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Firearms as investments

Discussion in 'Firearms Chat' started by ithrowicecubes, Jan 15, 2021.

  1. HoLeChit

    HoLeChit Semper Fidelis

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    I think buying firearms as an investment isn’t a bad idea. They all go up over time. Trying to predict what’s gonna be worth a bunch is a bit of a crapshoot. Buying a bunch of AR’s can go to hell in a hand basket real quick if they’re outlawed and nobody wants to buy them. Lever guns might turn into the next assault rifle for people under such policies, as they were 120 years ago, which means lever guns could get crazy expensive. Same thing could go with revolvers and semi autos. But with all that considered, gun companies will adapt to build/sell whatever they legally can, so you should count on that competition. It’s a bit of a zero sum/can’t win kinda game, with honestly really crappy returns. Investing into other vehicles such as mutual funds or dividends can be much more fruitful. I don’t know of a single firearm that I can buy right now that will be almost guaranteed worth 10% more next year, but if you can keep up with the average of the S&P500 you’re practically guaranteed to average better than 13% each and every year. Which isn’t hard to do. Being aggressive with things averages me a 20%+ return each year. 2020 I averaged a 34.36% return plus 4ish% dividends. The year before was 27% plus 4ish% dividends.
     
    Last edited: Jan 21, 2021
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  2. Bchance

    Bchance Marksman

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    Maybe you should start a new thread of what you're trading in. :blush:
     
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  3. SMS

    SMS Sharpshooter

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    I disagree. "Past performance is not indicative of future results" comes to mind.

    There is no guarantee that any future bans will not be retroactive or include bans on transfer of currently owned items.

    The regulation and legislative risks involved make speculating in firearms as an investment far riskier, with less potential for return, than more traditional investments.
     
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  4. HoLeChit

    HoLeChit Semper Fidelis

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    I don’t have enough to say about it to start a whole thread honestly. Half of my gains have been my small/medium cap funds that my 401k is invested in, the other half is making some smart/super ballsy moves over the year. I saw hertz file for bankruptcy, bought right around $.50 per share, flipped it for $2.37/share a day or two later. Or something around there. Watching Robinhood and Reddit told me that all these budding new “day traders” would buy off brand recognition and pump the price. Luckily for me, I predicted right. Otherwise, I tend to invest most of my portfolio in “dividend aristocrats”. Companies that pay dividends, and have a proven 25+ year record of doing so.
     
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  5. zghorner

    zghorner Sharpshooter

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    Legality wise I have to agree...if the suits can prove you are purchasing firearms for the sole reason of resale/profit you can get your cookie dough stuffed in a big way. And this is the major issue with using firearms as an investment vehicle...To do it on a large enough scale to actually make real money you MUST have an FFL...And at that point it becomes a job, not an investment. The fees/taxes/business expenses eats up enough of the profits to make other investments more attractive.

    As far as future bans being more or less permanent and requiring a tax stamp...
    (1) If the newly classified NFA items are treated like suppressors where they are still able to be manufactured and sold to the public with a tax stamp and registration...then I can see where you are coming from.
    (2) if they are treated like machine guns where they are no longer able to be sold to the public and what is in circulation at current is all that will be allowed...the value of all of those items (which are registered legally) will increase dramatically overnight. I dont see how eliminating all future supply would do anything but cause the price to go up in a big way.

    BUT, if one were to risk it...Making money on firearms is easier than pretty much any other investment if you factor in (1) likelihood of appreciation, and (2) ROIC. with (1) being the big one honestly guns just do not really drop in value very often...we are obviously in a newb fueled price bubble at the moment but taking a step back...the price of this stuff has been steadily increasing since forever making them a VERY safe place to store value. If people are looking for some long term ways to fight inflation, then purchasing X number of firearms per year of quality companies is not a bad idea at all and very little risk of legal issues if playing the long game. Its the flippers who are moving hundreds of guns a year that are at risk of getting screwed by the long d**k of the law.
     
  6. SMS

    SMS Sharpshooter

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    All true, but most commonly available guns don't grow in value over time either. Yes, there are bubbles that one can take advantage of, but predicting those bubbles and the timing of them is tough.

    The other legislative option is outright ban and subsequent order for either turn in or destruction akin to what they did with bump stocks. Imagine your whole investment of AR-15s being made valueless by an AWB that bans ownership and transfer? We used say that was impossible, but we've been inching closer and closer to it...

    I see some of my collection as more of an insurance policy or alternative savings bank than I see it as an investment because, like you said, they rarely loose much value when well cared for. If times get hard, or opportunity presents, they are a great way to free up assets.

    I did it a few years ago when our oldest kid needed a new musical instrument to take his skill to the next level...we didn't have much free cash at the time so I liquidated a safe queen M1A Scout for pretty much what I paid for it many years before.

    Turned that safe queen into a new instrument, which then translated into a full four year scholarship plus annual cash, and helped my kid pursue his dream. That's an investment! LOL.
     
    Last edited: Jan 22, 2021
  7. zghorner

    zghorner Sharpshooter

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    I think if it gets to the point where the federal government is forcing us to hand over semi auto rifles and high capacity magazines...investments wont matter much lol.
     
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  8. HoLeChit

    HoLeChit Semper Fidelis

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    ^^^^ He’s got a point.
     
  9. OKCShooter

    OKCShooter Sharpshooter

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    What are the legal ramifications of publicly stating that you are flipping guns and that you’ve been doing it for years?
     
  10. magna19

    magna19 Sharpshooter

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    The highly crafted wood and blued guns from old have skyrocketed from what I see.
     
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