Sunday, October 20, 2013

Investing in Firearms

I've sort of casually invested in firearms for many years.  I say "casually" because I have never investigated market conditions, nor have I studied what was hot and what was not.  I had an informal awareness of the fact that Lugers were increasing in value at an obscene rate and that the Python I foolishly sold years ago was now the price of a respectable used fishing boat.  

I have always like Lugers and other early German pistols, as well as Smith's and a few others. These were the basis of my "portfolio".  I also was fortunate to be the recipient of a number of firearms from friends and relatives over the years.   I was doubly fortunate in that most of these were in excellent condition and were very "collectable".   So these weapons are the basis of my Firearm Portfolio:
Manufacturer Model Date  Caliber (mm)
Sauer 38H ~1941 7.65 mm (.32 ACP)
Browning High Power 1986* 9mm
Inland Division M1 Carbine 1941* .30 Carbine
Mauser Werke Mod. 1895 Pre-War  7.63×25mm Mauser 
Mauser Werke Mod. 1895 Red 9 9mm
Smith and Wesson Model 1950 1952 .45ACP
Smith and Wesson Model 624 1985 .44 Special
Colt Officers Model 1916* .38 Special
DWM P .08 Luger 1927 9mm
DWM P .08 Luger 1916 9mm
Mauser Werke P .08 Luger 1938* 9mm
Mauser Werke P.08 Artillery 1917* 9mm
Mauser Werke P-38 1943* 9mm
Walther P-38 1944* 9mm
UBERTI S&W #3 Modern .44 Russian
Colt Targetsman 1974* .22 LR

The asterisks indicate dates of manufacture that are either on the weapon or have been confirmed by a record search.  All are in Excellent condition.  The Mod. 1895's are virtually new. The Lugers have some holster wear but are very nice.  The point is that any collector of these things would be happy to add any of the examples to his collection.

How has this portfolio performed?  Better than my stocks, that's for sure.  However, some of the values, while all have grown, have not increased as much as would have guessed.  The High Power is only about 15% more than I paid though it is virtually new.   The M1 went from (I am embarrassed to say) around $175 to around $1000 (I said "buy smart", didn't I?)

I bring this subject up because of a neat little piece published by our pals at the Rock Island Auction Company (RIAC):

Stocks, Bonds or Barrels by RIAC

It's a good read because if you are  shooter and own firearms, you have already invested.

I commented on the piece but will repeat my thoughts here:

Interesting, and in support of what I have been saying for some time. The main thing (aside from the good caveats that you already mentioned) is condition, condition, condition. Buy one fabulous Python (or Luger or Broomhandle or Mauser Pocket Pistol) rather than 5 Fair Condition C&R .45s. The rate of increase for the good stuff will be jaw dropping, the other stuff will appreciate but it may take a lot more time.

I have a rule of thumb: if you buy a firearm intelligently (ie. used, good price etc) you will be, on average, at break even in 12-18 months. In 2-3 years you will show a healthy profit.

Finally, I would encourage people to not think of firearms as speculative investments. The AR boom has come and gone and AR's, unless collectable, are simply ugly tools whose value is fairly stable. 

Finally, finally, the question always is "is it too late?". That is should one actually buy a Python at today's prices?. I think so, provided you can get something of a deal. Do your research and try to find one that is reasonably undervalued. Then DO NOT HESITATE: go for it and don't look back.

Another thing. If you start accumulating collectable firearms you have to think about storage. Rather than rattle on, perhaps our friends at RIAC could do a piece on that topic.

Thanks for good information guys/gals.

No comments:

Post a Comment