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Guns as an Investment- Again

Discussion in 'General Gun Discussions' started by guyfromohio, Jul 22, 2019.

  1. guyfromohio

    guyfromohio Member

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    I was cleaning out the house and found a 1996 Shooters Bible. While flipping through, it jumped out at me that gun prices have not gone up in the past 23 years. In fact, models still in production have either stayed the same or have dropped significantly. Just seemed very odd that it would buck inflation like that. These were the days of $9,000 Toyota Corollas that go for $22k+ now. So, I would say that if you are buying as an investment, you had better stick with models that have gone away or are going away (The Python is my example of that).



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  2. jmr40

    jmr40 Member

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    That edition of the Shooters Bible is showing MSRP, you could actually buy most of those guns cheaper in 1996 than that. Todays street prices are now pretty close to what is listed there. But you are right, the prices on most of them has not kept up with inflation and wage increases. We have to work fewer hours today to purchase firearms and ammo than ever before. There is also a lot more competition today which has helped to keep prices down. Glock is one example where street prices actually are down. A local gun shop was selling any 9mm Glock for $400 OTD including taxes a couple of weeks ago. That works out to about $375 before tax. Street prices in the mid 90's was about $450.
     
  3. Steve S.

    Steve S. Member

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    Plenty of makers, plenty of supply, demand has slowed significantly due to a gun-stable political climate - price must come down. In turn, ammo cost is following the same curve.
    Guns are easy and cheap to manufacture - really not much to them from a technological perspective and production efficiency has greatly improved.
    Whereas hand-fitting, skilled labor is extremely expensive, hand-fitted custom firearms are extremely expensive, we are entering an age where computer guided manufacturing will eventually price most bench-fitters out of the market without compromising quality and value.
    But for the unpredictable flow of politics, this is a great time to be a firearms hobbyist.
     
  4. GunnyUSMC

    GunnyUSMC Member

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    If you have the money to buy new guns that can be put away unfired. Years down the road they will bring more money then one that has been fired.
    Now buying used guns can be a way to invest your money. But you just can't expect to make money if you don't buy smart. When I buy used guns, I look for one priced below market value and then try to get them to drop the price. I also have a set limit on how much I am willing to pay. I also have a set rule not to exceed that set limit by $5, no matter how bad I want the gun.
    But where you find out if you made money is when you sell the gun.
    And never sell when you need money, that is when you loose money.
     
  5. GBExpat

    GBExpat Member

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    So true. Something that everyone should keep mind.
     
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  6. jmorris

    jmorris Member

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    Depends. Some I have bought gone up in value significantly others not so much.

    A $70 marlin 60 bought in the 80’s when a new one today is only $160.

    A $150 M10 back then is closer to $7000 today, much better return.
     
  7. Ks5shooter

    Ks5shooter Member

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    Colt "snake"guns go up in value every year. Guns from yesteryear are like baseball cards from yesteryear they were limited availability. Now they flood the market with both of them,therefore not so much of an investment except certain high end stuff.
     
  8. AlexanderA
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    AlexanderA Member

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    The biggest potential gain is on guns that might be banned. But there you run the risk that they might be banned without grandfathering.

    "Investment" in guns makes no sense unless you can keep a close eye on the political climate.

    And also, guns are not liquid assets like stocks and bonds. Normally, you buy in a retail market and sell in a wholesale market. A good part of your "gain" goes to the middlemen.
     
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  9. WheelGunMan

    WheelGunMan Member

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    I have never purchased a gun as an investment. I purchase them to use and enjoy why I'm here and to pass on for future generations to enjoy.
     
  10. AlexanderA
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    AlexanderA Member

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    Neither have I. I have purchased guns mostly to fulfill collection goals -- the goal being to have samples of most of the guns ever issued by the U.S. military. (Sadly, I have fallen far short of that goal.)

    The investment rationale has proven useful after the fact, to justify my purchases to other people. The wife doesn't object so much to spending all that money if you can show her that the stuff is going up in value.

    But the increase in value has been a side effect of selecting items carefully in the first place. I haven't bought guns that I haven't researched first.

    My biggest windfall was due to the Hughes Amendment. There was no way to predict that when I was buying machine guns. I bought them because they filled a place in the collection.
     
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  11. guyfromohio

    guyfromohio Member

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    Absolutely.

    However, in 1996 I likely paid much closer to MSRP....no internet to compare pricing, no Bud’s online ordering, no Armslist, Grabagun, online auction sites. In fact, I remember paying $550 for a new Glock 17 in 1996....that being said, I also remember buying a Colt 1991 for about the same $550 that same year. It was my first year of having a job post-college.
     
  12. .455_Hunter

    .455_Hunter Member

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    I purchased a NIB S&W Model 60-12 snub (.38 only in the new .357 frame size) in August 1998 for $380 at the LGS. The current equivalent Model 60 on Buds is $612.
     
  13. 460Shooter

    460Shooter Member

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    I think it's really important people consider potential return on their money.

    Say you bought a gun 20 years ago, and when you check the value now it has doubled?

    Could you get a better return on an IRA? What about a savings bond? What if you'd put that in a 401K? What about something else?

    I'm not saying guns are a bad investment, but I think there's better ones. What was the value of the American dollar when you bought the gun versus now? It may not be as much of an increase if you consider that.

    But the up side is you have a toy to play with. That also makes the point that if you have a gun you really love and refuse to part with, what is that gun worth? It's worth exactly $0.00 because you refuse to part with it.
     
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  14. reddog81

    reddog81 Member

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    It's hard to guess what will be the hot item 20 years from now. In 1996 most guns stores were sitting on Pythons for months, if not years, because no one wanted an over-priced 6 shooter. Buying a Python at today's prices and hoping that they see the same amount of gain they have over the next 6 years would be extremely foolish.

    My best luck has been with Mil Surp items. When they flood the market sellers have to drop the prices dramatically to try and move inventory. When the supply dries up, prices jump because supply is limited to what is on the civilian resale market. Unfortunately there's not much left in that pipeline.

    If you want to invest in guns I suggest trying to find high quality used guns and try to get them as cheaply as possible. Basically do what gun stores do and buy at .$50 on the dollar. Of course that's not easy for your normal person without a gun shop.
     
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  15. JTHunter

    JTHunter Member

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    Another possible reason for the prices remaining so close to that book is that manufacturing practices and equipment have improved, esp. with investment castings for some parts and CNC milling machines. Those machines can do the job faster, with greater repetition, and to tighter tolerances than the "hand finishing" of earlier production runs.
     
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  16. GunnyUSMC

    GunnyUSMC Member

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    I never feel the need to justify the purchase of any gun. If I want it, and the price is right, I buy it.
    I have a lot of guns that I could sale at a large profit, but I plan to hold on to them a little longer.
    I did give three away this year. The smile on someone’s face can be priceless.
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  17. drk1

    drk1 Member

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    As others have expressed, there are many ingrediengts involved in shaping the demand/price curve for firearms. However, for the most part, in my 50+ years of experience, the issues of supply and demand are at the top of the list. One example as others have pointed out, are the Colt "snake guns" which will continue to go up in value because the desirability of the objects in a market where simple population growth increases demand. The key is being able to decide what will be in demand in 20, 30, 40 or 50 years by a population that hasn't been born yet in a political enviroment which suggests such items may even be illegal by then. For example, in 2005, I put over 300 items with an auction company. One of those items failed to receive a single bid when offered for sale in three different auctions. While there was never a "reserve" on the item, the auctioneer didn't want to sell it at a price that might offend me. I told him to sell it regardless of price. It eventually sold for $350. Today that item commonly sells for more than $1000, when it is available. Clearly I failed to predict the future demand/price curve of that item, although I had purchased it 15 years earlier with that in mind. In short, if you're going to invest -- in whatever commodity interests you -- be prepared to win some and loose some! Please forgive me if that sounds old and simplistic, but as someone else more cleverly said, "it's sort of like Las Vegas without the buffet!"
     
  18. JudgeHolden10

    JudgeHolden10 Member

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    $10,000 invested in the S&P 500 in 1990 would have returned about 1394.8 percent after reinvestment (https://dqydj.com/sp-500-return-calculator/). That's $149,500, albeit in nominal terms.

    At any rate, I buy firearms because I like shooting them. If they appreciate in value, that's just icing on the cake.
     
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  19. Balrog

    Balrog Member

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    Even Colt Pythons and Single Action Armies are no match for the stock market.
     
  20. theotherwaldo

    theotherwaldo Member

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    I buy things that I enjoy possessing and using, but I also try to make sure that most of my purchases of durable goods at least keep up with inflation. Almost all of my firearms have achieved this, although the surviving ammunition has fallen short... .
     
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  21. Slamfire

    Slamfire Member

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    I recently read an article about Neil Woodford’s frozen flagship fund and had to look up illiquid assets, which was what the fund manager had been buying:

    https://investinganswers.com/dictionary/i/illiquid

    Illiquid describes an asset or security that cannot be sold quickly due to a shortage of interested buyers or a lack of an established trading market. Illiquid assets cannot be easily converted into cash without potential for losing a significant percentage of their value.

    Liquid Asset: A liquid asset is cash or securities that can be converted to cash quickly.

    I consider firearms an illiquid asset due to all the laws making it difficult to transfer them. You have to pass through a maize of Federal and Local laws, and those laws are getting only more Byzantine by the day. Yes, you can make money, but you are going to have to work at it. And those of you who think your heirs want a rack of strange and obsolete firearms, or would appreciate them, don't count on it. They want the liquid assets, that is cash. They will sell your guns for a song as they don't want to bother with them. Their greed will be more than their patience and perseverance.

    It is my opinion that you should buy what you like, what you want to shoot. If you find you have too many firearms and they are cluttering the house, sell a few. You will probably regret that in time. I really am upset I sold a pinned and recessed S&W Combat Masterpiece in 38 Special. Should have kept it, but at the time, 357's were all the rage. It was a fine revolver, nice adjustable sights, and did not create fireballs in the front of the muzzle. But I wanted fireballs, and now I don't have the thing.

    Also, the type of middle class collectables we buy, they don't increase in value as much as the stuff the plutocrats buy. I knew people who bought "Hummels", and Franklin Mint Collectable plates. Take a look on ebay, thousands of them selling for less than half of what the original owner paid. For all his sins, being a stupid investor was not one for Bill Cosby. Take a look at the value increase in his art collection. One artwork he bought for $105,000 in the 1970's, is estimated to be worth $14 million at auction.

    You think you have seen the height of absurdity when Basquiat's skull painting sells for US$160.5 million at auction.

    1495162781774.jpg

    Well, that is chump change to the prices now.


    List of most expensive paintings

    https://en.wikipedia.org/wiki/List_of_most_expensive_paintings
     
    Last edited: Jul 23, 2019
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  22. Rodentman

    Rodentman Member

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    I don't consider guns investments. They may go up in value but that is not why I buy them. Rolex watches have been so hyped that many are selling on the gray market for 2x MSRP. Many people don't buy them to use, but to put in the safe. I put my money in true investments and am now reasonably settled in retirement. BTW get reputable investment advice, not from Jim Cramer or Suzie Orman.
     
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  23. Rembrandt

    Rembrandt Member

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    As pointed out, some guns do better than others. A Ruger 10/22 that has a production run of 10 million copies will never appreciate in value...unless the other 9.8 million copies are destroyed or vanish. Better off buying limited production guns and high end quality or historical firearms.

    Examples of putting the same amount of $ in other investments is valid, just remember those assets generally have a paper trail that the tax man can track for capital gains. There is no certainty you could access those investments in the event of a catastrophic (political or natural disaster) event. Intangible items such as jewelry, art, firearms, etc.....have no title, transfer papers, or deed that can be tracked for confiscation or tax purposes. All that money you made in the stock market will eventually be taxed. Grandpa's 1873 Winchester 1 of 1000 handed down for generations will not be taxed unless it's sold at auction and there's a record of it.
     
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  24. AlexanderA
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    AlexanderA Member

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    Middle class collectables tend to follow a pattern: when people hit middle age, and have disposable money, they like to buy things that they admired in their youth but couldn't afford back then. This bids the prices for those items up, but then the prices fall again as that generation ages. A good example is 1960's-era muscle cars. They were hot in the 80's and 90's, but not much today. The same is true for fads in guns, with the added factor that their popularity is proportional to their appearance in the news and movies. Having a gun in a blockbuster movie can make it an instant collectable.
     
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  25. P5 Guy

    P5 Guy Member

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