Ammunition as an investment?

[kingpin008]

I'm wondering, how many of you have stores of ammo that you keep as sort of an investment. I read stories all the time about how ammo in general has gone way up in price in recent years, and how certain calibers that were previously plentiful in Milsurp form (5.56, .308, etc) have become not only scarce, but much more expensive.

This has me thinking - I currently shoot three calibers - .45 ACP, .38 Special, and .22LR. I have no real interest or ability to get into rifle calibers at the current time, so that won't affect my idea one way or the other.

I'm curious, how much of an increase have those of you out there seen in the ammo you've bought? If I were to buy a few battlepacks of .308 here and there as I felt like it, and just let it sit, how much could I expect them to appreciate in value? They would essentially be bought and set aside, in no way would they be unpacked, altered, used as "shooting stock", etc. Purely a seperate stock for later sale/trade.

I know it's not exactly the stock market, but what do ya'll think? I have no real interest in gold, silver, etc as investment oportunities, so please no suggestions to that effect.

Also - I use .38 battle packs as an example above, because they're what sticks out in my mind as being something that is fairly sought-after by shooters. What, if any other calibers would you suggest I consider as well? I'm thinking in terms of "units" of ammo, like battle packs or "sardine cans" that I could readily and easily store without much extra preparation or fiddling with.

Thanks!!

 

[pbhome71]

I bought ammunition and keep them for either recreational, or emergency use.

I have better investment instrument that the ammo.

-Pat

 

[Mannlicher]

In time of great need, there will be no price too high on ammo..........

 

[bdcochran]

take a deep breath

1. the reality is that you are not going to stack 40 pound cases of ammo in your garage or storage and expect to sell it as factory fresh ammo to someone in the future.
2. the reality is that when shtf, you will not sell ammo because the person to whom you sell it may kill you.

3. unless you are a dealer, the shipping costs and sales tax will kill you.

How or why am I so smart? Because I am a former dealer. I have been selling off cases of commercially reloaded ammo and reloading components for the last three years. Ammo is not, I repeat not an investment.

The same mentality afflicts people who think about buying gold and then selling it for a whopping profit. Unless you are a dealer with an established location, who is going to pay you full boat retail for your "gold". And if you go to sell "gold" is the dealer going to pay you the retail price for your "gold". Gosh no!

I sold my coin collection on eBay. Do you think that I received retail prices? Of course not. And, do you think that dealers with established locations were going to pay retail?

So, you open your garage and say "I have a lot of ammo for sale." A guy hears about it and after shtf, comes and robs you!:banghead:

 

[cpileri]

maybe a smaller scale

Agree with all that has been said.

Let me add that in trying times, though, there is no doubt that the value of ammunition will go up. Having one more type of barter item in your DIVERSE collection of things to use for trade can't hurt. Saying "Hey buddy, let me see if i can find something here..." (as if to imply you really only have the one box) and adding that scarce 50-rd box of 22LR may make the difference between you being able to trade for an item of his or not.

Now, i wouldn't count on using it as de facto currency like some older, Y2K yarns tell. But having just enough to sweeten a trade may be a deal maker.

FWIW.
C-

 

[Fly320s]

That sounds more like ammo hedging.

Buying ammo now to save money on buying ammo in the future is a hedge, not an investment. It may be a good way to save money, but I think it is a poor investment choice.

Like bdcochran said, I think a person will have a difficult time selling ammo for a profit.

 

[1911Tuner]

I try to maintain a box or so of even the less popular calibers, carefully stored. .32 Winchester Special...6.5 Carcano...7X57 Mauser....22 Hornet and K Hornet... .222...32 S&W Long/Short, etc. Not a lot of cash outlay for most of these and they could be all that some people can find someday.

 

[kingpin008]

Ok...perhaps I'm not making myself clear. I'm not interested in setting up shop here, I'm interested in the possibility of using ammo as a form of investment. I have PLENTY of ammo for personal recreational use, and for SHTF use, if necessary. That's not what I'm asking.

The "reality" is, I said nothing about stacking my garage full of ammo and trying to sell it to people at "factory fresh" prices. That's something you read into it. I'm interested in keeping an eye out for ammo from time to time, and buying a little to possibly sell back or trade back at a later date. Who said anything about shipping it anywhere, or anything like that? I have no interest in opening up my garage and announcing to the world how much ammo I have. Why would I do that?

Respectfully, I'd ask that people really read the post before they comment. I do appreciate the comments, but so far I really haven't gotten anything useful. If I'm not being clear in my post, I'll be happy to clarify where I can but I was under the impression it was pretty straightforward.

 

[kingpin008]

Here's where I'm coming from - Let's say there's a gun show, and I have three or four battlepacks of a popular caliber of ammo on hand that I have absolutely NO use for whatsoever. I have purchased these previously, using money that I had completely to spare. I am able to walk in to the show, with an advertisement on my back "__ caliber battlepacks for sale, good prices". You know that someone would be interested. Let's say I bought each pack for $65 a few years ago. I've stored them in my house, in space that I didn't have any use for. I'm able t sell them for $95 a pack, which is still ten bucks cheaper than the scuzzy dude down the aisle selling the same ammo. That's thirty bucks profit, right there. Sure, I'm not going to get rich, but I never thought I would.

That's all I'm saying. Maybe it was a dumb question, but I don't think so. I have NO interest in "selling out of my garage", or any such silliness. Just asking what people thought of it as a way to make a little extra cash by doing next to nothing, hah.

 

[MrBorland]

I'm curious, how much of an increase have those of you out there seen in the ammo you've bought? If I were to buy a few battlepacks of .308 here and there as I felt like it, and just let it sit, how much could I expect them to appreciate in value? They would essentially be bought and set aside, in no way would they be unpacked, altered, used as "shooting stock", etc. Purely a seperate stock for later sale/trade.

I know it's not exactly the stock market, but what do ya'll think? I have no real interest in gold, silver, etc as investment oportunities, so please no suggestions to that effect.

Well, it's an interesting idea, but I agree with many of the responses so far. I'll offer some thoughts anyway: Like any potential investment, though, you'll have to keep in mind that past performance isn't necessarily an indicator of future performance. I think you'd be wise to find out exactly why ammo prices have increased, and whether those factors would still be in play in the future. Ammo prices could actually go down. Find and use real data here - not opinions on forums. How much has it gone up? (though that's one of your questions - but, again, the answer should be too important to you to trust to this forum) Is it high because the raw materials are being used to make military ammo? How long will the military need as much ammo? What happens if the Democrats win, there's a policy shift, the defense budget is slashed? Or is it that the raw materials are flat-out more expensive to make? If so, what's the source of this increase? Fuel prices?

Also, it's obviously in your interest to buy it as cheaply as possible - so you may be looking at on-line sources. If so, you'll be paying lots for shipping, and you'd have to recover that cost over and above your expected return.

Finally, even within a popular single caliber such as .308, there are many many variants available. Which would you stock up on? You might sell all your 180gr HP, but very little else, in which you'd be stuck with it, and not able to recoup your costs.

How would you protect your investment from fire or theft? Insurance or a big honkin' safe? Both cost money. Are you willing to risk it?

Just some thoughts. Do your homework and good luck with whatever you decide!

 

[horge]

Hi

You're still looking for a ROI, right?
Thus, previous posters weren't too far off your
thoughts when they posted. Let me explicate...

With the way the metals market is trending,
there'll be appreciation in price, assuming you can store
your stuff properly, but it'll likely take volume to make
back what you invested in proper storage.
With volume, many of the previous posters' comments DO apply.

My personal objections are based on sad experience.
Ammo is semi-perishable, depending on local climate,
and when stored in quantity, quite the hazard in the face of fire.
I lost a good friend to the latter consideration.

JM2, YMMV, etc etc

 

[Fly320s]

Here's my line of thinking:

$65 at 5% interest compounded once a year, after 3 years = $75.25
$65 at 10% interest compounded once a year, after 3 years = $86.52
$65 at 15% interest compounded once a year, after 3 years = $98.86

You can make 5% in a savings account and 15% in the stock market without too much trouble.

So, you can see that your idea isn't really much of an investment. I haven't calculated inflation or your costs of transporting the ammo to the gun show.

Look, if you want to buy ammo now with the hope of selling it in the future for a higher price, go do it. I won't try to stop you. But don't delude yourself into thinking that you have a good investment.

As for ammo price increases, .223 and .308 have doubled in price over the last 3 years. Will it double again over the next 3 years? Who knows... that's why the commodity market is there.

 

[kingpin008]

Fly - I'm not deluding myself, it was just an idea I had kickin' around the old noggin. The more I think about it it does seem like a shaky idea at best, but that's how it goes. No stupid questions, and all that.

 

[strat81]

Kingpin, in the scenario you described, your annual interest rate would be approximately 13%. That's very good, considering that, historically, the stock market as a whole has returned about 10% per year OVER THE LONG TERM.

However, stocks, bonds, mutual finds, and money market accounts are fairly liquid investments. Your ammunition is not. Ammunition is also subject to the changing legal and economic marketplace, possibly more so than traditional securities.

If you want to invest in something firearms related, look at WWII American small arms, Garands especially. Or better yet, look at S&W or Ruger stock. S&W has been doing great lately.

Or, take a finance course at the local community college, learn about the stock market, read Investor's Business Daily and the Wall Street Journal everyday, and try the market. I've mostly given up on stocks, but I've done quite well with mutual funds.

 

[DoubleTapDrew]

I wish I had bought a lot more when it was cheaper but I don't think those who did buy are selling it even though it costs more now. You might make a few bucks but keep in mind ammo is somewhat perishable. I wouldn't pay todays prices for old ammo. I had a 5 gallon can of gas I bought a few years ago, when gas was $1.60 a gallon. I don't think someone will buy it from me for $3 a gallon or even $2 a gallon. I found it and used it in the lawn mower.
Not the best example but those are just my thoughts.

 

[MrBorland]

$65 at 5% interest compounded once a year, after 3 years = $75.25
$65 at 10% interest compounded once a year, after 3 years = $86.52
$65 at 15% interest compounded once a year, after 3 years = $98.86

You can make 5% in a savings account and 15% in the stock market without too much trouble.

So, you can see that your idea isn't really much of an investment.

As for ammo price increases, .223 and .308 have doubled in price over the last 3 years.

I just need to point out that a doubling in 3 years is over 40% growth per year. Sounds like a pretty good return to me.

Still, Kingpin, others make good points. As for me, the best advice I could offer anyone considering an investment is to be sure to do your own data-based research (e.g. have they doubled in 3 years?), then decide for yourself.

 

[another okie]

Buy as much as you might want to shoot in the next ten years, if you can afford it. It's not going to get cheaper unless peace breaks out all over the world and they discover vast new supplies of copper and lead. Having a good supply can help you get past short term peaks in prices without getting hurt, but I suspect most of us are not going to shoot enough for it to make a big difference. I try to keep at least a thousand .223 and two thousand 9mm around.

 

[Kindrox]

I think your plan can work but on a limited scale. Some calibers are probably at historic lows and while they may or may not increase quickly over the next few years, I think there is little chance of a price decrease. For example

7.62x54r (boat might be leaving the dock on this one, depending on atf action)
5.45x39
30.06
7.62x25

are all available in surplus rounds and I don't believe they will ever be manufactured/sold less the prices they are currently selling for.

While other calibers have increased dramatically in price, a lot of that has been due to the war and the price of metals, and then ammo hoarding has compounded that. If you load up on .223 or .308 at todays prices, and the war or metal price situations change, you might get caught with the classic situation of having baught high.

Obviously no one can predict the future very well or there would be a lot more billionairs so maybe you could still do well with .223 or .308, but the first four calibers I mentioned seem much lower in risk.

The whole concept seems a nitch investment as more than a few thousand invested in the cheap rounds will start to take considerable (climate controlled) space, and there is the question of losing your investment to fire or theft, so you would need to be insured for those risks.

 

[knockonit]

ammo

I typically buy ammo at a reasonably low price, then trade it off for items I need to help with the collection, i buy all types of ammo, someone, and I mean someone always needs ammo, or wants to trade.
I believe if they manage to slow the ammo down or price it too high for some ammo will be come the currency to some individuals. I certainly hope not, but hindsight is always 20/20,
good luck which ever way you go.
rj in sunny arizona

 

[Jorg Nysgerrig]

Ask the guys who bought high during the primer shortage back in 94 since "prices can only go up!" how their investment paid off.

 

[DMK]

the reality is that you are not going to stack 40 pound cases of ammo in your garage or storage and expect to sell it as factory fresh ammo to someone in the future.

You're too late. You should have bought surplus ammo 4 of 5 years ago and stocked up. Try to buy surplus 7.62x51 today. Or .303 Brit, 8mm Mauser, or 5.56x45. I have many cases of the stuff. Some has already doubled in price. My buy ceiling used to be 10 cents per round. I think I went up to 15 cents per for some Danish 30-06 once. Try to find decent surplus rifle ammo for under 20 cents per today. The only ammo like this left is 5.45x39 and 7.62x25, but I don't think the demand will ever be there like 5.56 and 7.62x51. The glory days of cheap gluttony are over my friends.

However, the problem with selling it is where would I get more? I enjoy shooting my Aussie F4, SA .303 and Winchester Q3131A. Even if I could sell it for $1 a round, you can't find that stuff anymore to replace it. Right now I've got a good job, all my bills are paid, I eat well. I need ammo more than I need money.

the reality is that you are not going to stack 40 pound cases of ammo in your garage or storage and expect to sell it as factory fresh ammo to someone in the future.

Nobody is going to care about 5 more years on ammo made in the 50s, 60s,80s or 90s. I bought 7.62x51 for $20 per 200rds. Now it goes for $40 per 200rds. Same exact ammo, same manufacture dates.

 

[Lone_Gunman]

You can make 5% in a savings account and 15% in the stock market without too much trouble.

Consistently making 15% on the stockmarket is harder than most people would lead you to believe. There are a lot of people on the internet who say they can do it, but I would need to see their portfolios to believe it.

Also, remember your 15% stock market return will be less after you pay capital gains tax and broker fees.

You won't do that with cash ammo sales.

 

[Dysfunctional Individual]

With similar risk and effort, it's so much easier to "make" "money" in the paper markets. Nonetheless, in the spirit of diversification, some speculation on ammo might be fruitful. I made specific bets on SA .308 battlepacks and SS192 5.7x28, both of which have doubled since, but these were probably one-time deals.

 

[JohnBT]

I bought cases of Wolf Match Target .22 LR when it was $15 per brick. Now it's $35 or $40 or so. I know one shop asking $49.95. The Wolf Match Extra was only $18 a brick when I started stocking up.

I started buying Winchester AA HS 28 ga. when it was relatively cheap, some of it for as little as $3.49 a box on sale. Now it's running $8 or $9 a box. I wish I'd bought a couple of footlockers worth.

I wouldn't call ammo an investment, but what I have is certainly worth considerably more than I paid for it. Same with the $8.50/50 .38 Sp. match wadcutters and everything else I got good deals on.

Actually, it was a pretty good investment considering what ammo for every range trip would run me at current prices.

John

 

[boredelmo]

It would be great if your hobby could also turn out to be an investment huh? Realistically though, i would stock up on ammo you could use if things go awry.

Is buying 9mm at $160 per 1k worth trying to peddle at $200 per 1k in a few years? Probably not worth the hassle. You'd have to buy 25,000 rounds just to make $1,000 later on. Don't forget all the hassle of trying to sell, package, ship, and store that kind of ammo.

But buying up maybe 5k worth of ammo now to shoot through the years doesn't sound so bad. At least that way when you consume ammo you're saving a few bucks and if you realize you don't want that ammo you can sell it for at least cost.

So if you think ammo prices will rocket up so high, just buy enough for your usage for a couple of years with the option of selling for at least the price you paid later on.