investing in firearms

B

bailey bud

New member
Tuesday - I called the broker and said "cash it out."

I got rid of all of my stock and mutual fund holdings - and it's all sitting in a money market.

I decided to consider investing $10,000 (a portion of my portfolio - not all of it) into firearms.

I've been collecting them piecemeal for about 10 years. Most of my purchases were from friends who simply didn't need them anymore. I don't ever recall losing money on a firearm purchase. In fact, I typically clear about 25% using consignment sales through a friendly neighborhood FFL.

I'm not planning to become an FFL - and don't really plan on swapping/selling my firearms. Rather - I'm thinking buy/hold --- and wait for better times. Any subsequent sale will be through a local FFL.

Am I dreaming/fooling myself? Would a firearm collector be walking a legal fine line? (Colorado is fairly gun friendly). My best mutual fund was making 20%. I've been beating that through casual acquisitions for awhile.
 
You're kidding yourself if you believe you'll do better than the markets, by collecting firearms.

First, you'll be in the same waters as the other collectors out there, and no amount of reading will prepare you to collect. I realize that there is no real "beginning", and you'll be jumping into a live market. You will be a greenhorn, no matter how many copies of the SCSW you have, or you can recite R.L. Wilson's books by heart.

You're going to have to determine where and what you want to specialize. Do you want to collect pre-Model number S&W's? Do you want to collect Model 70 Winchesters, or pre-WWII Lugers? The possibilities are rather endless.

I don't know the value of your portfolio, but sinking a piece into firearms should be something you should not expect to expand very quickly. And $10k just isn't a lot of money to start a collection. You could sink that amount into one or two S&W's, and that amount won't cover the down payment of a fine English-made side-by-side shotgun, or a nice speciment in a Colt Model P. Look at the price of any "commemorative", and you'll see that they haven't fared any better than "non-commemoratives".

New guns will depreciate no matter if you never shoot them. As soon as you get it home from the dealer, it's worth maybe 65%-70% of your payment. It will take years to recover, and start to appreciate. Besides, new guns today just don't carry the cachet of the older "blue steel and wood" specimens.

Right now, you have to be in a position to ride out the market dip. The traditional "market down, gold up" is on its head, with both down. That doesn't normally happen, but these aren't "normal" times. You can see today how the market reacted to the Fed's announced policy of keeping Fed rates down. And the bond markets are no better, whether corporate or government. Munis aren't a good idea, because several of the insurance companies have refused to guarantee them.

If you don't like stocks or mutuals, try looking at what are called "EBF", Exchanged-Base Funds.
 
My investment parameters:

- $2500 into a bunch (10) of Mosin Nagants, 3 SKSs, and a Springfield 1903

- $2500 into three (3) handguns:
a 1911 Government,
a (original) Dan Wesson Pistol Pack,
and a FS92

- $5000 into roughly 10 used rifles - averaging $500 each.
Wood stocks only. Quality names (Winchester, Remington, Browning, and Weatherby) - picked up from yard and estate sales - buying them for 75% of book value - generating 33% roi before consignment cost)

The Nagants are the speculative part of the collection.
The hand guns are all old-school. Unlikely to pick them up less than retail.
The rifles would be picked up at auctions, yard sales, and estate sales. I'm really only interested in popular calibers, wood stocks, and guns in very good or better condition.

Yes - I'm familiar with ETFs (GLD is my favorite - but I'd like to do some of my own investing, now)
 
I don't know, every one I know who buys and sells guns are always making a prifit :). Me, I'm the guy who keeps the economy going, I buy high and sell low. Note: these same people I know also win big at the local casinos. (I don't know how the casinos can afford to keep their doors open) If the stock market is not for you right now then I'd look into corporate bonds.
 
wine can be a good investment(usually in lower amounts) because overtime that bottle can become worth thousands more...same fas a rare scotch.

I don't think gun investing is a good idea, and truth be told, I don't even invest in wine. kid gets it, his buddy steals it, it goes bad, you drink it, it breaks, etc.

Keep the minimum in your money market to earn the highest interest. REMEMBER, this amount is usually 1 cent more than the minimum(example: a moneymarket might have one interest which is better than the savings account from $1,000 to $10,000($1,000 being a requirement to have the account opened rather than a low savings acct amount) the highest interest would inturn start at $10,000.01 as an example. This helps and serves as your EMERGENCY family funds too. also, a money market can be attached to your regular account just like your checking: nothing changes...use a federal credit union. save for retirement at least what company matches and save 10-15 percent yourself either way(spouse too//if possible). this will train you to live on a smaller budget. lastly, do not move your money out of the safe funds until at least 2012 or you're in deep trouble. sorry for the rant...trying to help with your firearm investment and hopefully they'll allow post this one time, as trying to help fellow Americans in this time of economic crisis is important.

Remember, if someone steals the guns then your fortune may be gone. It is too dangerous to hoard money for this same reason. Though I admit, it would be nice to stack thousands upon thousands, have a cigar room like sheen, have royalty liquor collection, firearms up the yingyang, etc etc etc etc etc
 
You had a mutual fund returning 20% and you cashed out of it? Good luck matching that with firearms the common man can afford. Oh don't forget this part: if you cashed out a qualified retirement plan you now owe a penalty to obama of the amount cashed out times your tax rate plus 10%. So if your tax rate is 15%, you gave away 25% of your qualified moneys. Best of luck overcoming that, much less making money.
After the overnight sell-off, if it were me I'd consider pouring money into that 20% mutual fund and buy right back in at a lower per share cost than you sold for yesterday. Although doing exactly that goes against the generally favored asset allocation model for investing.
 
If you are smart about investing in firearms, and have some serious funds for this, you can do well over the long term. You need to be looking at the following, if we are talking investment:

1. Fine hand-made o/u shotguns engraved by known master engravers - plan on spending no less than $60,000 a piece on these - probably closer to $100k, and they can go much higher.

2. Machineguns - RR M16's, FNC, AC556, M60, MP5, Tommy Guns, maybe UZI's; they will all go up in value.

3. Certain antique firearms, if you can buy them right: Colt 1st gen SAA's, Nice condition Civil War revolvers, original Henry rifles etc.

4. 99% condition early 60's, late 50's Colt Python

5. The next category is the hardest - new / modern guns. You have to be able to spot the "odd ball" gun that isn't going to be made for very long, decent quality, but either becomes too expensive to make or stopped because of some regulation: See: GRAD Knife gun, Braverman pen guns, open bolt semi-autos, HK P7M13, HAC-7, etc. You sort of get the idea - these values will fluctuate up and down - not real predictable.
 
The way I see it, you may do ok by buying as many of the sub $100 Mosins as possible. If their trend goes the same as other milsurplus rifles, in 10 years they could be worth 2x or better. Still a risk. Just my thoughts.
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You're kidding yourself if you believe you'll do better than the markets, by collecting firearms.
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I don't get this at all. If you had invested $100,000 12 years ago in an index fund, you would now have about $100,000. The stock market is no longer the safe 5-7% that it used to be. And IMO.... the worst isn't here yet. It's going to be a very long time before it becomes a reliable long term investment vehicle again. If it ever does. And the 10 year bond is down to 1.6xx% this morning. Would you really give your money to somebody for 1.6% interest? The smallest amount of inflation would result in you getting a negative return!

New guns will depreciate no matter if you never shoot them. As soon as you get it home from the dealer, it's worth maybe 65%-70% of your payment. It will take years to recover, and start to appreciate. Besides, new guns today just don't carry the cachet of the older "blue steel and wood" specimens.
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In the first place, would you really invest $10k in a "gun collection" by running out and buying new guns? Sure, if you just go buy some generic deer rifles or CCW handguns, you are going to face immediate depreciation. But who would buy generic utility guns for a collection? I filled out all the guns I "really need" many years ago.

I only buy really desirable guns now. Somebody offers me a good deal on a S&W M57 no dash in nickel and in nearly perfect condition, I take it. They offer me a 1971 Ruger OM Blackhawk in .30 Carbine in 98% condition, I take it. The guns don't have to be pristine Lugers or Winchesters or Colts. They just need to be high condition examples of desirable guns. I buy them, I clean them, I admire them. I shoot them at my home range but most of the time probably only a couple times of year. Take each gun out when a gun friend comes to visit so that we can admire them together. Take the opportunity to spray and wipe down then as well. The years go by, the stock market fluctuates all over the place, I enjoy my guns every day, and their value just slowly goes up. When I die, my heirs can keep them or they can sell them for a lot more than I paid for them. IMO, that's an investment I can get behind.

Gregg
 
a) firearms are not the only thing I invest in. I have ETFs, oriental rugs, and a few other things that interest me.

I bought my most recent fund in January, 2009. It's done fine - but the cycle is over, for now. While Tuesday was 8 percent off the year's high, it was well above the week's low.

b) I simply think I can beat the market with firearms. I've purchased a few of them over the past few years. All of them were used, and all of them were bought at good prices (two dealer bought - the rest dug up in yard/estate sales).

c) I have a strong dislike of alcohol - so wine collecting is out.

I just finished looking through a Rock Island Auction catalog. Man - most of that stuff goes for premium prices. Skeptical I could make a return with those guns. Has anyone been successful there?
 
The way I see it, you may do ok by buying as many of the sub $100 Mosins as possible. If their trend goes the same as other milsurplus rifles, in 10 years they could be worth 2x or better. Still a risk. Just my thoughts.
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I was going to bring up the military surplus route also. Since I've been collecting C&R rifles and guns, they've all gone up in price except the Mosin Nagant 91/30, but it hasn't gone down either. The M44s and M38s aren't readily available anymore and have gone up about 200% since I got them 4 or 5 years ago. Even the Nagant pistol is about twice what I paid for it now. I think there's a trend in the milsurp C&A market in that they run out and then go up in price. Today's C&A guns that are readily available are the Tokarevs, P64s (a great little conceal carry gun), and still the M91/30 rifle. There are a few more bargains as well. These guns do not go down in price once you buy them, and they go up over time. You can buy a pile of them with $10K today.
 
It's an investment when....

It has an appreciable ROI, it pays a regular dividend, it represents a capital gain that exceeds the current bond market ROI dividend or it's traded commodity. Otherwise, it's just something you bought. However, my Wife has played the "but honey, jewelry's an investment" card and I've caved. Bottom line, buy whatever the hell you want, it's still a free country. It is isn't it? I kind of thought it was anyway.:cool:

I can never get the investment gambit to work for me.:confused:
 
I just finished looking through a Rock Island Auction catalog. Man - most of that stuff goes for premium prices. Skeptical I could make a return with those guns. Has anyone been successful there?
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You will find some of the most desirable guns at the Rock Island Auction. Lately, I've seen folks paying ridiculous prices at the auction. Don't get me wrong - it's a very well run auction - it's just that you have a lot of really wealthy folks who want what they want and they will pay whatever it takes to get it. I've seen things sell at that auction for up to 2 times what you could find it elsewhere if you looked.....not everything is like that, but that auction brings top dollar.

In fact, I think I'll just leave instructions in my Will for my wife or kids to sell whatever they don't want at the RI auction.
 
It's an investment when....
It has an appreciable ROI, it pays a regular dividend, it represents a capital gain that exceeds the current bond market ROI dividend or it's traded commodity.
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I disagree. People invest in all sorts of things. Many of us invest in our own businesses, which do not meet any of your listed criteria. Guns, antiques, art, coins, rare stones - all have been used as investments quite successfully.
 
Market is at a low, I have been increasing my portfollio as much as I can, think of it as a sale. I dont plan on retiring for 30-40 years, I assume sometime within the next half century the market will return.

If you are going to cash out, the only physical investment that I would even consider is silver or gold. Of the two silver has more promise. Not to mention you can sell it in a heartbeat to pretty much anyone.
 
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