Guns better than gold?
Today's Financial News - Posted November 10, 2008
Smith & Wesson Holding Corporation (NASDAQ:SWHC) jumped over 14% today. Sturm, Ruger & Company (NYSE:RGR) was up almost 5%. What’s in store for U.S. gun manufacturers?
by J. Christoph Amberger
Baltimore — (TFN): The average suburban family man in Baltimore County is not what you might imagine when you hear the term “gun nut” or “conspiracy theorist”. In fact, judging by the Obama/Biden signs in the front yards, you’d think that Baltimore County must have the highest density of sociology professors, NEA grant recipients, and MSNBC Hardball hosts in the nation.
Which makes it all the more remarkable when, two days after the election, you run into an unassuming, stolid acquaintance who brandishes two factory-new 30-round rifle magazines in a plastic bag.
“Last ones anywhere,” he beamed.
Curious, I began asking around. Laywers, architects, software engineers, doctors. Swimming dads, fencing dads, scouting dads. Half the people I polled had either just bought their first firearm… or made substantial additions to their armories. Pistols, rifles, shotguns. Semi-automatics and assault rifles. Ammo. And multi-round clips. Enough to seemingly turn every other family residence in the neighborhood into a miniature Monte Cassino, minus the casemates.
“A lot of people are buying them as an investment,” the New York Times quoted a gun dealer. “Better than gold.”
The Democrats’ victory at the polls is turning into the anti-gun lobby’s nightmare: “Clinton was the best gun salesman the gun manufacturers ever had. Obama’s going to be right up there with him,” the Times quoted another dealer.
Better than gold?
Now, the civilian capacity to fire 30 or more rounds without reloading is not something required in skeet shooting or hunting wabbit. It doesn’t improve your aim target-shooting or improve your chances of scaring a junkie rifling through the family silver at two in the morning.
But it is the purest expression of a sentiment posthumously attributed to Benjamin Franklin: “Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.”
October gun sales had already increased by 15%. Analysts credit hunting season, but according to FBI statistics, that accounted for only 150,000 long guns in a total of 1.18 million firearms purchased. Not much hunting is done with a Glock.
November’s going to be like shooting fish in a barrel, pardon the pun.
That sure is good news for U.S. gun manufacturers. Of the few that are publicly traded, Smith & Wesson Holding Corporation (NASDAQ:SWHC) jumped over 14% today. Sturm, Ruger & Company (NYSE:RGR) was up almost 5%.
My long-term outlook on manufacturers of firearms and military contractors is as dim as my expectations for the new administration to maintain and firm the military backbone of this country.
With a view on Q4 earnings, however, I consider a short-term investment both in SWHC und RGR to have an upside of around 25% by Christmas.
Next Article: Moneymaking strategy: Don’t sell, rent
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November 20th, 2008 at 12:37 am
Benjamin Franklin was careful to point out, a pure democracy is like two wolves and a lamb voting on what they will have for lunch. With A Constitutional Republic, and a bill of rights,It’s a well-armed lamb
A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.
Thomas Jefferson
All tyranny needs to gain a foothold is for people of good conscience to remain silent.
Thomas Jefferson
Every generation needs a new revolution.
Thomas Jefferson
I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.
Thomas Jefferson