Guns: A Better Buy Than Stocks
Fears of assault-rifle ban send weapon sales soaring.
Forget stocks and bonds, the real money's in guns.
The Wall Street Journal reports artillery enthusiasts are stocking up on guns and ammo, not necessarily ahead of widespread civil unrest resulting from our ongoing economic swoon, but as an investment. These trigger-happy speculators are betting President Obama will institute a ban on assault rifles, which would crimp supply and send prices, well, shooting up.
For it's part, the Obama Administration says it has no plans to enact such legislation and supports the Second Amendment right to bear arms.
During the federal ban on semiautomatic weapons from 1994-2004, prices soared. Recent buying has reached almost a frenzied pitch, creating backlogs for popular models and enabling resellers to list certain guns well above suggested retail prices. AK-47s doubled in price between September 2008 and the end of last year.
Ammo, as well, has become a hot commodity. As one supplier said, "[Ammunition] beats the hell out of money markets and CDs. You can double your investment in ammunition in a year."
Equity investors, too, are betting on Americans arming themselves to the teeth. Smith & Wesson (SWHC), maker of Dirty Harry's weapon of choice -- the .44 Magnum -- has seen its stock jump from around $2 per share to over $6 since Inauguration Day. Still, shares are off around 70% from highs seen as recently as late 2007. Sturm Ruger (RGR), another gun manufacturer, has seen a rise of almost 100% in 2009.
As Minyanville's Kevin Depew is apt to say, "These are heady times we are living in." The Journal running a front-page story on buying guns rather than stocks is indicative of just how strange things have become.
Recent volatility in financial markets is driving Americans to seek alternative ways to protect -- and even grow -- their money. And while we're yet to see widespread construction of bunkers, protective trenches or armed militias patrolling the streets, the country is on edge to an extent not witnessed since September 2001.
I mean, pirates are all over the news for god's sake. Pirates!
The information on this website solely reflects the analysis of or opin=
=3D =3D3D ion about the performance of securities and financial markets by =
the wr=3D iter=3D3D s whose articles appear on the site. The views expresse=
d by the wri=3D ters are=3D3D not necessarily the views of Minyanville Medi=
a, Inc. or members=3D of its man=3D3D agement. Nothing contained on the web=
site is intended to con=3D stitute a recom=3D3D mendation or advice address=
ed to an individual investor =3D or category of inve=3D3D stors to purchase=
, sell or hold any security, or to =3D take any action with re=3D3D spect t=
o the prospective movement of the securit=3D ies markets or to solicit t=3D=
3D he purchase or sale of any security. Any inv=3D estment decisions must b=
e made =3D3D by the reader either individually or in =3D consultation with =
his or her invest=3D3D ment professional. Minyanville write=3D rs and staff=
may trade or hold position=3D3D s in securities that are discuss=3D ed in =
articles appearing on the website. Wr=3D3D iters of articles are requir=3D =
ed to disclose whether they have a position in =3D3D any stock or fund disc=
us=3D sed in an article, but are not permitted to disclos=3D3D e the size o=
r direct=3D ion of the position. Nothing on this website is intende=3D3D d =
to solicit bus=3D iness of any kind for a writer's business or fund. Mi=
ny=3D3D anville mana=3D gement and staff as well as contributing writers wi=
ll not respo=3D3D nd to em=3D ails or other communications requesting inves=
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter