One day, machine guns will be unavailable

[Machineguntony]

Ok guys, discussion time. The NFA forum, which is my favorite forum, btw, is a bit slow. So let's spice it up with some debate and thoughts.

I love NfA toys! Semi autos are so boring!

So I was watching Morgan Spurlocks 'Inside Man', and I was talking to this guy who is buying up NFA machine guns. It was a business that owned the machine guns that he shot on that show.

I'll say that I am doing very well, but I'm not a billionaire, but I can still afford to buy quite a few of machine guns. This guy is close to a billionaire and he buys a new Ferrari every two years (lamborghini there's a wait list). He buys NFA guns like candy. I'm sure he isn't the only wealthy guy doing this.

When we talk NFA he says, '$30,000 for a machine gun? That's cheap!'.

We're talking from the viewpoint of a business owner to whose $30,000 for a RARE gun is nothing (when only about 100,000 machine gun, and they can never make more transferable MGs, that's the definition of rare).

Here is my point, to a business, especially when the cost can be written off bc the gun is purchased as part of a legitimately operating LLC or corporation, $30,000 is not much. And there are lots of businesses that can easily make those purchases.

And then I hear about guys paying $400,000 at auction for a Winchester 1of1000. There are lots of people with money.

All this means that one day machine guns like an m16a2 will be worth way more than $30,000, as they will all the in the hands of businesses or very wealthy collectors. Even to the average joe who owns a machine gun that he paid $500 for prior to the '86 ban, eventually, he will die (or need the money), and his heirs will sell the gun because the gun will be worth too much.

I agree that machine guns will one day be a rich mans hobby, if it isn't already. One day, it will be near impossible to buy one.

What are your thoughts?

 

[JohnKSa]

There are lots of people with money.

Some years ago I made the acquaintance of a man who buys "as is" houses, cleans them up and then resells them as a business.

His primary rule when purchasing a house was to insure that it would sell, after rennovation, for a price that was below a certain threshold he had calculated by watching the market. At the time, his threshold was $80K. The rationale was that if he went over that mark, it became more difficult (and took longer) to sell the houses because the potential number of buyers was reduced too much. In other words, the house might be worth more, but that additional worth actually made it harder to sell because there were too few potential buyers to allow a reasonably rapid and easy sale.

Same thing applies here, but to a much larger extent. Sure, there are people out there with enough money so that buying a machinegun for the price of a new car or another house isn't an issue for them, but the higher the price gets, the more the number of potential buyers shrinks. That means, ultimately, that selling becomes more and more difficult as the price goes up.

At some extreme point, when your M16 is "worth" eleventy-one billion and the 3 buyers out there who can actually afford to pay that much for a toy already have 235 M16s each and don't want any more then there's a dilemma. You're either stuck with your eleventy-one billion dollar gun, or you can decide it's REALLY worth a lot less than eleventy-one billion, thus increasing the number of buyers to the level at which a sale is possible.

 

[johnwilliamson062]

What JohnKSA said, except I will make it simpler.

The market hasn't changed since 1986. All the forces you mention were in it since then. The market has adjusted already.

THe real problem is that of the 100,000 or so MGs(so you said) a number have kabooms, wear out, etc every year. With absolutely no way to make more the supply is continuously decreasing.

 

[Machineguntony]

Very good points, for sure.

But the market has changed significantly since 1986. The supply has shrunk and the prices are way higher.

As for the guns, I was told that a receiver part, which is the MG, can last forever is cared for properly.

As to the 100,000 number, that is only an estimate that I got from different forums. Estimates run from 100,000 low to a high of 250,000. Even at 250,000 that's still rare. I think only the ATF knows the actual numbers.

I'm surprised no one has made a FOIA request to find out how many transferrable MGs are in the ATF database.

 

[allaroundhunter]

And what happens if the registry reopens, or even if the registry is completely removed and FA guns are treated more like suppressors?

Then your $30,000 gun just became a whole lot less valuable.... Overnight.

 

[Machineguntony]

The machine gun registry will reopen when...

1. The groups like the Brady Campaign to Prevent Gun Violence go out of business.

2. Politicians like Feinstein, Schumer, and Bloomberg become NRA members, or they stop being elected.

3. California and NY vote red and become pro-gun states.

In other words, this will happen sometime around next year. In which case, yes, current registry MGs will be worthless.

 

[Skans]

I agree that machine guns will one day be a rich mans hobby, if it isn't already. One day, it will be near impossible to buy one.

What are your thoughts?

It became a rich man's hobby when I stopped letting friends shoot my AC556. I paid $2,400 for it and never really wanted it to appreciate in value. I bought it because I always wanted a machine gun and could afford it. I had fun shooting it for a few years. Then the value doubled and tripled. Now I see signs that the AC556 will soon be in the 10K range. My only regrets are 1) that I didn't buy the UZI too....and 2) that the AC556 has gone up in value to where I actually have consider whether to shoot it or not.

 

[Skans]

The market hasn't changed since 1986. All the forces you mention were in it since then. The market has adjusted already.

Actually, the market changed dramatically several years ago. Trusts. Before people used trusts to get around the CLEO sign-off they had to set up LLC's or Corporations. This wasn't that big of a problem because a lot more CLEO's would sign off 20 years ago. With use of Trusts, almost anyone can own a machine gun, I think with the exception of folks living in Illinois. The use of trusts has really expanded the NFA market.

 

[44 AMP]

I agree that machine guns will one day be a rich mans hobby, if it isn't already

And wasn't that the whole point of the NFA 34?

the 1986 Hughes amendment just put the cork in the bottleneck, so to speak.

A new Tommygun sold for about $125 at one time, and was one of the most expensive guns on the market (one reason they didn't sell many). Especially in a time when someone earning $20 a week was considered to be fairly well off (not rich, but above average working wage).

Now add a $200 tax on the gun, each time it changes hands. Forget for a moment about all the additional costs (in money or time) of the paperwork, investigations, signoffs, etc. Just the tax alone meant that very quickly, only the wealthier segments of population would be able to afford ownership.

I believe the whole point of the law(besides providing employment for Federal agents who found themselves without a function after the repeal of Prohibition) was to make the guns as expensive and burdensome to own as possible, while still leaving a legal pathway ("loophole") to ownership.

Other than the GIs who picked up and brought home captured enemy weapons, owning machineguns has always been a rich man's hobby. Once upon a time, those simply fairly well off could manage it, but today, with legal full autos selling for whatever the market will bear (+$200 every time), AND with our dollar worth only slightly more than the paper its printed on, its a rich man's game, more so than ever in the past.

And that's what they want. They couldn't get the votes to take them away, but they could get them made as rare and expensive as humanly possible.

And remember, all it takes are a few strokes of a politician's pen, and that legal machinegun that is worth as much on the market as a new luxury car today, can become virtually worthless overnight. Either way. If we could get the registry reopened, the value of currently registered guns would plummet. And if they become banned (or more likely, future transfers forbidden, or restricted to only licensed collectors and police/govt) the value of them could drop to virtually nothing as well.

 

[Beretta686]

I've been playing the NFA game for a few years and had just a MAC-10 for a while.

But watching the way they keep going up and up brought me into the "investment" aspect. As a happily-single-with-no-kids Army Officer with disposable income, my money guy does wonders for me and I've done pretty well in the market, but that money is just sitting there growing, yet isn't really providing me any enjoyment. So I pulled out a hefty sum and bought some more MGs, figuring they're inevitably going to go up in value, faster than the stock market, and in the meantime I have something totally awesome to play with and be the coolest kid at the range.

Sure it's a relatively risky investment, but if for some reason they plummet in value, it's not going to kill my retirement fund and I'm willing to accept the risk.

Now if they'd just transfer to me, so I can hug them as I go to sleep at night.....

 

[TXAZ]

To put some spin on MGTony's perspective, I can go to China (and several other countries closer to home) and shoot MG's at a very minimal cost, and in a few foreign lands can own (usually with connections) for significantly less than than the price of one here. (while living in the Middle East, we could have legally acquired Full auto AK's for a few $100's each)

Since I don't see using an MG for hunting or home defense, and only get that itch infrequently, liking to travel and taking a vacation where we can also 'go blasting' has a distinct appeal.

The MG market is seriously unlike other domestic markets: A slight change in public policy could swing prices by a factor of 10, up or down. A major policy change in housing, transit et al, MIGHT swing a market 10-20%. I think you could make case that long term it's more a gamble than investment.