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Old February 28, 2020, 06:04 AM   #1
TruthTellers
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Recession looming, how will gun industry respond?

With the stock market having dropped 12% in the span of a week due to the economic impact of the coronavirus and the potential of the virus' spread in the West, a recession is no longer an improbability. In fact, with how much the powers that be are saying "everything is fine" the more it seems it is not.

Given the industry is already suffering from the "Trump slump" during a time when people have money on hand to spend, if that money was suddenly gone how is the industry going to react? Can we expect rebates galore in the coming months? Will planned releases of new guns/gadgets be delayed if not dropped completely?

The only thing I remember from the last recession is car prices dropped, I wasn't paying much attention to the gun industry then.
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Old February 28, 2020, 08:20 AM   #2
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Well, if it gets really bad, the gun manufactures will be in for boon times.
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Old February 28, 2020, 08:26 AM   #3
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Quote:
Originally Posted by TruthTellers
With the stock market having dropped 12% in the span of a week due to the economic impact of the coronavirus and the potential of the virus' spread in the West, a recession is no longer an improbability. In fact, with how much the powers that be are saying "everything is fine" the more it seems it is not.
I wouldn't make too much of this market drop. The market is largely just people making poorly informed guesses about the future. For at least the last seven years, I've heard very smart people tell me that we are on the precipice of recession. Someday, one of them will be right, but I've no confidence it is today.

A market that has gotten this high this quickly makes me nervous, but simple anxiety isn't an analysis, and I've been wrong before in bailing out of something that has gained greatly since purchase, only to then see it continue to increase substantially after I sell. If I am an average person, the market is stuffed with people who share this anxiety and are primed for any sign of a downturn to turn everything into cash. That doesn't mean that the economy overall isn't growing; it may only mean that lots of equities were overvalued.

Is the retail firearm market one market? I could imagine an AR parts supplier that hasn't had good margins for a few years taking a recession very badly. On the other hand, the concealable pistol market has a lot of new-ish product that should continue to sell as concealed carry gains popularity.
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Old February 28, 2020, 08:50 AM   #4
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Quote:
Originally Posted by TruthTellers View Post
With the stock market having dropped 12% in the span of a week due to the economic impact of the coronavirus and the potential of the virus' spread in the West, a recession is no longer an improbability. In fact, with how much the powers that be are saying "everything is fine" the more it seems it is not.

Given the industry is already suffering from the "Trump slump" during a time when people have money on hand to spend, if that money was suddenly gone how is the industry going to react? Can we expect rebates galore in the coming months? Will planned releases of new guns/gadgets be delayed if not dropped completely?

The only thing I remember from the last recession is car prices dropped, I wasn't paying much attention to the gun industry then.
Well said 'truthteller'.

I would say, short term, depending on how bad it gets, how fast..expect ammunition(popular caliber, 223/556, 9mm) to get scarce because people are going to be buying a LOT of it. My local Cabela's sells thru their Herters brand 9mm and Tula 223 as soon as they put it on the shelf.

Firearms? Doubt it. Inventory is very good right now as far as I can tell.
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Old February 28, 2020, 12:26 PM   #5
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Trump is not gonna stand and watch us go into a recession, it not gonna happen so relax.
I don't think there's much Trump can do to tell other countries in the world to keep the factories, mines, oil fields, etc. open when there's a pandemic raging.

But I get what you're saying, it's an election year, he's gonna go all out if he has to to keep the economy from recession.
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Old February 28, 2020, 01:02 PM   #6
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I would worry far more about a certain party making further inroads into our local, state and federal government - than I would about a recession.

Keep that party out of any sort of power and the economy and our rights are in fair shape.
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Old February 28, 2020, 01:59 PM   #7
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The good thing about the current economic downturn is we know why and it's going to all be over. When things settle down and the Chinese get back to operating the factories, we will see a quick rebound (maybe not quite to the peak levels but that's just a typical correction).
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Old February 28, 2020, 02:52 PM   #8
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The stock market predicts what will happen in the economy, though never with certainty. Right now it is predicting economic impacts from reduced trade due to the coronavirus.

Truthfully, firearms are a commodity product with extremely long durability. Very low repeat business. Competition is fierce, and used guns are available aplenty.

All these factors spell reduced revenues, so that means cost cutting and in the case of weak sisters, bankruptcy, asset sales, or bought out by the strong.

Those firms that have accumulated a lot of cash during boom times could be expected to survive and take advantage of the weaker firms.

If the future political environment favors increased revenues, that obviously would help them but all the factors together have a combined impact. But as to the OP question - I have no idea what will happen at the consumer level.

Consolidation in the industry is what I would expect, with reduced numbers of product lines and layoffs if indeed we are headed for a recession.
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Old February 29, 2020, 09:16 AM   #9
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I read an article on my other hobby, photography. The impact there is slowing of new products, slowing of shipping and slowing of manufacture. Pretty bleak outlook for the next 6 to 12 months is predicted. So if one were to believe that, it will hurt companies like PSA and the American companies should fare a little better. Panic buying can't hurt the US gun industry either.
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Old February 29, 2020, 09:26 PM   #10
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I think photography is a totally different animal. It's slowing down because everyone has a camera in their pocket.... no one needs a new camera body or lens and a cell phone covers 99% of the peoples' needs.
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Old March 1, 2020, 02:38 PM   #11
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There was just a huge story on Market Watch about this current "Correction" and that now that many have sold off and taken what profit it can now is the time to make record killings because of the low stock prices and the time now is to buy!

So who's correct and Who is Fooling Who? Market Manipulators?
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Old March 2, 2020, 02:48 PM   #12
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There will be something if China stays shutdown, I think there will be an uptick in firearm sales in the near future. There’s a considerable resurgence in disaster prepping. Firearms go hand in hand to prepping. Lots of sick people in western Washington and Oregon. People have been sick for weeks. Rumors of corona virus already infecting people in the northwest have been circulating for weeks. Turns out that the rumors were true. Urgent care units are overwhelmed.
There’s growing predictions that stores will be out of important items by April.

The fears may be unfounded, this could all blow over but, the current state of things should not be taken lightly. Even if the virus is a nothing burger, the side effects of China quarantine might take us through a rough patch. Couple that with an election cycle, and the threats of violence that are coming with this election... we will have a bumpy ride... the size of the bumps are unknown.
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Old March 2, 2020, 06:36 PM   #13
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I'd say the response of the gun industry is the least of our worries now.
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Old March 2, 2020, 07:04 PM   #14
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And the market was up almost 1300 today 3/2/20. Most of the downfall is probably due to the automated trading programs most institutions now utilize which monitor prices, and when a stock price hits a pre-set price (low), the computer places the sell order to protect the owners profit, and then every other automated trade program starts/joins in, and the resulting free fall, so to speak. Don;t you just love "day traders". LOL
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Old March 2, 2020, 09:11 PM   #15
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Either way, China is shut down, we are already short on medical supplies because they come from China. Soon other things we need will run out if China continues to be shut down. We will be on our knees begging in months if it doesn’t pass soon... and that’s if not one other person in the Western Hemisphere gets sick.
There’s already reports of panic buying in Washington, I haven’t seen too much, as I order most of my groceries online, but the parking lots are packed when I have gone out.

I think this will fizzle, but it’s the closest I’ve been to a Stuff hitting the fan scenario in my life... within the borders of the U.S.
And a highly contentious election approaches
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Old March 2, 2020, 09:41 PM   #16
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And the market is up 3% today. China is going back to work.

I'd guess that the recession is still looming, and will be for some time.... and gun sales won't jump up due to panic buying for at least another election.
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Old March 3, 2020, 07:05 PM   #17
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And the market fell 800 or so points today, even with the Fed rate cut. The market is just be "stoopid", and over reacting, as usual.
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Old March 3, 2020, 08:03 PM   #18
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Even if China has gone back to work, the panic in Washington state is very real, and has really just began. hopefully all will return to normal before it gets too bad. I’ve been fairly well prepared for years, I might be eating some stale food, haha.

Oddly enough, I have a job that’s completely unrelated to travel but the parent company of my employer depends on a healthy travel industry. 9-11 almost took my company out. I’m a little worried about the travel industry.
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Old March 4, 2020, 11:23 AM   #19
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I'm holding out for Taurus to make a pistol that will protect me against Coronavirus.
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Old March 4, 2020, 12:11 PM   #20
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Been studying this since 2004.

It doesn't matter who the POTUS is. It's the system. Don't be fooled into believing that the stock market reflects the strength of the economy. Stocks are up because of cheap money which results in stock buybacks. It makes the corporation appear stronger than what it really is. How many planes has Boeing sold since the 737 has been grounded? There is no justification for it to be as high as it is. Ditto with most other corporations. If you want real statistics as to how things are going, check out John Williams' https//www.ShadowStats.com

I don't think there is a recession that is looming. Rather, we're on the precipice of the Greatest Global Depression which will see the greatest wealth transfer in the history of humanity. The only tool left in the toolbox of the Fed Res is to let the press run wild and the new federal reserve notes won't be worth the paper they're not printed on. We've been on life support since 2008 with TARP, QE 1-4, Operation Twist and now the Repro Market. Next stop will be the Fed Res buying up stocks to keep the prices up (Japan has done this). Think of the implications.

It goes back to the monetary system and what we have today is not money but currency. It's engineered for failure and always has been.

This means the consumer is dead and with it, the commercial gun industry. If the consumer does not have the ducats, then the guns won't be selling. If we're lucky, the industry will revert to other consumer goods that are produced in China. There is a precedent for this like Winchester made planes, axes, hammers, etc. Back when I was visiting the gun factories in the '90s, Ruger (Pine Tree Casting) was also making golf club heads and S&W making turbine parts for engines.

Want to learn more why it will fail? Watch this and then the whole series. What took me years to learn he explains in some simple videos.

https://youtu.be/DyV0OfU3-FU

You'll learn the difference between money and currency.
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Old March 4, 2020, 12:37 PM   #21
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Gary, do you think there will be a temporary uptick in gun sales as this sudden turn of events has caused a resurgence in prepping?

I kinda think most people who were going to buy a gun has already when the availability and prices dropped.

My gun buying ground to a halt when those new Washington gun laws were enacted. Mainly because I haven’t taken the time to understand the new requirements, and already satisfied with most of my weapons. I also have a good supply of ammunition.
I have a good amount of non-perishable food and have recently become an empty nester.
I have no need to do anything really with this panic going on in Washington state. But there is a panic, and people going to routine family practice appointments and finding the staff suited up for the first time is causing a lot of people to worry, among other things.
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Old March 4, 2020, 01:18 PM   #22
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Food comes first rickyrick. People will let car repairs wait and even let their mortgage go to put food in their stomachs or feed their kids.

Water is next. I'd rather use a water filter than buy bottled water. There is no "standard" for bottled water quality but I do know that while California has its water rationing, Nestle gets to pump out as much as it wants to bottle and sell to the public. Golf courses also get to water their lawns. A good water filter is #2 on priority. No water, no life.

I think guns are important so as to allow you to keep what you have and protect yourself and your family. Historically, those who don't, loot. Anna Eisenmenger mentions the farms being raided by city people in her book, Blockade: Diary of an Austrian Housewife. https://archive.org/details/Blockade...Woman1914-1924 In answer to your question, if there is money left, people may buy a gun for self-defense.
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Old March 4, 2020, 05:44 PM   #23
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Interesting, you certainly put it all in a good perspective.
This recent series of events has some odd aspects to it though.

I think the firearm market has passed its heyday as it seems pretty saturated. As time goes on there will be declining interest in firearms, many locations will face more restrictions.

I kinda feel that eventually, the market will be fed by firearms that were bought in the recent panics by people who really didn’t have a true interest in firearms.

There’s a whole bunch of unused ARs tucked away somewhere. I think those will start turning up, driving prices down further.

Last edited by rickyrick; March 4, 2020 at 05:50 PM.
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Old March 4, 2020, 07:18 PM   #24
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I don't think there is a recession that is looming. Rather, we're on the precipice of the Greatest Global Depression which will see the greatest wealth transfer in the history of humanity.
Rate cuts as a solution to a public health crisis support this assertion. On a micro and a macro level we've become addicted to debt that does exist and wealth that does not. There might be an additional round of panic buying, but IMO serious shooters and observers of the world have what they need already.
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Old March 4, 2020, 08:11 PM   #25
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Hopefully we will finally realize that having most of our goods coming from China puts us at risk. But I think we are too far entrenched in dependence on China. China could bring the US to its knees just by shutting off our supplies alone... not even accounting for financial stuff.

Interestingly Wish sells AR accessories. I haven’t bought any though.

I’ve gotten some decent electrical equipment from Wish as well. You just gotta wait for it to arrive from China.
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