Rifles/Handguns as Investments

[Sheepdog1968]

There's a media finance person in the San Francisco Bay Area (Rob Black) who has talked about alternate forms of investment. His adivice is until you have at least 1 million dollars from the standard ways (401Ks, IRAs, non retirment funds) in the stock market, do NOT start alternate investments.

There are quite a few options once you have this money. What I typically see as the theme for the other forms of investment is getting top end rare stuff. Anything that is specifically labeled as a collectible (think Franklin Mint, commerative firearms, etc) probably isn't and should be avoided.

Most of us are unskilled enough in most areas where we would loose our shirts. There is a big difference between making a few hundred dollars profit and sinking several hundred thousand of dollars into this.

Personally, I have stayed to the boring stock market index mutual funds from Vanguard. It is slow and steady and boring (we all like exciting don't we) but over a lifetime, it has been shown to work over and over.

Two books I'd suggest:

Millionaire Next Door (will debunk lots of millionaire myths; I think it's by a "Stanley")

The Little Book on Investing by Boggle (or Boggel; or maybe just one g in the name)

Again, these are all my personal opinions. Don't take this as any professional advice.

 

[arizona_cards_11]

I think I'm going to take the extra cash that I've portioned for guns and try my hand at some mutual/index funds at Vanguard. I don't have the experience or time to research individual securities and create my own portfolio......but, I think I can manage a portfolio of passive/active mutual funds and index funds with a high-level strategy.

Thanks again for all of your help. It's nice to hear from those that are much more experienced than me.

 

[HKGuns]

I think I'm going to take the extra cash that I've portioned for guns and try my hand at some mutual/index funds at Vanguard.

Wise move. Good luck. Index funds are the most diversified. Factor in your age and time to retirement when evaluating your risk tolerance. If you're young, go aggressive.

 

[Certaindeaf]

The defense industry (trying to keep it "gun" related here!) has always had some attractive investment opportunities.. perhaps not as a sector but individual companies/concerns. Always diversify though.
No-load index funds are great for the bread and butter.

 

[Ed Ames]

As a side note...

One of the most useful exercises in cases like this is to find an online inflation calculator (e.g. http://WWW.westegg.com/inflation/) and to use that whenever you do a price comparison.

For example...

I remember a particular handgun selling for $179 in 1989. A search of gunsamerica shows them selling for $295 to $325.

According to that inflation calculator $179 in 1989 equals $326 in 2012. So they have held with inflation.

Around that time someone I know paid $369 for a Russian capture Luger. How much do they cost today? About $650-800. So that is better but still hardly great.

Another example. I know someone who paid about $600 for a very nice antique Webley MkII, around 2000. She would need to get almost $800 to break even on that deal. Could she? I doubt it.

Old guns of that range are OK from an inflation hedge perspective but not great.

There are plenty of people who have seen nice windfalls to to panic buying. There is zero reason to believe you can replicate that.

 

[arizona_cards_11]

I think I was bitten by a bit of unrealistic success, early on.

Last year I bought a 'Grade A' HK P7 for $650, which I sold a few months ago for $1350. I quickly doubled my money in less than a year. I now realize that this is not repeatable.

 

[rdhood]

The trick about panic buying (to make money by selling) is that you need to have what the panicked want BEFORE the panic. Who would have thought, for example, that 10/22's and .22LR would be on the panic list?

Last year I bought a 'Grade A' HK P7 for $650, which I sold a few months ago for $1350.

See what I mean? Who would have thought? That was luck. There WILL be more panics, but they may not always be going for HK P7.

 

[AlexanderA]

When you talk about guns as investments, you are really talking about collectible guns, and not guns for daily use. This segment of the gun world (gun collecting) is rapidly aging and dying off. Just go to a purely collectors' gun show (such as the annual Maryland Gun Collectors show at Timonium), and you see it packed full of geezers in wheelchairs, on crutches, etc. The problem is that the prices are too high to attract young people just starting out. The geezers (long-time collectors) can just trade among themselves, using the appreciation in their old guns to buy new ones. I doubt that much new money is entering this hobby.

Guns for daily use are a different animal altogether. But they're not good "investments" either. To be an investment, a gun would have to be kept pristine, and that's fundamentally inconsistent with use.

An investment market is characterized by liquidity -- the ability to buy and sell without undue barriers. Guns are not liquid assets (in that sense), and are becoming less and less liquid as we get more and more government regulations.

 

[soonerfan85]

PLEASE don't tell my wife guns are not an investment. That's the lie, no wait, what I mean to say is that's the excuse, I mean that's the rational as to why I buy certain guns. The unfired BRNO 611 in it's original box I bought for $600 a couple of years back should sell for around $1,000. The old Winchester and Remington slide fire .22s should sell for double what I paid a few years back. The Colt Python, SAA and old S&W pistols are safe queens as well. Problem is I won't ever sell them. The way I look at it is these guns will not loose value like my descretionary funds sitting in a bank savings account will due to inflation and taxes. They are an investment in the sense that my wife will have liquid assets to sell at crazy auction prices when I'm gone. As long as I can keep my hands off of them until then, they should bring a tidy sum for her. I agree that new firearms like ARs and such are probably a risky investment, nonetheless, many collector firearms today were just common firearms in their day. While I believe old firearms that were popular in their day and have since been discontinued, especially in odd calibers, are worth collecting as an investment, who's to say what the next great collectible firearm will be 50 years from now. Maybe the unicorn like KelTec PMR-30 or Sub2000?

When is the last time you took your quarterly mutual fund or stock earnings reports out of the safe and handled them, took pictures of them and talked to others about them? Maybe guns are not an investment, but they are a funvestment.

 

[Zeke/PA]

I never purchased a gun with the investment thought in mind but as it turns out, some of the stuff I bought years ago has really increased in value.
I own six Pre -64 Model 70's, two of which are Pre-War versions.
The old Winchester Lever Actions have value and the older Marlin made "Marlins" are getting harder to find.
Lugers of course, Colt Pythons and K-Frame Smiths.
A couple of friends are after My Fox shotguns and My Ruger #1's.
Admitidly I did some DUMB stuff with guns over the years but for the most part I still own all that I ever bought.

 

[Certaindeaf]

Let's put it this way.. you know those Indians that got a couple a beads for Manhattan?. how we snicker at them for being so stupid? Had they invested (would that have been/be possible) in a conventionally/historically returning vehicle, they'd have now made more money that what Manhattan is now worth.

 

[joeschmoe]

Sorry if somebody covered it already, but I personally do not think you should be investing in something that can be made worthless with the stroke of a pen.

Then you don't understand what "rights" are.

 

[rodregier]

A firearms biggest enemy isn't rust, it's politicians. That's a major wildcard in their market value retention over time. IMHO something like land or junk silver would be a better investment as a hedge again inflation or hyper-inflation. Unfortunate.

 

[Certaindeaf]

Then you don't understand what "rights" are.

Good point. One has to show damages in any court. I think it's interesting there aren't scads of class-action lawsuits directed at lawmakers regarding all manner of infringements. everything can be broken down into money, suffering, yada.

 

[Sheepdog1968]

I think I'm going to take the extra cash that I've portioned for guns and try my hand at some mutual/index funds at Vanguard. I don't have the experience or time to research individual securities and create my own portfolio......but, I think I can manage a portfolio of passive/active mutual funds and index funds with a high-level strategy.

Thanks again for all of your help. It's nice to hear from those that are much more experienced than me.

I think that's a great choice on your part. Also, for what it's worth. I am still 20 years out from retirement and have been saving for about 20 years. The money I have been setting aside has never made me feel like it would ammount to much but after 20 years I'm just starting to get a glimpse that I might be ok (NOT rich) in retirement. Just be consistent and keep doing it in good AND bad markets. Read read and read. Bob Brinker has lots of good books listed on his website. Our education system will teach you all kinds of things but they do not teach anything about investing. This is a big failure.

 

[iiranger]

My favorite "money advisor" is Roland Manarin, Omaha, NE. He was a child in WW II Europe. He saw "economy" from the most basic, barter. Came to US and got educated. In his book he has pictures of German people burning bales of money for heat because the paper money would make more heat than the coal it would buy. !! (Post WW I inflation which was planned...)

Most of the world has strict prohibitions on the private ownership of firearms. The US has moved in this direction all my life. As a child, after reading about .303 British in Jack O'Connor's writings I walked into an Army surplus store and the man sold me one cartridge for $0.15... I could have probably gotten 100 for $2.00 or $2.50. Oh well.

If you insist, the names have held up well. Try to find a genuine Walker Colt. I sold a Browning Sweet 16 to an uncle for $125 many years ago. NRA article had them worth between $2,000 and $4,000. Now the Gyrojets and the Rubys and early Astras and the ??? Small money to a museum maybe. Sometimes decent trading stock.

Gun shop was closing out and I got some boxes of bullets for $2/per. Another close out store had Noslers for $3/per. Yes, jacketed bullets, popular calibers in nice new boxes. And powder. I paid $1.97 for my first can of IMR. Today? $25.00 up. (Thru my dealer long ago friend I got some Hodgdon surplus, odd lot, 8 lbs for $30 or4 maybe $35.) I still have the can but empty, not worth much I fear.

If you want the work, study and focus. Colt? Winchester? Early 99 Savage? Browning? Belgium, not Japan? S&W? U.S. military? 1911's? Plenty of options.

At the same time, I would suggest you take Mr. Manarin to heart. Others "sing the same song." You can use money to spend, lend or be an owner. After every crash (like outlawing guns?) if you own 500 solid companies you still own 500 solid companys. (He uses mutual funds...) And when they recall the green money and you turn in 100 green $1's to get a single orange $1... Your shares will still be worth about the same. Sure, a few companys will go bust. But the rest will chug on. You think the ladies are going to give up nose blowing tissue (like Kleenex?) or soap or perfume. And the men have to have tools and jeans and oil and work boots and tech things. Then there is food. Think Nestle (a Swiss company) is going under? People will give up chocolate?

With guys like Obama so popular (by buying votes) [I loved Regan's words but didn't like the results much. We need another but they are scarce. He had been a Democrat and Union President 'fore he saw the light. Eisenhower was a registeresd Democrat up to about 20 months before he ran for president... Oh yes, Chicago/ and IL are bankrupt. This is the political home of the man chosen for president???] ... I don't think I would go more than 30% or 40% in guns (and at down cycle prices) and put the rest into widely deversified holdings. Yes a few (I said and he says "few") gold coins. 1/10 ounce. Try to buy first but then if all else fails you pull out the shooting iron and say "giveme"... I can and will use ammo to survive and have the means to use it. But if you choose that lifestyle in all but the most, MOST dire desparation..., there is a reason they said, "save the last bullet for yourself."

LUCK. Happy Trails.

 

[iiranger]

By way of comparison...

In the history books I heard again and again that President Frank Roosevelt "set the price of gold at $35.00 and ounce." O.K. The part that is not politically correct and not talked about very loudly or often, In the preceding 2 years or so, the government under Mr. President Frank "called in all the U.S. gold coins" at $20.00 an ounce. You turn in a $20 gold piece and you got a $20 paper bill (or 2 tens or 4 5's, etc.).

Now if you had a gun worth $20 gold ... the "hustlers" who understood would come round and say, "I will be more than happy to buy your gun for $20.00 gold but the government took my gold so I have to give you paper..." And shortly you have $20 in paper but it takes $35 in paper to buy an ounce of gold or the gun back...

Mr. Hitler, in Europe got his financing by stealing from Jews... (and killing many). I suppose this is slightly less brutal but any less crooked???

Learn the game. Study hard and constantly and beware "changes" in the rules. You make your own luck.

Then there are "drips." "Dividend reinvestment ?? shares." You buy shares of big companys from the company with no commissions each month/quarter. Different plans. You have to own one share to qualify for the program. And you can buy odd lots... 5 shares, 10 shares, 12 shares another month... You build a holding in a big name company without a lot of commissions. [DEVERSIFY!!!] Go. Make mistakes. Learn. That is life.

 

[Bill4282]

Buy guns worth more than $1000 each, coat with cosmoline, bury in the backyard in a waterproof case, leave a map for your grandchildren to dig up in 50 years. Make a 20% profit over purchase price. I'd rather buy lottery tickets lol

 

[ball3006]

Over the last 10 years or so, I bought a few C&R guns. I have been selling them over the last couple years and with the money I got, I got a new bass boat......Yep, guns are a good investment....chris3

 

[Tipro]

All I would add to this is say that if you really want to invest in firearms, think of it as a method of diversifying your portfolio. There will always be a demand for quality firearms, but it most likely wont beat the Dow. On the flip side, a firearm is something you can actually hold in your hands and see the value, as opposed to a 1/1,000,000,000 share of McDonald's or Apple.

 

[Willie Sutton]

You need to choose carefully, and there's no magic answer.

Some firearms (the vast majority actually) will never appreciate more than a similar amount invested in <pick almost anything>. Mostly they will lose real value over time.


Even "investment grade" firearms, such as Parker Shotguns, or Pre-64 Winchesters, are essentially flat, appreciation wise. They WERE good investments if they were bought "pre-awareness of their value" but now they are on a plateau and barely keep up with inflation.

The trick to investment is to see a bargain before anyone else does. You need to be leading edge. If it's trendy or already known... you are trailing edge. YOU are making the other guy a buck when you buy, but you're not gonna make squat. Yes there are deals out there: A C&R focused collection is a good way to go. Really, if it's less than 50 years old, it's not an investment, it's just another gun. Short term bubbles like the recent AR-15 bubble are anomolies. You cannot count on them. AR-15's are not an investment. Are G Series FAL's that are on the BATFE list investments? Well... sort of. Their price is already high, what appreciation can you expect?

I have made a substantial paper profit in a few areas: Model 98 Mausers, about 100 examples of about 80 different types. Never paid more than $200 for one, none are worth less than $500 and many are worth over $1000. Good luck duplicating that though, as there are no more barrels of Mausers. There are barrels of Mosin Nagants, but guess what? Mosin Nagants will never be worth $1000... I tripled the value of a lettered, cased, and beautiful 1906 John Wilkes .450 Nitro Express Double Rifle in two years, bought it before renewed interest in John "Pondoro" Taylor drove Wilkes double rifles thru the roof. Try duplicating that though: Can you pick in advance what will appreciate, and are you able to risk $15K? My current new investment? Something that is on custom order now, will be built in very limited quantities, and is expensive enough at $5000 that very few are buying them. After production ends I expect they will triple in ten years. Know what? Figure out what it is and order one. I could probably do better in the stock market, but this is more fun.


The key to firearms as an investment is FUN. If you do your research, buy carefully, and have a sense of humor it can be fun and slightly profitable. For most people it's a losing deal.


Willie

.

 

[Certaindeaf]

Just put it all on black. har