You might like to read through this, not to extrapolate any universals from this one data point, but because the subject is brought up among many other useful thoughts on this excellent blog:
http://ferfal.blogspot.com/
Question about Guns and Gold as a hedge
- Thread starter JoeShmoe
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You might like to read through this, not to extrapolate any universals from this one data point, but because the subject is brought up among many other useful thoughts on this excellent blog:
http://ferfal.blogspot.com/
For those that say Guns are not an investment...
Generally speaking, I agree that guns are not a good investment, except for some Class-3's and some historical examples.
But my wife cringed everytime I brought home another.
Now with our 401K down more than 60%, and even Gold devaluing, the only thing I have that has not dropped in guns. And she said to me, how many rounds of ammo do you have hoarded? It is the only thing we have that has not shrunk in value.
I dare not tell her the size of my stock pile, as I think she would go ape. Or maybe not - maybe she would be pleased we still have something left worth something!
Generally speaking, I agree that guns are not a good investment, except for some Class-3's and some historical examples.
But my wife cringed everytime I brought home another.
Now with our 401K down more than 60%, and even Gold devaluing, the only thing I have that has not dropped in guns. And she said to me, how many rounds of ammo do you have hoarded? It is the only thing we have that has not shrunk in value.
I dare not tell her the size of my stock pile, as I think she would go ape. Or maybe not - maybe she would be pleased we still have something left worth something!
That's the kind of thinking that inspired this thread. I'm not thinking of putting all my savings into guns, but having a few nice C&R rifles, and maybe some S&W revolvers, in the gunsafe, with a little bit of gold, cant' be too bad of an idea can it?
Guns and gold are barterable or saleable goods- regardless of the economic situation. If we experience hyperinflation, they will have value. The next time we have a "growth spurt": they will have value. Guns have the added value of protection and hunting in a true economic catastrophe. A friend of mine has a one of a kind Browning over and under 30.06 rifle, custom built for him while the Brownings still owned the company. He told me "and if things get too bad, I can still use it to shoot a deer and feed my family".
The bottom line is that, as in every investment strategy, diversification is critical. For the past 15 years, I have been investing in different things. 401K,CDs, IRA, Roth IRA, guns, gold, art, private companies... you name it. Right now, my portfolio is safe because of it. My stocks and bonds are in the toilet, but gold is $900+ per ounce. My CD's are still making 6%, but my money market is making .6%. I sold several guns this year at a significant profit- which I used to buy more guns and accessories.
The best hedge in this economy is to spend your investment dollars where the best values are. Right now, that is in the stock market. Would you rather buy a gun when it is $1000 or $500? Why would you buy gold when it is high, as opposed to stocks when they are cheap? The only reason to hedge is if you are planning on retiring in the next 3-5 years and you want to preserve existing capital. Hedging is the opposite of planning for growth.
Even if this is the 2nd Great Depression, so what. The first Great Depression ended eventually- this one will too.
The bottom line is that, as in every investment strategy, diversification is critical. For the past 15 years, I have been investing in different things. 401K,CDs, IRA, Roth IRA, guns, gold, art, private companies... you name it. Right now, my portfolio is safe because of it. My stocks and bonds are in the toilet, but gold is $900+ per ounce. My CD's are still making 6%, but my money market is making .6%. I sold several guns this year at a significant profit- which I used to buy more guns and accessories.
The best hedge in this economy is to spend your investment dollars where the best values are. Right now, that is in the stock market. Would you rather buy a gun when it is $1000 or $500? Why would you buy gold when it is high, as opposed to stocks when they are cheap? The only reason to hedge is if you are planning on retiring in the next 3-5 years and you want to preserve existing capital. Hedging is the opposite of planning for growth.
Even if this is the 2nd Great Depression, so what. The first Great Depression ended eventually- this one will too.
Gungnir
Member
I guess that depends on the extent of the economic situation and how long it goes on. At some point of financial collapse, anything that is not utilitarian, ultimately has no value even gold, sometimes a Hershey bar can buy a lot more for Troops with the locals than Krugerands or Sovereigns. You can't eat it, use it to make anything to improve your survival chances, you can't build anything with it, it's just rare and sometimes looks pretty.
Yes it's an extreme situation, but we don't yet know how far down the rabbit hole we've gone with the financial crisis yet, and whether it's really recoverable in any real sense, we hope it is, but a lot of economists have their doubts.
In such dire circumstances guns and ammo can at least perform a job of defending their owners, or shooting game.
Beagle-zebub
Member
Either way, it's probably going to be a better investment than strippers.
winston smith
Member
Invest in yourself first. Get a skill through education that makes you valuable.
Second, invest in ariable land- make your home where you can put in a garden, nowhere near the coast.
Third, Invest in "food that will not go bad over a year".
Then, if possible, in "raw materials for rebuilding"- 2x4s and roofing, nails, screws, and "hand tools that do not require electricity".
Finally, and its too soon for it just now- medical drugs.
Don't expect a fun time in the next 4-6 years.
Second, invest in ariable land- make your home where you can put in a garden, nowhere near the coast.
Third, Invest in "food that will not go bad over a year".
Then, if possible, in "raw materials for rebuilding"- 2x4s and roofing, nails, screws, and "hand tools that do not require electricity".
Finally, and its too soon for it just now- medical drugs.
Don't expect a fun time in the next 4-6 years.
Sharps-shooter
Member
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In my tribe, our investment strategy revolves around buying things that are durable, tangible, and of intrinsic value. Guns can be all of those things. Ammo is not durable (if you use it once, you use it up), but it's necessary for the gun itself.
One strategy that we have for investing is the acronym HEDGE, which stands for
Health
Education
Defense <--This is the bit where guns come in.
Grounds
Energy
In that order. All of these things keep their value during times of economic downturn. Even if there were -no- economy, they would still be valuable. Life is not much fun without health, Education gives you advantages within and outside of economy (and can't be confiscated), Defense gives you the ability to prosper without people victimizing you, land gives you a place to live and maybe work without being encroached on by rent and energy (in the form of food, firewood, oilwells, whatever) is valuable for yourself or other people.
There are good investments like gold and art that aren't part of the HEDGE thing, but it's a good basis to start from.
The Medici, who started out as medics, became loan sharks, and got really really rich, used to say "Money to gain power and power to protect the money"; It's easy to see how gold and guns could be complementary in those roles.
On the other hand, in terms of resale value, guns lose a lot of value when you buy them new (by becoming "used" guns), and might not ever regain that value in your lifetime.
Once I figured up the value of my sharps rifle and its original purchase price and adjusted for inflation, and in 130 years it's ony appreciated slightly in value. and it's a relatively sought after gun.
So, buy low and sell high on the gold; buy low and hold on the guns.
One strategy that we have for investing is the acronym HEDGE, which stands for
Health
Education
Defense <--This is the bit where guns come in.
Grounds
Energy
In that order. All of these things keep their value during times of economic downturn. Even if there were -no- economy, they would still be valuable. Life is not much fun without health, Education gives you advantages within and outside of economy (and can't be confiscated), Defense gives you the ability to prosper without people victimizing you, land gives you a place to live and maybe work without being encroached on by rent and energy (in the form of food, firewood, oilwells, whatever) is valuable for yourself or other people.
There are good investments like gold and art that aren't part of the HEDGE thing, but it's a good basis to start from.
The Medici, who started out as medics, became loan sharks, and got really really rich, used to say "Money to gain power and power to protect the money"; It's easy to see how gold and guns could be complementary in those roles.
On the other hand, in terms of resale value, guns lose a lot of value when you buy them new (by becoming "used" guns), and might not ever regain that value in your lifetime.
Once I figured up the value of my sharps rifle and its original purchase price and adjusted for inflation, and in 130 years it's ony appreciated slightly in value. and it's a relatively sought after gun.
So, buy low and sell high on the gold; buy low and hold on the guns.
earlthegoat2
Member
Better start stocking up on what is left of the cheaper Colts. As soon as Colt gets out of the business altogether (lets face it, its only a matter of time) then they are going to skyrocket. DSs, Cobras, MKIIIs, and MKVs to name a few.
jad0110
Member
Yep, and as you said, diversification is key. What happened to people like former Enron employees sucked, but it happened in part because many of them had all their eggs in one basket - company stock.
The stock market is low right now, very very low. And it may well go lower, but it is stiill a good time to buy, if you are in a position to do so.
BTW, if you exclude the current high gold prices, gold historically has returned something like 2% a year on average. That doesn't even keep up with inflation ... you'd be better off with an FDIC insured savings account (my pays about 3 - 4% interest)! And as someone else said, if things get REALLY bad, gold really won't be worth anything anyway. You can't eat it, make a shelter with it, cloth yourself with it or wipe your backside with it. No, instead a barter system appears in which people trade goods and services - things that have value. In this situation, you'd be better off to have a sufficient number of guns and lots of lots of ammo to fight off the zombie hords who bought gold!
In the end, Americans are hard working and highly resourceful. We'll overcome this latest challenge, it may take some time, but I am confident that the tide will turn. In spite of what Washington is doing to "save" us.
Right now, the best advice I can give is to get out of debt. At a minimum, everything but the house ... for now ... that will take a bit more time for most of us. IMO, people living on the edge (paycheck to paycheck) is a big reason why we are having this discussion. All it took was a hiccup in the economy to push millions over the cliff, and make what could have been an inconvenience into a rather large mess.
Next, save up a pile of cash (say at least 6 months of expenses) and park it in a savings or money market account. Some place safe and fairly easy to access in an emergency. Take it from me, life is so much more peaceful when you aren't living from one dollar to the next.
Then, go from there. Whatever makes you happy. Gold, guns, mutual funds. Preferrably all of the above
.LightningJoe
Member
Plan A: Inflation-protected Treasury bonds
Plan B: Gold bullion coins
Plan C: Emigration
Plan D: Guns, ammo, non-perishable food, gasoline, etc.
Or perhaps the Left-wing cabal that has seized the Federal government and which uses Barack Obama as a spokesman will solve all our problems and then you can buy index funds and await our wonderful future.
Plan B: Gold bullion coins
Plan C: Emigration
Plan D: Guns, ammo, non-perishable food, gasoline, etc.
Or perhaps the Left-wing cabal that has seized the Federal government and which uses Barack Obama as a spokesman will solve all our problems and then you can buy index funds and await our wonderful future.
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Unfortunatily, as some have already said, tangiable goods. Most importantly food and water. Tools for survival. Guns, ammo, water filters, freeze dried foods, etc. Eventual recovery based on historical examples makes the assumption that the "system" is realitivily the same as in the past. The system is being fundamently changed. I have grapled with the decision of should I buy gold or ammo (or other tangible goods). It always comes down to what do I think I could trade for food or water in a desperate situation.
ThrottleJockey
member
+100 "lead travels better. and when offered properly, most people will not only insist that you keep it; they will even offer you what you wanted for free."
For more than 3 years now, I have been telling people to buy as many guns as they can, then invest the rest in the three precious metals, copper, lead and brass. No matter what happens, you will at worst, break even. If (more like when) the SHTF, weapons and ammo will trade for anything you need. If you need food, you can get it with guns, either through hunting, trading, or outright taking. Money and gold/silver/platinum etc will really be worthless. You can't really do anything with them other than make yourself "sparkly".
This is the path I have chosen, and I am happy with my choice. Everything I have has nearly doubled in value, even the "junk" WASR10s. Plus I have a LOT of fun with them in the mean time
For more than 3 years now, I have been telling people to buy as many guns as they can, then invest the rest in the three precious metals, copper, lead and brass. No matter what happens, you will at worst, break even. If (more like when) the SHTF, weapons and ammo will trade for anything you need. If you need food, you can get it with guns, either through hunting, trading, or outright taking. Money and gold/silver/platinum etc will really be worthless. You can't really do anything with them other than make yourself "sparkly".
This is the path I have chosen, and I am happy with my choice. Everything I have has nearly doubled in value, even the "junk" WASR10s. Plus I have a LOT of fun with them in the mean time
earplug
Member
Gold KITCO, Goldmoney.com. MJPM.
Gold has always done very well during crises.
I have read that Gold tends to out perform its normal ratio against silver during a siege or blockage due to it being more portable.
Normal ratio is 15-20 to 1. Gold can get you out of a country faster then a load of food and weapons.
The Vietnam boat people used gold to enable their migration to the USA and other places. Gold has always been a store of value.
Ask a Cuban if Gold would have helped them leave.
If you have a 357 and need ammo, A person with 9mm is out of the barter business and vice versa. How many rounds of ammo do you really think you need in a civil war?
If I can live past twenty well aimed rifle rounds, My fifty odd year old body will be happy.
I'd rather be out of harms way.
Food is nice, but if you have to move in a hurry, gold is better.
Gold has always done very well during crises.
I have read that Gold tends to out perform its normal ratio against silver during a siege or blockage due to it being more portable.
Normal ratio is 15-20 to 1. Gold can get you out of a country faster then a load of food and weapons.
The Vietnam boat people used gold to enable their migration to the USA and other places. Gold has always been a store of value.
Ask a Cuban if Gold would have helped them leave.
If you have a 357 and need ammo, A person with 9mm is out of the barter business and vice versa. How many rounds of ammo do you really think you need in a civil war?
If I can live past twenty well aimed rifle rounds, My fifty odd year old body will be happy.
I'd rather be out of harms way.
Food is nice, but if you have to move in a hurry, gold is better.
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