April 17, 2020
By Brad Fitzpatrick
Saint Patrick’s Day 2020 wasn’t a joyous holiday for investors. The Coronavirus pandemic and the resulting worldwide shutdown caused global markets to shudder. People watched in anguish as their retirement portfolios were swallowed. Anyone heavily invested in stocks felt more blue than green on March 17th.
While most stocks were tanking hard, there were a few notable exceptions to that financial doom day: firearm-industry stocks began to rise. The reason is no mystery; in time of national crisis, many Americans decide to prepare for their own security and buy guns and ammunition. Ammo sales exploded, which meant there would be an uptick in stock prices the next day.
Ruger (RGR) was trading at $41.32 on March 10th. On March 17th, Ruger was at $46.60. By March 30th, it was selling $50.29 a share, an increase of roughly 20 percent over three very rough weeks on Wall Street.
Vista Outdoors (VSTO) owns Federal Ammunition and several outdoor companies. Vista’s stock jumped from $4.80 on March 11th to $8.12 on March 17th. As of April 9, 2020, Vista was trading at $8.98, about a dollar and a half below its 52-week high.
American Outdoor Brands (AOBC) owns Smith & Wesson and Thompson/Center. AOBC jumped $2.00 from March 11 to March 17.
If those are the only three stocks you owned on Saint Patrick’s your investments wouldn’t have fared bad. You’d certainly be seeing more of a return than most people.
We often think about firearms as tools of defense or recreational, but many don’t realize the companies can be sound investments. Stocks are the most straight-forward way to invest because they offer buyers the opportunity to see a quick return, and you can choose to sell off at any time.
Many of us are not invested in the stock market beyond their 401(k) retirement plans, but history indicates that there’s nothing wrong with buying stocks like Ruger, Vista Outdoors, and American Outdoor Brands because you like to shoot, support our industry while hoping to make a little profit. As any stock guru will tell you, the trick is recognizing the right time to buy.
I’m not making a living solely off of trading stocks, so I won’t pretend to be an expert. I do watch the market and try to stay abreast of what’s happening. I know that if I leave my money with a solid company, I’ll see a profit over time. It may never amount to enough to afford a new house, but the net earnings may justify the purchase of a new gun. As a matter of fact, that’s the perfect way to reward yourself for a bit of savvy trading.
Buying Guns as Investments
Stocks aren’t the only way to make a profit in the firearms industry. Buying guns to sell them in the future can be a profitable way to cash in. However, purchasing guns as an investment rarely offers a quick turnaround for profit. They are an investment, and they are a far better one than many other items you may already purchase with the same mindset.
Consider that in 1959 a new Smith & Wesson Model 41 sold for $100, less if purchased privately. If you spent $100 on a Model 41 some 60 years ago and cared for it properly, according to the Blue Book of Gun Values, it could be worth more than $1,000 today. Adjusting for inflation, that $100 you spent in 1959 is worth $888 today; the Model 41 was a good investment. What’s more, you have had the pleasure of owning and shooting that pistol through the last 60 years. Six decades is a long time to wait for a return to mature, but it is better if you spent some of it at the range.
What guns will hold their value in 10, 20 or 30 years? It’s hard to predict which guns will explode in popularity the way the Colt Python did during this last decade, but if you understand the basic principles of what makes a gun valuable, you can invest wisely now. The more you study the history and learn to distinguish between rare and common models, the better prepared you will be.
Auction sites such as www.gunbroker.com can offer some insight into which guns may result in a profit. While staying at home during the Coronavirus pandemic, I’ve had time to review auction prices of multiple guns. I’ve also developed an average based on each model during the last 10 auctions. Accounting for inflation, I’ve determined which guns may offer a profitable return. I managed to make a list of the critical driving forces that influence long-term gun values. It is not a perfect list, but the following criteria seem to be most important when purchasing an investment gun.
How many Browning Buck Mark stickers have you seen in windows on vehicles during the last decade? How many people watched Clint Eastwood describe the .44 Magnum in the famous bank robbery scene in “Dirty Harry”? Does someone have to remind you that it was a Smith & Wesson Model 29?
Brand loyalty drives pricing. The key is to predict which firearm brands will be most in-demand with buyers of the future. Sometimes even a less desirable gun model can net you a profit if the right brand name is stamped on the barrel. Pre-’64 Winchester firearms and Colts, for example, are rarely a poor long-term investment even though every model wasn’t legendary.
This is a big one influencer. The 1950s and ’60s TV Westerns made every kid and young man want a Colt Single Action Army (SAA) revolver. Fans of Tom Selleck’s character in “Magnum P.I.” (1980-1988) probably own at least one 1911. (Those that grew up and became successful also bought a Hawaiian shirt, are somewhat of a Detroit Tiger fan, and pushed up values of the Ferrari 308.) Many of us also enjoyed watching Selleck’s “Matthew Quigley” character shoot a wooden bucket at long range with a Sharps rifle, or James Stewart put a hole in a coin in “Winchester ’73” (1950).
Readers of Robert Ruark and Ernest Hemingway pursue exclusive Rigby rifles and Westley Richards guns. The point is, if you can predict what memories shooters will cherish, you can make money. How many of our dads owned a Winchester Model 12, a Savage 99 or a Remington Nylon 66?
Quality isn’t always enough. If there is a perception that a gun is good, it’s worth a lot more than one with a poor reputation, even if it isn’t true. Some guns have well-deserved reputations for reliability. The Glock 17, 19 and 22 models are known to work just about any conditions. Thoughts of a Benelli semiauto shotguns come to mind when some of us consider thousands of shells fired over an Argentina dove field. Both Glock and Benelli produce reliable guns, and the brand benefits.
If you don’t know that taking care of a firearm is critical for seeing a return on your investment, then perhaps you should stick to buying scratch-offs. All it takes is one afternoon to clean your firearm after a trip to the range or field. A gun is only an investment if it’s properly cared for. To add, guns that retain original sales receipts, boxes, paperwork and accoutrements, bring more money in the future. If you expect the maximum return, it’s best that you don’t shoot the gun or manipulate its action beyond ensuring its safety. The more disciplined you can be with an investment firearm, the greater the return.
Desirability & Exclusivity
Exclusivity is easy to measure. If Ruger only makes five purple-and-orange 10/22 rifles, then they’ll be hard to find later, but rarity doesn’t always mean that a gun is going to be desired by collectors in the future. For that savvy investor, a gun that is both desirable and exclusive is the money maker.
Though marketed as exclusives, Colt and Winchester Commemoratives were produced in great quantities through the 1960s, ’70s, ’80s and ’90s. So many were made that Commemoratives became bargain shooters because they’d hold their value worse than a more basic model in a classic configuration. However, so many owners gave up on expecting a return on their investments that the Commemorative market is making a turn and becoming sought after once again as the price of vintage originals have disappeared from the market.
If you happen to find a Colt engraved by Tiffany & Company, you’ve found a gun that’s both desirable and exclusive to two different collecting markets. The same reigns true for guns such as an International Harvester-manufactured M1 Garand. These Garand rifles appeal to both firearm collectors and those who collect tractors or farm implements.
With the surplus market drying up, the prices of former military issue firearms from anywhere around the world are on the rise, meaning that they are pushing up the value of more common-issued military surplus as a consequence. Any one of the millions of firearms, in working condition, that was used between the Civil War and World War I, during World War II and Korea are safe investments. Increasingly, opportunities to purchase military or police surplus are becoming few. Interest in Vietnam-era firearms indicate that they will become the next future collectible, especially as awareness is taught through the sale of reproductions. After that, it’s only a matter of time before more modern rifles, pistols and shotguns join the collector’s market in a significant way.
Some of the best investments remain to be seen. If you can scoop up a collectible gun, care for it and hold onto it long enough, it’s sure to bring you pleasure while contributing to your overall wealth.
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