Divesting Gun Companies

Jacob notes that one of the Mayoral candidates for New York City is bragging about getting financial companies to divest from gun companies. I agree with Jacob that there could be other reasons. I would not be confident investing in firearms companies over the long term myself because there’s just so much I don’t know. While I agree that the market for shooting products is expanding, the big question in my mind is how much of it is permanent. Even though we all agree the number of new shooters is growing, is it growing fast enough to deal with the secondary market getting flooded once Obama is out of office, and hoarders start to divest inventory. Is it growing fast enough to deal baby boomers dying off and their collections hitting the market?

12 thoughts on “Divesting Gun Companies”

  1. I am with you. My idea of “investing in firearms” is to buy a really nice Beretta O/U (aka, the ‘Silver Biden’) with the knowledge that if I ever need the cash, I can sell it for near what I paid for it.

  2. The short answer is YES. Gun manufactures are a good short and long term investment. Those who die off, the heirs will not sell them due to the bonus of having an non-papered weapon.

    Plus the recent new gun owners should have learned that never get cocky . The gun banners are always with us

  3. I’m with RAH, sure the govt can ASSUME that one of the relatives will get some or all of my guns when I die, but they will never know for sure who or what.

    That’s got to be as good a reason to hang on to grandpappy’s gun you inherited instead of selling it as there is.
    And the older it gets the more it’s gonna be worth.
    This is also probably why you don’t see firearms in estate sales very often, at least one family member knew their real worth!

  4. As far as inheriting guns, in many cases the guns involved were acquired by the estate long before paper on guns was so ubiquitous, so it will always remain ambiguous how or when their ownership was last transferred. It should stay that way.

    Probably the majority of my guns have been in the family sixty years or more. They may not have great economic value, but I don’t care about that. What I care about is that they don’t officially exist.

    Regarding investments in general, from an old geezer’s perspective: A lifetime is a long time, even if it doesn’t seem that way. Things will change. Most of your economics gurus will prove to be all wet. E.g., I was talked into being a small-scale gold bug c. 1979 – 1980, and in terms of dollar values and inflation, even at the recent peak commodity values, a passbook savings account would have been a better investment than mine turned out to be. Economic principles may “have to” prevail, “someday,” but no one can guarantee when, and “someday” is not a useful unit for prediction.

    1. Sure your guns exist. “Comrade, if you don’t have any guns then why did you buy ammunition with a credit card? Or a check? Or cash? The distributor records show it was shipped. Or were you supplying terrorists?”

      1. I am still using some components I bought almost a decade before I had a checking account, much less a credit card! One of the best ways to hide from 2013 is to live in 1953.

        But, there is no doubt most of us have laid down a hard trail of being gun owners, so none of that makes any difference. I am more interested in the guns themselves remaining clean and transferable, to people of my choice, not the government’s choice. Or, even if, despite my best efforts at security, they are stolen from me and turn up at a crime scene somewhere, that I don’t have to answer for them. (Someday I’ll tell the story of a cop purchasing some “drop guns.”)

  5. Pre 1969 guns are all over in homes and will never get in the hands of a FFL so the Federal or State governments will have no idea where they are or how many.

    Many WWII vets kept their firearms and those went their children.

  6. It’s a crowded market and it’s not hard for new blood to enter the game. Machine shops are making ARs and now even pistols. They may not always be the best, but some are pretty good.

    With all the competition, and the fact that entry cost has dropped significantly, it is tough to be a gun company selling the same old thing every day. The smart ones are creating new product that they can stake their logos on (and that are patented and/or copyrighted in look). Even the big-name mainstays are selling many versions of the same old pistol just to get some increased market share (Sig P238 has something like 20 models of the same gun). Hell, even Glock is pushing multicolor guns into commercial channels.

    Investing in guns might be smart, but investing in gun companies (the public ones, at least) might be a little iffy over the long run.

    There might be one reason why gunnies should invest in a public gun company: a larger base of shareholders makes price fluctuations more reasonable. Disney stock certificates were marketed for many years as collectors items (they had awesome drawings on them) and people would buy just one share as a paper certificate and give it to the grandkid. Back a few years ago, some absurd percentage of shareholders were single-stock holders who had the physical certificate. Paper doesn’t trade easy at the brokerage, so basically they were “locked up” shares that never voted and never traded. Not sure if this is still a big part of their ownership or not, but it’s a cool idea.

    Maybe if enough gun owners buy a share of the company, then it’s going to be able to weather some of the market ups and downs better than not. It won’t change the company value, but it might keep some of the rough edges off.

    Not even sure it’s practical to do it anymore – paper shares and all – but I would totally buy a stock certificate from one of the public firms if it had an engraved image of something cool.

    1. And it gives you access to shareholder meetings; if enough gunnies own the stock they can vote as a block to stop some anti shenanigans.

  7. I own a small chunk of S&W, Olin, and Ruger. They have done well for me over the short term. I’ll most likely hold on to them even if they don’t do as well in the future.

    I prefer to put my money on companies I believe in, not just to make money although that is a consideration.

  8. Most of us have invested in guns and their value has risen significantly. I have been short of money these last few years so can not afford to buy new. However despite the value of my current ones I have refused to sell. I could not afford to buy them back.

    I would invest in Ruger, Beretta and Magpul . However I don’t have the funds . They should be good for medium term investments and would be easy to sell if this rush slows down.

    1. One thing I’ll throw in, though, is that just like other “collectibles,” guns are relatively illiquid at their full retail value. Often a lot of work is necessary to put them together with someone willing to pay their full retail price.

      Most of the people I’ve known who were not gun hobbyists themselves, and have been faced with disposing of a parent or relative’s modest gun collection in their estate, have resorted to taking them to a dealer, who either purchased them outright for cents on the dollar, or, in the best scenarios, sold them on consignment. But in neither case did the people get the full retail value.

      I experienced that with my parents’ estate — not with guns, but with a variety of odds and ends of collectibles they had accumulated over almost 70 years of marriage. Under the desire to just wrap things up, I put easily $2,000 – $3000 worth of items the “American Pickers” would have drooled over out on the curb for people just to pick up if they wanted them. It was not worth my time to work at putting odds and ends together with people who would be willing to pay their full value.

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