings . . .

 

[MatthewVanitas]

For example, I know a guy that has unfired original Belgian Browning A5's in the box never opened. He paid maybe $600 in 1970's dollars and they're worth maybe $700 in 2006 dollars. He lost money, or at least buying power.

According to the West Egg Inflation Calculator

What cost $600 in 1975 would cost $2247.37 in 2005.

So, he's lost himself about $1800 so far.

Gets better, had he invested in a fund which earns 11% per year (historic average), he's have about $13,000 by now.

I like owning guns, but I don't expect them to make me rich any more than I hope that my Ikea silverware will bring a mint at the antique mall when I retire.

-MV

 

[gezzer]

Colt SAA 2nd Gen NIB, going up at about 5-7 % per year.

NFA? stroke of pen no more transfers?

 

[MatthewVanitas]

Colt SAA 2nd Gen NIB, going up at about 5-7 % per year.

A good reason to value and cherish your SAA, but there are CDs that draw that much now, much less Mutual Funds, etc.

Not to mention that the wisest investment most folks could make is paying down their 18% credit card debt.



IRT SAAs: going up in value now, sure. But what if the current demographic of 50-70 years olds who grew up watching Cowboy movies and TV shows dies off, and the next generation has no interest in SAA? I'll be buying 'em up by the truckload for $300 each in about 20 years. Please keep it nice and oiled for me in the meantime, and if you're somebody important, make sure that you keep the receipt in the box so I can prove that you once owned it. Thanks.

-MV

 

[ArfinGreebly]

Okay, What About Ammo

It may be that the machinery doesn't make a great investment, although it certainly can be said that a good piece is likely to appreciate rather than depreciate.

On the other hand, the food for that machinery may be subject to considerably more inflation.

Anyone have "fax 'n' figgers" for the inflation curve of ammo?

 

[kennedy]

you can make money on guns two ways, buying it right(under market value) or buy what is going to go up in value in the next few years. The only way to know either of these is research and patiance for the right deal. example bought a german GEW 88 rifle at a local auction for $70(under market value), spent $1.00 for a missing screw, sold it 2 weeks later for $170. Bought a Finn M27 mosin nagant rifle a few years ago for $125 from a pawn shop, shot it, added a correct sling, enjoyed it for a few years and as demand went up sold it for $350. Of course the more rare the better, but only if there is a demand for it, also condition condition condition, matching numbers, orginal box, available cheap ammo for it, all help establish price. I just bought a colt anaconda in 44 mag, new in box never fired for $650, I place a value of $1000 on it and will hold it untill I get that price. In the mean time I can touch and fondle it, something you can`t do with a stock certificate.

 

[harvester of sorrow]

On the other hand, the food for that machinery may be subject to considerably more inflation.

Ammo would also mostly be a terrible investment. Ammunition prices are historically stable except during periods of sudden scarcity like now, where fear-mongering, panic-buying, and speculation have led to prices on things like surplus .308 doubling. Anyone who remembers The Great Primer Scare of the early 1990s can attest to this.

Surplus ammunition prices for available calibers like .308 can't really exceed the price of newly-manufactured .308 unless people REALLY like the packaging. Even calibers like 8mm that are not newly-manufactured in large amounts can still be bought at some price, which limits how much surplus might appreciate.

Also, the same potential "legislative stroke of a pen" that people mention as a factor to consider in NFA weapons applies here. There are always rumors of legislation forbidding owning more than "X" number of rounds, or requiring an "arsenal tax" of $Y to own more than "Z" number of rounds, etc.

If you enjoy buying and selling guns, accessories, and ammo, go for it (in compliance with applicable laws, of course). Just remember that only rarely do enthusiasts make money at it.

 

[Steamship Trooper]

Any thoughts on investing in firearm COMPANIES?

I doubled my money in Smith and Wesson when they got out of reorganization. I'm watching to see if Colt will do the same.

Just like gambling, the only folks that REALLY make money at it are the casino owners.

 

[redneck2]

Just remembered....

I know a guy that registered a bunch of "receivers" (chunks of pipe) for Sten guns (IIRC) right before the full auto ban. I believe it cost him $10 apiece. If they would have outlawed full auto, he'd have been out the money. Since he had that little piece of paper, he made a killing. Had something like 200 at $10 apiece and I believe sold them for $2,500-$3,500 each.

Gambled and won that time.

 

[Trebor]

For investment purposes, here is where I personally see possibilities:

Full Auto anything - Even the "cheap" Mac guns are appreciating in value quickly. Nicer guns are already getting almost too expensive for normal folk to own.

U.S. Military arms from WWII: The price of Garands and Carbines has jumped over the last few years. Will this trend continue? I think so, at least for the nicer examples. Buy the cleanest, nicest, "most original" guns you can find and hang onto them.

Other WWII small arms: For example, Soviet Mosin Nagants are cheap right now, but several variants are more expensive now then they were just a few years earlier. Grab as many cheap Mosin Nagants as you can and look for unusual variants and rare varities.

Colt Revolvers: Colt is pretty much out of the revolver business. Pythons and clean Dective Specials should keep appreciating. There hasn't been much interest, that I've seen at least, in old Official Police models so it might be worth picking up some nice clean examples of those in anticipation of possible future interest.

Smith and Wesson revolvers: The classic "blue steel and walnut" guns are appreciating already and I think that will continue. Look for really nice examples, with as many accessories or boxes, etc, as you can. The boxes themselves can be worth several hundred dollars. You can still find "nightstand guns" if you hunt.

"assault weapons:" If we get another AWB, the prices will go up again. Buy an AR, if you don't have one, and a good quality AK as well. Older guns that can no longer be imported are still going up slightly in value.

What I *don't* think will appreciate are run of the mill, commercial guns for hunting or casual shooting.

Just my opinion. YMMV.

 

[dfaugh]

you can make money on guns two ways, buying it right(under market value) or buy what is going to go up in value in the next few years.

Preferably both. My best shooting buddy spent several years accumulating quite a collection of guns (100+). He has a database where he records his cost + any restoration work costs (as well as load info, etc.)

Now, like most investments (especially with "collectibles") you need a thorough knowledge of the subject so you can spot a good deal (with guns, its usually rarity and condition). He happens to be a bit of an expert on Winchester guns, especially lever guns (but some others brands/types as well). He can go to a gun show and KNOW if a particular gun (usually a combination of model/style/caliber) is rare.

He's fallen on hard times recently(permenantly disabled), and had to sell a few of his lesser guns. He's averaged 100% profit on the ones he's recently sold (doubled his money). Most were purchased between 10 and 15 years ago, so that's a decent, although not out standing profit.

But, again, you need to know all the ins and outs of what you're buying. There's deals out there (usually from people who don't really knwo what they've got) which can be profitable. But, IMHO, best way is to find something out of the ordinary, at a low price, and immediately turn it around. You may only make a smal profit, but if you sit on it for years, who knows what will happen.

 

[MatthewVanitas]

He's averaged 100% profit on the ones he's recently sold (doubled his money). Most were purchased between 10 and 15 years ago

At 10% interest, money takes, what, 8 years to double in value, vice his 10-15?

Not to mention all the time he invested in going to shows, researching models, cleaning and oiling the guns, providing secure and climate-controlled storage, etc. I have long-term investments that I spend maybe an hour looking at once per year, and that's all of my life that they take up. Further, note the risk he took of theft, damage from a burst pipe or extreme weather, or arbitrary changes in gun "fashion" that could have caused major fluctuations in value.


If he truly enjoyed it as a hobby, good on him. Plenty of hobbies give you almost no money back, but he got his hobby money back and then some when he needed it. If he did it purely for financial gain, he hosed himself bigtime.

I still stand by my original contention that firearms are not (for the average gun owner) a better financial instrument than stocks, bonds, CDs, etc. And again, very unlikely to be a better investment than paying off your high-interest debt.


-MV