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Guns: A better buy than stocks

Posted Apr 16 2009, 12:20 PM by Minyanville
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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!

Top Stocks blogging partner Todd Harrison is founder & CEO of Minyanville.com. This post was written by Minyanville Contributor Andrew Jeffery.

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Comments

 

oh rahh let the revolution begin,

"the country is on edge to an extent not witnessed since September 2001." Only for dummies that buy into faux Fox-news outrage. Todd Harrison=The Rick Santelli of Top Stocks.

Most military type weapons are less powerful than the average hunting rifle.  Don't believe the media hype!

Do your own research and make up your own mind.  Protect your 2nd amenment rights and join the NRA.

There's a more insidious reason why guns and ammo are being stockpiled.  The same thing happened during the Boston tea party, just ask the oppressive regime back then how well things worked out for them.

ANY REVOLUTION TALKING MORONS SHOULD BE KICKED OUT AND SENT TO IRAQ!!!!!! MAYBE THEN YOU COULD APPRECIATE WHAT YOU HAVE

What do we want to bet that the author, Mr Harrison, does not own or work a ranch, grow or can his own food, lives in a city, never wore a uniform (police, fire or military), never hunted and finds the pledge of allegiance offensive. I swear, I am tired of people who choose lifestyles different from mine ranting about how I am a "Militia Crazy" because of my lifestyle choices. Hey Buddy! This is America. My gun totin' behind bled quite a bit (3 purples and a bronzie) so that you could speak and act freely. Too bad you do not give the same respect to me. You are a spoiled little boy, sheltered your entire life by the rough men ready to do violence on your behalf- the very persons you disdain. The least you could do is show some respect for the men and women who have gone into harm's way so that your manicured/coifed self could practice free speech. BTW- I predicted this trend after Obimbo was elected and have made a killing (pun intended) with my holdings in Ruger, S$W, Colt and FN. Rich and well armed is a good combo. Molon Labe!

I won't speculate too much, but I will note that the buying spree makes sense, in view of the anti-gun agenda of the Democratic Party (yes, Mr. Obama took to heart Al Gore's lament that the NRA cost him the election of 2000, but it doesn't change the leopard's spots...).  Example: The Ruger 10/22 is the most popular rifle out there.  It shoots a small, low power load suitable for plinking and very small game.  However, it avails itself of a lot of after-market accessories, incl. such things as extended "banana clips", redolent of such military rifles as the AK-47.  Because the anti-gunners are impressed with things like "banana clips" and bayonet lugs, those got banned during the Clinton years, even for 10/22's.   End result?  A used, plastic 30 round magazine for a 10/22, which sold new for $9.95 pre-ban, went up to as much as $180 each during the ban (it then dropped, post-ban, to $9.95 and is now back up to as much as $29.95, post-election).  Show me a stock which promises anywhere from a 300% to 1,800% return on investment.  THAT is why folks are buying this stuff.

"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." People believe this drivel.  The adminsatration might not because it doesn't have the courage, but it can prod the minions in the house and senate. Then he would be forced to sign such legislation.

I take offense at the quips....'trigger happy', etc.   I live in MA where single action  Colt Cowboy style guns are outlawed because they won't pass a 'mandated safety inspection' along with a large fee for the test to be taken. This, to outlaw a type of 'shooting iron' that is used ONLY in Cowboy shooting events, and is legal everywhere else.  It was mandated by one of our politicians because he wanted a 'gun control' platform to run on and this is a small group of shooters and the firearms in question are a small portion of the issue. Big splash and small backlash.

The fact that the single action pistol has never been used in a crime in MA was not worth mentioning.   YES, the shooting public has been 'tagged', and we're buying up what we can , right now, because unrealistic, politically motivated controls are in the future.    

I think you meant "forced" to sign (in quotes for a reason), Lt. Col. Stan...

In fact, there are already a number of draconian anti-gun laws pending in the Congress.  Of course gun owners weren't fooled by the campaign promises, anymore than they believed John Kerry liked to wear camo and slog through marshlands with a shotgun.

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