Ammunition as an investment?

[1911Tuner]

Another consideration is that...the antis will use an ammunition loophole to circumvent the 2nd Amendment. In the early years, Sarah Brady remarked that they may not be aboe to get the guns, but that "We'll damn sure get your ammunition." There's already been talk of arsenal licensing and taxes...limits on the quantities that individuals may have at any one time...and unless I miss my guess...these issues will be on the table pretty soon. When that day comes, that 3-dollar box of .22 rimfire will double overnight. Six months after that, it will cost 30 bucks....IF you can find it.

Just food for thought...

 

[lee n. field]

Ammo is for shooting, not selling. Shoot now for fun, shoot later in an hour of direst need.

 

[RPCVYemen]

I think of any of the popular rounds as more or less commodities. I think a lot of people have tried to corner the market on commodities, and found it's pretty hard to due.

Ammo prices seem to fluctuate madly. Right, the war in Iraq is using up a lot of stock. Btu there are also a number of Eastern European companies coming on line. When a particular round gets expensive, I am willing to be that they'll jump on it big time.

Mike

 

[Shrinkmd]

Ammo is semi-perishable, depending on local climate,
and when stored in quantity, quite the hazard in the face of fire.

Sorry to hear about your friend Horge. Most of the posts I've seen here seem to advocate that ammo doesn't really go bad (stored well) and that fire safety is not a problem. Is there info to the contrary?

 

[W.E.G.]

I don't see an ammo supply as an investment, so much as I see it as a "preparation" against a time when it may be unobtainable. Good to have some supply more than you need for the immediate forseeable future. But unless you have unlimited storage space, it becomes an inconvenience, and even a potential liability if you go nuts and buy enough to fill the room floor to ceiling.

Most people move their residence every now and again. I moved a small supply in my last move, and I can say it was no fun, and it did not seem like anything I would have wanted to have a whole lot more of.

 

[Soybomb]

Bad idea. You've already paid sales tax or shipping on it so you have to include that in your marked up sales cost. Unless you're going to undercut current prices, most people will just buy from the store for safety and convenience. I'd think the increase in price would mean at most you'd break even. This is a losing scenario versus compound interest.

Lets say you take $1000 to invest instead of $1000 in ammo, conservatively make 5% a year on it, and compound it monthly. At the end of 10 years you've got $1,647. The value increased by 64.7% In 10 years your $15 box of 9mm will need to be sold for $24.71 just to break even with a very modest cd or poorly performing index fund. Add in that markdown to get it to sell we talked about and you're sunk.

Sorry to hear about your friend Horge. Most of the posts I've seen here seem to advocate that ammo doesn't really go bad (stored well) and that fire safety is not a problem. Is there info to the contrary?

I'm not sure that it always winds up stored as well as it should and doesn't wind up getting stuck in a humid basement or caught in a sump pump failure, etc. If nothing else a house fire or flood will destory your investment and you probably won't be protected.

 

[RubenZ]

I only buy ammo for me and only me. I would never sell it. It's one of those things that it just isn't worth it to sell it once you have lots of it. I like to think of Ammo like my guns. I have never and will never sell a gun. I may switch around parts. but thats it. Guns to me are priceless, no matter what the caliber, make, or model etc.

 

[MisterPX]

As a previous poster emntioned, you're too late. A couple years ago when Aussie 308 was $40% of what is is now, and 7.62x39 was haslf would ahve been when. NOw, you've already gotten into a period where we're close to max pricing.

 

[ConfuseUs]

Lets say you take $1000 to invest instead of $1000 in ammo, conservatively make 5% a year on it, and compound it monthly. At the end of 10 years you've got $1,647. The value increased by 64.7% In 10 years your $15 box of 9mm will need to be sold for $24.71 just to break even with a very modest cd or poorly performing index fund. Add in that markdown to get it to sell we talked about and you're sunk.

All that and don't forget that ammo is a lot less liquid too. So if you need to sell it to either cut losses or free up some cash it may take months to sell it all at the best price the market will bear. At least with a house, if you have equity built up in it you can borrow on that, unlike a 100% equity pile of ammunition.

Plus that stuff is heavy; not like clicking a mouse or making a phone call to sell stocks, mutual funds, or CDs.

Now, as far as ammunition making equipment goes, you may be able to make money making ammunition, provided there is a strong demand for it. That's the smarter investment in ammunition.

 

[flynlr]

I have several cases of Federal XM193 in my stash that have more then doubled in value just sitting in ammo cans in the last year. but I'm not selling.

 

[MRIman]

Hell YES,you can make money on ammo!!!
My story:
Back in Jan. of '06 Sportsmenguide had Wolf 7.62x39
listed for $8I.90 I think.
Ordered 13 cases,for a total of $1065(had free shipping code).
This year I've sold 6 cases at $180 each, $1080!!!!
Still have 7 cases waiting,that were FREE!!!!!!!!!!!!!
I could do the same with the 308,and 8mm I have on hand.
You can make money,just need to know what to buy.

MRI

 

[jeepmor]

Or.........

You could just shoot up your ammo, enjoy it, then resell all the brass to reloaders. You very likely won't entirely recoup your investment, but you get to send the pills down range and keep the brass from ending up at the scrap yard. And you'll get something for it, even it you only sell it by the pound.

Sorry, I'm not really much help am I. Just another point to ponder, good luck.

 

[Shrinkmd]

I'm not sure that it always winds up stored as well as it should and doesn't wind up getting stuck in a humid basement or caught in a sump pump failure, etc. If nothing else a house fire or flood will destory your investment and you probably won't be protected.

Well, I was thinking of things like spam cans of 7.62x54r or sealed battlepacks of GP11 or that funky prvi partizan m193. Or anything loose in an ammo can, maybe with some dessicant thrown in if you're worried about the seal. I wouldn't want a fire or flood, but since the non-hermetically sealed Bulgarian 50's goes bang nicely (and who knows how that was stored, transported by ship, warehoused, trucked by UPS, etc) I'm thinking humid basement isn't a big deal, as long as the temp is controlled well, no?

 

[Lone_Gunman]

Lets say you take $1000 to invest instead of $1000 in ammo, conservatively make 5% a year on it, and compound it monthly. At the end of 10 years you've got $1,647. The value increased by 64.7% In 10 years your $15 box of 9mm will need to be sold for $24.71 just to break even with a very modest cd or poorly performing index fund. Add in that markdown to get it to sell we talked about and you're sunk.

Thats not the whole story though.

You will have to pay capital gains tax on the $647 your stock earned, which reduces your net by $96, and you will have to pay some amount of brokerage fee when you buy and then sell your stock. For sake of discussion, we will say you are doing your trading online, and only incur $40 of fees from your broker for the transactions.

That means your $647 has been reduced now to $511, which means you are really only looking at a 50% return over 10 years.

Ammo prices will probably increase at least that much over 10 years.

Plus, if the SHTF you can't shoot your Google stock; the only thing the certificates will be good for is wiping your butt.

All that said, I certainly would not buy ammo as my retirement plan, but I certainly don't think you will ever lose money buying ammo.

 

[kellyj00]

I can see it at a cocktail party in 10 years.

"Well, my portfolio consists of about 10,000 shares of .308 and 5,000 shares of .223, it appreciated with the rate of inflation + about 5% APY. I've made about $100 if I were to find a buyer for it."

Versus
"Well, my portfolio consists of 90% investment in the entire NYSE and about 10% in bonds. I've made a consistent return of 10% secularly, and am looking at cashing out a few minutes after I go online and give a command to do so."

Follow the rule of 72. take 72 and divide it by the % annual gain you're expecting. HISTORICALLY THE NYSE (THAT'S NEW YORK STOCK EXCHANGE) PRODUCES A 10% GAIN overall for every year. if you invest in the entire NYSE (and there are funds that do this, just call Vanguard) then you may see a 5% drop in one year and a 15% gain the next, so it averages to 10%.

Ammunition is not an investment vehicle, it's a hobby. You're probably better of buying up classic cars and calling that an investment. "I'll just sell them when i want to retire"

I shouldn't say anything, it's people who 'invest' in cars that make the economy as strong as it is. Gretuidous spending makes my stocks go up....so, keep buying those overpriced nights out my outback steakhouse stock loves it.

 

[Sharps-shooter]

Ammo is a great investment

There's more than one type of investment, isn't there?

One could invest in copper and lead as commodities, and this would undoubtedly be easier to liquify than physical ammo, but would rise in price similarly.

It might be possible to buy shares of an ammo company, and this would be a way to profit from rising ammo prices.

I buy ammo as a hedge against inflation, since I reckon I will want it later, and the dollar will be worth less then.

Some businessmen buy ammo as a working asset, using it to coerce large sums of money from people. This can be very profitable, but also very high risk.

I never have sold any firearms or ammo, and don't think I will. If I get it, I want to keep it. But if I ever have to use it to save myself or my family, then it will have been a very good investment. And if not, it's great fun to shoot the stuff.

 

[greg531mi]

You should stock up on ammo....When the store has a sale, like $1/box of 5 wolf 12 gauge slugs, $2.50/box 9mm, $52/200case of buckshot, $6.39/550 golden Remington 22 HP's, I stocked up, did you?
Most hunters around here have only a box or two of ammo. They think that last years ammo doesn't work as good as this years!!!
Found out a long time ago, freight would eat up saving on ammo, so I buy them locally....Gander, Dicks/Gaylans, MC Sports, Dumhams, Calbela's, and Bass Pro Shops, gun shows....just know your prices....

 

[erict]

I'm with the "missed the time window" crowd. I'm sure there is money to be made but nowhere near what could have been just 2 years ago. I recently bought 4K of Lake City .223 for $180/K and that's a pretty good deal at todays prices. I remember seeing it for $89 per/k (Wolf) last spring though.

I think we're at, or near, the top of a pretty good price spike so trying to make money now wouldn't be worth my time.

 

[BigSoundRacing]

Ammo as Hedge

I have been collecting ammo in case the day comes when I can not obtain my calibers, it sits secure and i have no intension of selling it at anytime and I do not consume when I go to the range.

One certainty - the cost will go up.

Be safe, BSR

 

[asknight]

DMK said:

I bought 7.62x51 for $20 per 200rds. Now it goes for $40 per 200rds.

Ya might need to recalculate current 7.62x51 prices. Most everything I've seen is $0.50/round lately.

 

[MattB000]

Lets say you bought 50 cases of milsurp .223 one year ago. Would you be able to sell that now at a profit? For sure! Now, if you truly beleive it is going to significantly rise like that again, then it would probably be a decent investment. I think I can speak for the rest of us, however, when I say "I hope to god you are WRONG!"

This makes sense to me assuming you really feel it is going to continue to rise at a rapid pace. And if for some reason the market falls through the floor, you can always shoot it.

 

[chaim]

OK, many here are speculating that we've hit the peak, or even that prices will come down once the war in Iraq is over. I think they are completely missing the reason prices have gone up like they have.

India and China, with their billions of people, are modernizing at a tremendous rate. That has pushed up the price of gas and just as gas prices may fluctuate seasonally but the overall trend is up, I think the price of ammo will keep going up (though there may be occasional short term fluctuations). Why? Just as India and China has pushed up the oil market, they've pushed up the commodity prices of many metals (including the lead and copper that is in our ammo). They are no where near slowing down or levelling off. Thus, prices will continue to go up.

If you want to use it as an investment, why not? You like it, you know something about it, and prices will go up. However, as others have said, it isn't as easy to despose of when it is time as stocks or a bank account, and it needs storage space.

I think the better way to approach it is to buy up as much ammo in calibers you use now, and in calibers you plan on acquiring later. Prices won't be coming down, so stock up at today's prices. Then, you are secure in the knowledge that since prices will be going up, should you decide to part with your guns in a caliber, or not acquire a gun in a caliber you've stocked up on, you'll be able to sell your ammo stocks at a small profit.

For investments I think I'd go with the stock market right now. Prices are generally down right now- that is great news for buyers. Just be sure to do your research so you are only buying strong companies, and you can be pretty sure to see some decent returns in the future as the market rebounds.

 

[JohnBT]

"...the stock market right now. Prices are generally down right now"

Well, yes and no, depending upon your point of view.

Taking the long view, I think stock prices are actually up.

From what I've seen, most everyday-working-type people investing in the market are pursuing a hobby with their frequent trading. I'm no good at it, that's why I simply commit a set amount every week and only sell when I hit a target number - up or down. I can't think of but a few times I've managed to hang on to a stock long enough for it to go up 4x, 5x or 6x. I set a low sell point and take my profits and run.

Ammo is cheaper now than it was when I was a kid.

John

 

[Wastemore]

I'm a dealer and can tell you that between the beginning of '06 until now, ammo prices have increased:
69.30% for .40 S&W
85.45% for .223
58.64% for 9mm
53.09% for .45

Speaking to our distributor this morning I discovered another expected price increase by the end of September and most like another in December.

I dunno, those sound like reasonable returns if liquidating is possible.

 

[chaim]

From what I've seen, most everyday-working-type people investing in the market are pursuing a hobby with their frequent trading.

John, I'd agree that most people do this, but most of us aren't financial wiz kids (as much as we'd like to think we are). Our best strategy is to find a few good stocks, put a set amount into them each month, and don't even look at it for a year. Every year reevaluate the company and stock and decide if it is worth holding for another year. I don't have the luck to second guess the highs and lows, so I think long term and conservatively when it comes to investing.