Are we experiencing a "Gun Bubble"?

[Skans]

Firearms companies are raking in the profits. They couldn't be doing better. New guns, used guns, it doesn't matter. People are paying over a thousand dollars for beat up old Pythons. Colt SAA 1st Generations are now several thousand dollars even in fair condition.

Machineguns are now for the uber-rich - the prices have gone almost straight up since 1986.

People are buying Hi-Points as fast as they can make them. Ruger can't keep up with demand. One-hundred year old guns, like the 1911 are the rave.

This has been going on for over 4 years, perhaps longer. I can't help but think we are in a Gun Bubble. Does anyone else see this? Or is this the new reality?

[Fishing_Cabin]

I tend to agree that we are in a bubble of sorts... Yes, there are people that are buying their first firearm, and will hopefully continue to own firearms. There is a steady demand from long time firearm owners buying new firearms as well. What I have seen the last few years is that people are buying in bulk just in case "this" or "that" is banned in the future. I also see many folks banking on how firearm prices will always rise, though I dont think it is true. I think there is a leveling off spot, or possibly a downward trend coming in 4-10 years. I think this possible future downward trend is why many companies are holding back on expansion because the cost may not be paid back before the tide turns.

I have been involved with various hobbies over the years, not only firearms related. Most people start off, "oh this is cool!" then they tend to fade out of it in years to come. Its rare that a person stays way active in a certain hobby they try, and there are always a few that pick up something and tinker for the rest of their life in it too. Tons of folks try something new as far as hobbbies, time will tell how long they stay with it, and in what way.

[animal]

I’ve been thinking "bubble" for years, but there’s only been a few times when it deflated a little … and those times were just a tease before another increase.
(This coming from a guy that says a Chinese SKS is a 75 buck gun and there ain’t an AK-47S on this planet worth more than 500 bucks. A Chinese MAK90 ought to be 200 or Tso ..."generally" speaking)

Then again, the dollar is a much bigger "bubble problem", and I suspect that guns prices might be a better indicator of "real value" in the dollar. My SKS is still worth only 75 bucks… and so is the $225 cash in my pocket.
It might be interesting to compare gun values relative to gold and other durable commodities over the past 20 years or so… ‘course, most would just call me a bubblehead for even thinking this way.

[TXAZ]

I'd vote for the bubble. If a pro-gun rights candidate were to become elected and much of the financial fear were to be eliminated, I expect overall weapons prices and ammo in particular will fall, allowing for the overt coming inflation in the West.

[bn12gg]

Might we have a gold bubble too? Stock market over cooked as well?

It's nice to see the firearms industry doing well. Housing coming back?

Before it all goes away, I've decided to spend a bunch of money I have in
CD's on my youngest's college education. It seems like a safe investment.

It's sooo confusing. .02 David

[ClayInTx]

I believe the mindset of many persons has changed in the last few years and that attitude is not likely to go away.

What happens in November might cause a drop in prices but I’m not betting on it.

Hope for the best but prepare for the worst.

Gosh, had it not been for that tragic boating accident....

[Technosavant]

I'd consider it a bubble if we were talking investments. That isn't the case here.

Firearms can be investments, but that isn't really why people buy them right now. The market for guns has exploded, with many, MANY new people getting into them. I think I would characterize it as a spike in demand more than as a bubble- if it were a bubble, we would be expecting these things to lose value when the bubble pops. That isn't likely to happen, no more than any new item loses value when it is used. If demand drops or supply catches up then prices will adjust, but we're a ways from that point right now.

[603Country]

Gun prices have climbed during a period where folks have less disposable income. If the economy improves, they'll have more disposable income and can spend even more freely. It's my opinion that not all guns, but most certainly some specific guns, will continue to rise in value. It's not likely to be a steady rise, but more of a plateau, a drop, a rise, another plateau, and so forth. My Beretta PX4 isn't going to be worth much more in 5 or 10 years, but my Python and my Diamondback will, as will your 1911 and your Model 29 Smith. And on the 1911's, the upvalue will probably be more on the historically valuable ones, not the newer versions. Again, that's just my opinion and it and 50 cents won't buy you a cuppa coffee. I do wonder what those crappy Mosin's are going to be worth in 20 years.

[BitterTait]

Can't say it's a bubble, but we're definitely experiencing the downside of a "cheap surplus import" resource-peak. Like all resource peaks, they're there, they're not going away, every now and then there's little dips and bumps as additional batches of imports come through and rumors of bans or shortages pass around, but just like the days of $0.87 cents for a gallon of gas are over, the days of $100 Makarovs and $50 Mosin–Nagan rifles are over.

[spanishjames]

I do wonder what those crappy Mosin's are going to be worth in 20 years.

About 22 UN Carbon Credits.

[C0untZer0]

I don't think it's a "bubble" - a bubble in economic terms usually means over-vaulation, or speculative cash - more cash in a sector than is warranted.

If people were purchasing pistols and turning around and selling them - that would be one thing but that's not happening.

Look at the city of Chicago - people who have been denied the right to own a firearm for years and years. There is genuine demand in hte country for firearms.

I have three daughters I have to buy .22s for ... and it will just be the beginning for them.

[Flopsweat]

Originally Posted by bn12gg

Might we have a gold bubble too? Stock market over cooked as well?

It's nice to see the firearms industry doing well. Housing coming back?

Before it all goes away, I've decided to spend a bunch of money I have in
CD's on my youngest's college education. It seems like a safe investment.

It's sooo confusing. .02 David

Inflation. Look up Quantitative Easing. It's the modern day electronic equivalent of printing money. Props up the economy - on paper, but not in reality. The Fed is holding the Prime Rate as low as it possibly can, and we're "printing money" like like it was Wendy's coupons. This causes the value of the dollar to drop (inflation). You can only do this for so long before very bad things happen. You think Obama inherited a mess, you ain't seen nothin'. I'm no economics expert, and this is a bit of a simplification, but we are headed for trouble it we keep this up.

[LockedBreech]

I love the gun purchase wave happening presently and in recent history.

It's true that ammo gets hard to find, rare guns get rarer, and prices rise.

It's also true that each month that goes by with thousands and thousands of handguns, rifles, and shotguns getting into the nightstands, closets, gunsafes, and range bags of lawful Americans, it means gun control is less and less feasible, and the more the resurgent reality of an armed and proud of it citizenry comes to the forefront.

And the crime rate keeps on droppin'.

It's a good time to be a gun guy.

[BarryLee]

...it means gun control is less and less feasible, and the more the resurgent reality of an armed and proud of it citizenry comes to the forefront.

Yes, I believe there is a lot of interest in guns right now and it will most likely decrease some in the future. I suspect a lot of folks that are buying guns will shoot them a few times and stick them in a closet with their tennis racket, golf clubs, skis and other forgotten hobby gear. However, I also believe these people will continue to consider themselves gun owners and realize that is a perfectly normal thing to be.

[LockedBreech]

A great point, Barry.

I recently converted my third friend in the last two years to a first-time gun owner. I helped guide him through his purchase process, steering him toward quality products but making sure he got to make all final decisions.

We took his Ruger SR9 full-size to the range, shot 250 flawless rounds through it - out of the box, with a casual spray of Breakfree CLP, it was impressive.

Now he has cleaned it, lubricated it, and put in a Gunvault in his nightstand, with a magazine full of 147-grain Ranger Ts.

Will he ever use it again? Maybe. He enjoyed it, but wasn't passionate about it. What's important is what you say - years from now, he'll still probably have that gun in its safe and, thanks to my nagging, will take it out from time to time to canned-air spray it and re-lubricate it.

Having one in the house, realizing it's a tool like any other to be put in a drawer for the rare times it's needed, is a critical part of the gun experience that many control proponents are lacking - in my opinion to the detriment of a rational discussion.

But I have hijacked the thread, for which I apologize.

[Gunplummer]

I think people are so tired of being financially scared that they are buying as either an investment or with the thought that they will be unable to later. In this area houses are selling (Pre-owned) pretty fast now. People are just tired of living with the hammer ready to fall. I am getting up there and want to move to a smaller place, so the last 2 years I have been selling off. I had 4 gun/parts auctions and one auction with over 300 bows and accessories. If times are bad you could have fooled me. I could not believe the prices that even the low end stuff brought. Right now it is a "Bubble" for Para-Military guns. I can see the "Black guns" are starting to level off some already. What the other spending is, I don't know.

[NWPilgrim]

Not a bubble. A new reality.

[Master Blaster 2]

I feel that more new gun owners are getting into the sport. They buy one gun then that sparks interest and soon you have 5 or 6. So many new people that demands are up. This also includes used firearms. Used firearms are harder to find even with the internet. Less people selling.
It is an addiction hobby. At least it is for me.

[Double Naught Spy]

And what if we are in a bubble? How does classifying the gun market as a bubble help us?

[danez71]

About 22 UN Carbon Credits.

Thats funny.

[spclPatrolGroup]

Maybe collector quality firearms are going up in price, but every gun maker seems to be comming out with better and better quality for less $, like the savage axis or ruger american rifles. The mid to lower end of the spectrum is really seeing the bennifits as gun companies needs to become more competitive to the entry level shooter, and that is a good thing.

[oneounceload]

Firearms companies are raking in the profits. They couldn't be doing better

Based on what? Fuel prices are high, insurance costs have gone up due to OBcare, utility costs have risen.......I seriously doubt anyone is "raking" in the profits - it you believe that, I guess you also believe in "Big Oil raping us at the pump"

This is no bubble - it is what they cost based on raw materials, manufacturing costs and all of the ancillary related costs to get the product to market and gain marketshare. How many gun mags are there now? Buying a full color page ad in each one gets expensive, especially when most are owned by one publishing house; then there is on-line advertising.

Guns costs what they cost - if you think we are going to be buying guns at 1950's prices based on 21st century salaries, it isn't happening

[Auto426]

I wouldn't doubt that there is a bit of a bubble forming. Comrade Obama drove the market insane when he was elected for his first term, and with a possible re-election on the horizon and more talk about new guns laws people are starting to do the same thing they did last time he entered office.

I can't help but also think that he probably did more for our hobby than anyone else. His election drove people that had little or no interest in guns to go out and buy one because they thought he was going to make guns disappear. That probably created more than a handful of new shooters who share our same addiction, as they realized that guns are evil and can be quite fun. The economy is also partly to blame, as tough economic crimes usually increase crime which encourages more people to buy guns for protection.

However, when it comes to things like Pythons, 1st Gen SAA's, and registered full auto weapons, I don't think we will ever see prices come down. There's only a finite number of those guns out there, and it's all too easy for someone to blow one up or get it confiscated by law enforcement and take it out of circulation forever. I believe what we are seeing there is the effects of inflation and an larger shooting population than what we had in years past. Demand goes up, value of the dollar goes down, and suddenly the price for those rare collectibles seems to skyrocket.

[BikeNGun1974]

No, this is not a gun bubble.

A bunch of people buying something does not automatically make it a bubble. If that were the case, then there was a Cabbage Patch bubble, a Pet Rock bubble, and lots of other bubbles in history.

A bubble means that people are buying something (usually things of volatile value like stocks or property) expecting to make a future profit based on its currently climbing value. It is usually followed by some sort of burst where the commodity in question suddenly drops sharply in value. It also implies some form of investment value to the item.

Granted, most bubbles are driven by uncertainty, but no one (ok, very few people) is going to lose their life savings because they invested their money in a safe full of MP5's and M-14's, thinking they could sell them to retire, and their price suddenly dropped.

At best, it's a bunch of people buying because they are afraid that they won't be able to in the future. That's not a bubble. That's basic supply and demand in action.

[BlueTrain]

Okay, then, just how much did Smith & Wesson make last year? How about Colt? Rounded to the nearest thousand is good enough.