Collecting, buying, selling and timing....

[ApacheCoTodd]

Another thread brought this observation of mine and my wife to mind regarding the amassing of "things" against hard money times.

We're doing OK now but it was quite an awakening.

We had a great many things to include firearms, of which we always said: "Well, if we get in a bind, we can always sell..."

Then, when we did need money for issues not related to the economy or the rest of the world in general.... The rest of the world had its economy tank and no one was "buying".

There is such a glut of owned firearms out there that when push comes to shove and the dumping begins - good luck. Even ammo - one need only look at the .22 ammo issues of the past few years.

Another real eye opener was recently buying a Luger for the first time in over 30 years. How was I to know that I was at the cusp of many, many, old Luger collectors dying off and/or collections being broken up as the holders of those collections watch the auction prices drop... thereby leading to even lower prices - more Lugers - lower prices....

Anyhow, just thought I'd throw it out there for discussion.

I know folks will snipe at particulars as apply to them so just take it as a general observation of a situation which did in fact, actually happen with us.


Todd.

 

[Shanghai McCoy]

There was a similar discussion on a traditional archery website recently regarding older and classic bows. Seems to be a buyers market these days IF you can find a buyer .
I don't see many younger folks getting into the hobby of collecting guns these days.
Accumulating maybe but not so much collecting.

 

[subdude]

Todd,

I've witnessed the same thing in the old car hobby. Most people tend to want what they lusted for as a young adult, but couldn't afford. Once they can afford it, they're willing to spend whatever it takes to acquire one.

As the age bracket dwindles, the market for that particular object of lust dries up. So, cars that were big money 20 years ago struggle to find a sale these days.

There are exceptions of course, but generally the only way to recoup "investment" is to sell before the buyers start dying off....

Jim

 

[wally]

If you find what you want at a price you like buy it. Prices fluctuate, things go in and out of style and back again. But anything you "need" to sell has you in a position of weakness if you can't wait for the market to swing up again. "Collector" guns are not highly liquid if you want top market price in the best of times. The really high end stuff is a crap shoot as it usually sells at auction and is so far out of my league I don't worry about it.


Depends on the the nature of the "bad times". Tales from the Weimer Republic before Hitler came to power had stories of people waiting in line to buy bread with a basket full of money leaving it to hold their place in line while they went to the bathroom, coming back to find the money still there and the basket gone

Cash money (or credit cards) weren't of a lot of value around here for the immediate 3-5 days post hurricane Ike, if you didn't have it you couldn't find it to buy, and ATMs and Credit Card terminals had no connections. Guns and ammo were not needed but if you needed one and didn't have it you'd be SOL


There never was a "shortage" of .22lr ammo at $0.10+ per round, its just the more reasonable 0.05-0.06 per round "bulk pack" that has been hard to pry loose form the speculative hoarders -- I'm seeing signs of this starting to break. At last the last gun show the over-priced bulk .22lr (based on what Walmart and Academy sell it for) was stacked deep and not moving, the ~$75 Academy "bucket of bullets" the speculators had been pricing at ~$125 were down below $100 as they are starting to realize they may be stuck with it as raw material prices fall world-wide.

As I've said before, I base my "reasonable" .22lr prices on historical trends where the bulk-pack .22lr runs at about 1/4th the price per round of the the cheapest 9mm FMJ. I've recently got cases 1000 rounds of Tula 9mm delivered to my door for $170 each. This in only about 2X the "good old days" of 2004-6 when Academy had 9mm CCI Aluminum Blazer for $3.86+tax/50 "everyday low price.

 

[stonecutter2]

Guns tend to be a bad investment for hard times, aside from having at least one to defend yourself with - then it's quite valuable to you, obviously Generally your market is going to be limited, and you've got interstate sale limitations that can complicate. Not to mention that of course, people need to be interested in whatever you have to sell.

If you want to amass things for harder times, that you can then turn around and sell to get some quick cash, in my opinion consider physical precious metals. You've probably got a shop around you somewhere that would buy it from you, and if not, you've got the internet and a lot of easy shipping options to anywhere. If you're in a good enough situation with what you paid for them, you can even sell them below spot and still make a profit and get cash. Then the purchaser can flip for a profit if they want to try, and take on the risk of getting stuck with it.

As for disaster preparedness, you should probably consider water storage and shelf stable foods to stock up on. When money's tight, and just generally when you want to rotate stock, you can dip into your stash and be just fine.

Also, from reading another blog, I sincerely believe how important cold beverages are in tough times. The guy was in New Orleans during Hurricane Katrina, and he had a generator, and was well stocked with Coca-Cola. He said a ice cold Coke did wonders driving around and talking to people/getting into and out of areas. A small slice of normalcy in a crazy time is a big morale booster and potential bargaining chip.

 

[Schwing]

I tend to agree with stonecutter2. Several years ago I contemplated firearms as an investment vehicle but ruled them out for several reasons. They don't often increase in value (usually not even matching inflation), you typically lose substantial $ on anything that is modern and, as newer and "Better" models of the same handguns are released and advertised, you run the risk of ending up with something that not many shooters are interested in. Good examples of these would be early generation Glocks and Springfields. Good luck unloading an original XD for close to what you paid for it.

As for disaster preparedness, you should probably consider water storage and shelf stable foods to stock up on. When money's tight, and just generally when you want to rotate stock, you can dip into your stash and be just fine.

I believe this 100%. That doesn't mean that guns and gun related items can't be a boon in bad times. Having .22 ammo during these last few years has helped me make some tremendous trades and having any kind of reloading supplies can come in handy. Lead, for example, has nearly tripled in cost in my area over the last 5 years or so. I used to be able to get it for .33 at the scrap yard. Last time I checked it was close to $1. It sure makes me wish id bough a few thousand pounds 5 years ago

 

[huntsman]

Cash for emergencies, Silver Eagles for personal SHTF but guns are for using. "Wanting" is not enough of a reason for buying unless I contribute to the first two first.

 

[mnrivrat]

In the 1970's I worked for a company that was starting to build plants in China and Mexico.
My thoughts expressed at the time was that was going to head into severe problems on two fronts. 1st was the american job market . Competing with labor rates in places like China and Mexico was bound to be a losing affair for workers here.

The 2nd was an overall loss of value for items that were not necessities. As the jobs here fell into lower wage catagories, money for collecting stuff you didn't need was bound to fall short to what was needed to keep up with the cost of living. As I put it then, at some point in the future ,who is going to buy items like collectables.

So if I was correct ,then what we have now is a glut of items not only because of lack of interest, but simply because many can no longer afford to buy toys.

 

[reddog81]

Where are these low priced Lugers you speak of?

 

[ApacheCoTodd]

Thick on the ground where I go.

Watch auction closings, Small Arms Review show in Phoenix, Antique Arms in Vegas, "The Big Show" in Reno....


Lots of folks afraid they won't be able to capitalize on a collection that they have been thinking was a treasure trove so now they're competing for limited buyers.


Todd.

 

[gbran]

I've done OK with most of my financial investments, but personal belonging I usually buy high and sell low. But guns I just seem to a accumulate.

 

[ApacheCoTodd]

I wasn't really talking about dedicated investments, per se.

More an observation on assuming one can get money if needed from guns. Works out fine in most cases except when everyone else needs money too.

Same with art, antiques, classic vehicles... whatever.


Todd.

 

[rgwalt]

Guns can be converted to cash, quickly if need be, if they are priced to sell. I see "NIB" Glocks advertised for $500+ "with extras" on Texas Gun Trader. I'm not paying full retail plus taxes for a used gun, even if it hasn't been fired, simply to avoid having it papered to me. However, I am certain if one of those people really needed the money and were to list for $400, they would have cash in hand.

Guns aren't a great investment unless you happen to have a popular model and sell at the right time. But, they will tend to do better than other "toys" like ATVs, stereo equipment (or any electronics), workout equipment, etc. Anymore, I try to buy used whenever possible and let someone else pay the depreciation. I wait for good deals on-line or at a gun show, and have cash in hand.

The best thing to collect in order to protect yourself or your family from financial distress in the future is.... MONEY. Having an emergency fund with cash as well as some other investments such as CDs, bonds, and possibly some index funds, is the best way to deal with tough economic times. It isn't as fun as a gun collection, or a pile of precious metals, but it is the most practical. This is assuming you aren't preparing for a SHTF situation, which is not what the OP seemed to indicate.

 

[reddog81]

rgwalt makes a couple of good points. Guns are definitely going to hold there value better than many items. Sometimes they even appreciate at a decent rate.

Almost any Mil-Surp gun bought 10 years ago would have doubled in value. Pythons have increased dramatically in the last 5 years. AR15's doubled in price January 2013. I know these are fairly specific examples, but there are many more examples out there if I wanted to spend the morning researching the issue.

If you want to make money buying and selling guns the only way you are going to have any luck is if you can buy at the correct price. You aren't going to have much luck selling above market prices, but it's possible to buy guns at 50% to 25% under market value and then sell them for a profit. Gun stores do it every day.

Typically guns don't drop in value unless there is a bubble where the prices shot up unrealistically and then the market will correct itself but this happens very infrequently.

 

[huntsman]

^ The problem with taking anecdotal evidence from the last 10 years is the last 10 years ain't been normal, not just firearms but the value of all hard assets have been corrupted by cheap credit.

 

[reddog81]

The situations I mentioned above would have been minimally impacted by cheap credit.

Every decade has anomalies that are going to have impacts on hard assets or financial markets. When was the last normal decade?

 

[Old Fuff]

Well a recent auction of high-quality antique firearms brought in over seven million dollars in three days.

Collecting for an investment can pay off, but only if you know what you are doing! It has been proven that the "right pieces" hold their relative value in any economy, but what you find in most collections don't match this description.

Luger's aren't antiques, so for that reason I don't generally recommend them, but some variants are rare, and in excellent condition will hold and increase in value. Common "shooter grade" examples much less so.

In any economic downturn they're will still be some well-fixed collectors that can, and will pay handsomely to get what they want. The trick is to have whatever in the first place.

 

[Hoppes Love Potion]

Selling a collection now is different than selling a collection in a general depression or financial collapse. I think the usefulness of the gun will be a strong consideration if times are tough. Ammo availability is another. If you have an odd caliber rifle you might not be able to sell it unless you also include the ammo.

 

[huntsman]

When was the last normal decade?

the nineties, used gun prices in the 80's were reasonable IIRC.

 

[Teachu2]

So much of the market is no longer free, due to one government or another's regulation, which has created artificial shortages of supply. The US has limited imports from some countries. California is strangling the supply of many guns, while demand is being fueled by fear of both terrorism and further political action.
It's a balancing act when you consider the future of guns that may be in political jeopardy. For example, I purchased a couple of Glocks a couple of years ago - a clean Gen3 G17L and a new Gen4 G41 (under the now-expired SSE provision). Shot them both, and didn't really care for either. They sat in my safe, taking up room, as my collection grew around them. A couple of weeks ago, in a discussion on Calguns, I mentioned I had the 17L. That got me a couple of private messages inquiring if I would want to sell it. I researched recent sales of that model, and debated. I knew I was only keeping it because it was rare, but I didn't have any other reason to have it. So I decided to sell - but when? Will it be worth more in a year, how much more, and will the California Legislature continue to position for re-election by prohibiting private sales of off-roster guns? The gun had appreciated ~50% while I owned it, and may well go higher, but I was willing to let it go and move on to something else. Sold it very quickly for my asking price to the guy who asked first. Then I listed the G41 on Calguns, and it was sold in 17 minutes - at a substantial profit. Took the cash and bought guns and related stuff that I wanted and will use. Made two buyers and myself all happy.

I buy guns to shoot. I found that I'd rather shoot my G34 than the 17L, and my G30 than the 41, and any of my 1911s than any of the Glocks....so those two were done as shooters. Let the next guys enjoy them - I'll enjoy the guns I bought for the grandkids to shoot and the big, cheap (relatively) RSC I bought to use to secure ammo. Ammo may well be worth it's weight in gold in CA in the near future.

 

[No4Mk1*]

To me guns have value based on their functional abilities and to a lesser extent, history. A Rem 870 selling for $300 is worth more to me than an $8,000 over-under. To me the older collectors who pay so much for antiques run a great risk as they are replaced by shooters my age and younger who just don't see "value" the same way. This really goes for all "antiques," not just guns. I agree with the advice to convert some money to properly stored food. Having seen an ammo scare, I can only imagine what a food scare will look like.

 

[GBExpat]

Early in the first decade I bought a number of M1s from the CMP. They were running out and "flavors" (grades) were rapidly disappearing.

I figured that I would enjoy working on/with them for a few years before the supply dried up and their market value would increase.

... and then more & more Sources for CMP Garands kept popping up <chuckle> ... so I still have all of those rifles.

Not a hardship, btw, since I am not strapped for money and I also invested in a LOT of the relatively inexpensive milsurp ammo available at the time.

Now I am reading, again, that it appears that all of the sources have been tapped and the CMP M1 supply will finally bottom out.

Whether or not it is true this time (the non-CMP "Korean M1" rumors are still afloat), the market values have naturally increased over the ~decade so that, soon, I could probably sell most of my M1s for twice what I paid for many of them.

 

[MachIVshooter]

Guns can be converted to cash, quickly if need be, if they are priced to sell.

This is important to make note of. While buying guns isn't a good investment strategy, having firearms that you may sell if you fall on hard times can save your butt. Yes, cash is better, but is also far more liquid; for many, it is difficult to hold onto significant amounts of cash because there is always a need or want which is more important to them than a fat bank account.

Me, for example. If I find myself with a surplus of cash, there is always a repair or upgrade needed for a vehicle or the house, another piece of tooling for my machine shop, etc. But most of those needs don't justify selling off possessions at a loss. But the mortgage? That gets paid no matter what, even if it means selling off guns at a 20-40% loss.

I made really good money in the early 2000s for someone my age, having cleared $70K in 2007. And my lifestyle reflected it. For my generation (the little one between Gen-X and the millennial crowd, those born ~'77-'84), the prevailing wisdom was to buy whatever you wanted and worry about paying for it later. This doctrine made sense, as my income seemed to increase faster than the interest accrued on my low rate fixed and revolving accounts. But instead of pouring my money down a hole into things like entertainment and vacations, I chose to purchase tangible things with it. Cars, guns, tools. When things tanked in 2008, I saw a very sharp decline in income. I managed to get through the next couple of years by selling off a gun here, a car there, etc. when I had particularly bad weeks or months. I'd have have lost my home if I'd not wrapped my money up in semi liquid things with a market value. Yes, I took a loss on them, but I kept my house.

As another example, in 2010, while I had stabilized my situation a bit, income was still way down. I had taken work some 42 miles from home, and at the time, had only one vehicle that got better than single digit fuel economy. Well, one day on my way home, I blew the motor. I had no extra cash to repair or replace the car at the time, but within 24 hours, I got myself into a little econobox beater by flipping a LNIB Colt Combat Commander that I had paid $375 for a few years earlier. It took me all of about an hour to find a buyer at $700, and my dilemma was over.

So, while firearms may be a lowsy investment strategy and poor hedge against inflation, for some of us, they are a hedge against going completely belly up because we are reluctant to convert them into money unless we've no other choice. Kind of like a 401K or somesuch that you take a hit on if you pull out early, so you only do so as a last resort.

 

[hemiram]

I tend to buy slightly used guns, or new guns when they pop up every so often for really cheap prices, such as when they are being closed out. I have never, ever lost a dime on a gun I've resold, ever. And once in a while, I end up making a very nice profit. In 2014, I had a huge tax bill, and the guns I sold saved me from a lot of hassles and credit card interest. I had the cash I needed in a few days, and the guns have since mostly been replaced. I can't think of anything that is easily sold that holds it's value as well as a gun does.

 

[ApacheCoTodd]

To me guns have value based on their functional abilities and to a lesser extent, history. A Rem 870 selling for $300 is worth more to me than an $8,000 over-under. To me the older collectors who pay so much for antiques run a great risk as they are replaced by shooters my age and younger who just don't see "value" the same way. This really goes for all "antiques," not just guns. I agree with the advice to convert some money to properly stored food. Having seen an ammo scare, I can only imagine what a food scare will look like.

That so concisely wraps up much of what I've learned over the years and "value" should always be weighed agains sellability.

Times come around every now and again where it doesn't matter that you're willing to sell a Ferrari at 10 cents on the dollar if folks are only buying practical and realistic, if anything at all...

Todd.