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Is It Too Late to Buy Gun Stocks?

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Gun makers might be near the ceiling, despite lines out the doors of gun shops.

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MINYANVILLE ORIGINAL A spate of high-profile shootings in the US has brought attention to 8,775 annual deaths from gun violence in this country, and bringing Americans to once again revisit the same debates about gun control that flare up each time these awful events happen. Gun enthusiasts' buying behavior after events might seem counterintuitive in situations like this.

Jean Marie Laskas, a writer for GQ, spent some time behind the counter at Sprague's Sports in Yuma, Arizona, to better understand the culture of firearms.

"So how about the Tucson shootings?" I asked our little group, two clerks and four shoppers, all male. "I imagine that was a difficult day around here." I thought it an obvious statement that translated roughly to: Surely Loughner's killing spree must have given you pause and forced you to face the dark side of an America that allows its citizens to own guns. But that's not what anybody heard.

"The lines were out the door."

"Well, not out the door, but I remember this place was packed."

"Not as bad as the day after the election."

This anecdote that Laskas reports rang true across the country. One-day sales of handguns, measured by the FBI's National Instant Criminal Background Check System, or NICS, as a proxy, spiked by 60% in Arizona on the day after the Tucson incident in which a gunman nearly killed Congresswoman Gabrielle Giffords. Sales in unrelated states also rose that day. Ohio gun sales jumped 65%. Sales rose 38% in Illinois and 33% in New York on that day. Nationwide, sales for that one day climbed 5% to 7,906 guns. A similar jump in sales took place after the Aurora theater shootings last month.

Gun sales go up after guns make news in the fashion that they are designed to do so. The spike in sales following high-profile shootings, of which there have been several in the past few weeks, is often attributed to a desire to protect oneself and to arm oneself before it becomes illegal to do so. Despite decades of lax regulation of weapons -- such as the expiration of the Violent Crime Control and Law Enforcement Act of 1994 -- gun owners, more than consumers of most other things, are keenly afraid that law enforcement officials will take their hobby away from them.

The election of a Democratic president has been an enormous windfall to the gun industry. The only gun regulation passed under Barack Obama was the lifting of the ban on carrying concealed weapons in national parks. Despite Obama's non-action on firearms, even in the wake of several mass shootings, gun owners believe that the president is waiting for his second term to show his true colors and confiscate firearms. The president's oft-repeated comments about people "clinging to guns and religion" didn't help his image in the gun community, and the National Rifle Association is fervently spreading this belief among its followers. NRA Executive Vice President Wayne LaPierre called the president's silence a "conspiracy to ensure re-election by lulling gun owners to sleep." Gun owners responded by stocking up.
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No positions in stocks mentioned.
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