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Profiting from "Mass Hysteria". Forget Gold, Silver, Stocks, Real Estate etc...

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April 20, 2009 – Comments (8) | RELATED TICKERS: SWHC , RGR , OLN

FYI- I have been away playing poker and taking some classes. Since the random dropping of accounting standards and the criminal support of a $700 billion check given to GS (via Hank Paulson). I have been investing more in hard assets. Finding hard assets at reasonable or fair prices takes time.

By now Fooldom knows the best wealth protector over the last decade has been. Unlike housing, stocks, gold, silver it keeps climbing up, up (I like gold also) with out a breather AND IT IS NOT A CROWDED TRADE, yet.

I went to the "local stock market" on Saturday. Prices are up 100-300% over the last decade. But problem is NOW there are shortages. I could be more exact YOU CANNOT BUY IT or FIND IT, there is a panic and there has not been a ramp up of production, yet.

AGAIN, DO NOT BELIEVE ME GO CHECK. Unlike, GS, WFC etc where you you cannot fact check. I have NO IDEA what most financials are doing, neither do you. Here is accounting you can confirm easily, which IMHO makes it a more logical choice of wealth protection. If you are planning on fleeing the US, (I think problems will be worse else where) physical gold is the logical choice, if you can get it out of the country.

If you are staying in the US a logical choice of asset class given the Keynesian / Zimbabwe/ banana Republic economics recently presented is...altogether Fools... on the count of three...you know the answer here...it is easy to confirm...1...60 Minutes just broke the story...2..the stocks are climbing also ...3 ALL TOGETHER!

GUNS and AMMO!

PROFITTING FROM MASS Hysteria

Quote me "you will not be able to find ANY ammo in six months"

You cannot find: 380, 9mm, 38 Special, 357MM, 40 Smith and Wesson, 45 ACP, 7.62 now.

Gun nuts, call me out or help me here. Again, I am not a gun expert.

Additionally, you cannot find primer or powder. Most people are buying due to fear of taxes etc.... I am more on the thought process of Jim Rogers and Marc Faber. Yes, it might be taxes now. But you will need a guns/ammo when the "old fashion" cure to Keynesian excess and the population begins civil disobedience begins in earnest. You now have record numbers of employed, disenfranchised men globally. Do you think they are going to sit around and starve with out violence? Or do you think that man will return to his nature of preying on the weak?

Either way, guns and ammo have been the best asset class over the last decade. My guess is they will be the best asset class going forward.

Anyone who makes or sell AMMO is a STONG BUY for the next decade. Unless the law and taxes intervene to slow/stop this investment, which they will.

 Disclosure: I am long SWHC. As for guns and ammo purchases, ensure you follow the law and consult the rules in your state and local government. FYI - I saw a guy arrested at the gun show. Not sure what he did, but that is the last thing in the world you want, is to go to jail for gun related activity. Again, gun nuts please help with this post. I am outside of my element on any deeper gun discussions. Thanks you in advance.

8 Comments – Post Your Own

#1) On April 20, 2009 at 10:26 AM, kaskoosek (85.41) wrote:

Abitare

 I agree with you on most of the points except the civil unrest thing.

 Yes the US is going to become a bana republic, but I  do not hink there will be open warfare. The proof in my oppinion is the 1930s depression.There wasn't that much unrest.

 

Looking at the financials of these arms companies, they are not that much overvalued. Thought of shorting the stocks because of this bubble, but decided not since the premium is not that high.

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#2) On April 20, 2009 at 10:35 AM, abitare (93.63) wrote:

 kaskoosek,

Very good reply. I am short of time, now so I will reply this week and try and address your reponse.

Truth is the people in the 20-30s were far different then the people today. There were far more local industries and local farms etc.... People showed up in the soap lines in coats and ties. Kids today, look like gangsters going out on a Saturday night. It will be a lot different, this time, also the US population has nearly doubled. 20% of 120 million is a lot less then 20% of 240 million. Plus the sense of entitlement and lack of savings will be a problem.

Most nations never, planned on open warfare. I am not saying that here. But I know that when the Four Horsemen ride, most people are surprised.

Also, what is America taught about what eneded the Depression?

WW2.

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#3) On April 20, 2009 at 10:48 AM, madcowmonkey (< 20) wrote:

The last thing in the world I want is to go to jail for a gun related charge:) Come on, I could think of at least 357 other things that I would want less than that one.

I was just at the store the other day (in the bread aisle) and could  have had my choice on any of the ammunition you listed:) It sure is nice to live away from civilization.

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#4) On April 20, 2009 at 10:57 AM, 4everlost (29.63) wrote:

All your investment logic makes sense to me, but IMO you could not survive the first round of reloading.  I mean, unless you had a well stocked cache of weaponry, ~10 comrades in arms so you could protect your entire perimeter and assistants that were constantly reloading for you the masses would overrun you after your first magazine. 

 

I recently visited a friend who just bought a .50 caliber rifle.  It’s an amazing piece of equipment.  It has folding legs attached to the barrel and a scope that you can use from up to 1000 feet away.  The shells are ~ 6” long and ¾” in diameter.  You can really only fire it while laying on your stomach.  I never got to fire it but he uses it for long range target practice.  It is, for all practical purposes, an assassin’s rifle.

 

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#5) On April 20, 2009 at 11:31 AM, dudemonkey (37.14) wrote:

Are you seeing the weapons being stockpiled for use against looters or against the government?  The US military has spent a lot of the last 4+ years relearning how to fight in an urban environment against an enemy that can blend in with the populace. 

I definitely don't discount your analysis.  I just really really hope you are wrong.  I don't want to be here if you are correct.

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#6) On April 20, 2009 at 11:56 AM, FreundInvesting (29.59) wrote:

Abitare:

I took a home firearm safety class this weekend, provided by the NRA. They confirmed your thoughts on skyrocketing ammo prices. I met a guy who's actually collecting brass from gun ranges and producing his own ammunition. He told me the machine costs around $900, and that he can get the price per 9mm round down to $0.10; at Wal-Mart (IF YOU CAN FIND ANY) it's around $0.50 per round. Quite a good margin!

Regards,

Ryan

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#7) On April 20, 2009 at 2:04 PM, Donnernv (< 20) wrote:

Abitare:

I just bought 1000 rounds of .223 from MidwayUSA.  FMJ is about $0.50 per now and it's hard to find.  But it's still available if you Google it.

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#8) On April 20, 2009 at 9:55 PM, Harold71 (22.32) wrote:

Ammoman.com

New shipment of 9mm ammo -- 1 Case Per Person PLEASE, Gone in 48 hours

New 7.62x39 HP  -- 1 Case Per Person PLEASE (Slow down on giving us money anytime, haha), Gone faster than you can read "Add to your shopping cart."

They raised the price of 7.62x39 ammo $50 per case from last time, which was already raised $89 from the previous time I checked.

Yes, it is crazy out there.  I have been a "gun nut" (not afraid of the label myself) since I was 12 years old.  But I have a lot of mixed feelings these days.  Shortages and 60-70% price hikes aren't great.  Fear of shortages is leading to more shortages.

I think ammo has mostly outperformed gun prices.  You can still buy a glock for the same price as in 2001.  A Ruger 10/22 is likely more representative, up from $140 to $200.  I would say gold has performed better than many guns.  Probably not NFA stuff though.

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