Another "what if" thread. Buying plans for an economic downtur

[tricky9914]

Although, I am not sure if I am sold on the "great reset" theory, it is very likely we are headed for a significant economic slowdown in near future. The feds are raising the interest rates which is sure to slow down the inflation we've been experiencing over the last couple years. Now, the past two years we have seen a significant increase in MG prices. Some have even doubled in that time. Are we going to see prices drop back down? Are you guys positioning yourselves to buy when prices are maybe a little lower?

 

I am not as seasoned as many of you. I got into the market in 2016, so I don't know what it was like during the 2008 recession. Do prices on MG's tend to hold, even when the economy is slow?

Anyway, just thought it would be an interesting topic of conversation, and I'm interested to hear from some of you who have been here long enough to see how the market has changed through economic ups and downs. Thanks for sharing!

Edited June 20, 2022 by tricky9914

[Ryo]

If there is a dip I'd look into buying buying but I don't forsee that much of a dip in value.

If a person is hit hard on the recession sure I can see some good prices since they are forced to sell when people have less liquid cash.

 

Note that this is only an opinion..

 

For grins I looked at Machinegun price guide and the higher end priced guns did dip a little in 2008-2009 but some just flatten out during that period.

[Got Uzi]

If you have money you don't need I'm sure I could find ways to help you invest it.....In all seriousness though, there is going to come a point when MG's will top out as far as investments go as there will be a very small number of those who will be able to afford them. Lets face it-those dumping big money over and over again at the big auction houses are driving up the matket and causing MG inflation as they are wanting solid "investments" I have a feeling at some point that bubble is going to busrt just like it did with the DotCom's and housing/land. I could be completley off base with this thinking but I don;t think so. I've seen it happen with antique gas engines, tractors, cars, and so on. Prices are driven up then no one is around to buy as everyone has cashed out at once.

[Sandman1957]

However, there are some investors buying machineguns to hedge their accounts. They know machineguns hold value while the market rocks back and forth on stocks and bonds etc.

[johnsonlmg41]

I got in in 99. I collect and invest depending on the gun and timing. I buy all the time strictly based on my personal perceived value, which doesn't necessarily follow what I see in pricing on internet gun boards. In 2008-2012 a lot of guys, mostly shooters, got out. They were smaller players with high debts and cashed out. Some got hosed, many broke even or made a few bucks, but needed to liquidate. Lots of guys were buying on HELOC's and credit and along with their house they never owned, the guns went too. Like anything else a lot depends on the seller, the item, and the time frame. Priced right guns are instant cash, better than most other assets on par with silver/gold/ and other tangible assets that liquidate quickly.

 

Because of the artificial government created miniscule size of the MG market, it is somewhat sheltered from a lot of other market forces other asset classes are subject to. The long and short, the more common the item, the bigger the drop percentage, just mathematically because more guys put more on the market in the lower pricing tiers with a still fairly small buyer pool, because those entry buyers were often on the fringe in the first place, now they are economically pushed out.

 

If push came to shove and I needed to liquidate, I have a pile of stuff I'd get rid of, but the stuff that was the hardest to come by (not necessarily the most expensive) would be sold last and likely not at all. The number of capable buyers in the US FAR exceeds the tiny amount (value) of MG's. The only question will be the interest level of potential buyers, not the money. Unlike vintage cars, tractors, real estate, etc. guns store easily and compact, don't require maintenance, have carrying costs, annual fee's and taxes, For instance I put two HK sears on my keychain and waltzed them through the airport. Try bundling 60K in your carry on or in your pocket through security?

 

The long and short is, some stuff will drop (relative to inflation), but quality tends to hold better like every other solid quality asset class.

What happens to bitcoin miners? I suspect they go the way of pet rock miners in the 70's. Initially they made a fortune, but in the end some people found the rocks in their yard were as common as the fake coins in their fake wallet in their own computer? LOL

 

The particular key to understanding the current/ future economic conditions is that this situation is not based on outside uncontrollable influences, but is being orchestrated to pick winners and losers and is thus more predictable to assess, similar to 2008 that was also orchestrated. At that time I was not experienced enough to figure it out.. Live and learn. Those are my experiences.

Edited June 24, 2022 by johnsonlmg41

[Roland the Thompsongunner]

I agree with the above post and have been thinking along those same lines lately in reference to other investments. I have a few older cars and its to the point where I am a slave to take care of them, maintain and pay insurance and registration. Thinking of dumping some and buying up some more MGs. Oil it up and put it in the safe and it costs nothing and takes up very little room.

[AlexanderA]

People buy and own machine guns because they like them, not because they're "investments." Sure, they might tell their wives that the values go up, but that's a mere justification. The reason that machine guns are lousy investments is that they're illiquid. In no other investment do you have to wait months for a sale to be completed.

 

Regarding an economic downturn, I don't think it will affect the MG market much. The people that collect machine guns are probably in the top 20% in income and assets, and are able to ride out economic hard times far better than most.

[Got Uzi]

I can tell you Im not in the top 20% .......maybe the top 65% LOL I just work my ass off to get what I got.

[Roland the Thompsongunner]

I agree with Got Uzi I am no where near the top I sold lots of stuff off and worked hard for the few I have

[tricky9914]

Also, many, MANY MG's are in the hands of people who bought them years ago at much lesser prices. I have a feeling many of them liquidated their collection over the past year or two lol

[johnsonlmg41]

People buy and own machine guns because they like them, not because they're "investments." Sure, they might tell their wives that the values go up, but that's a mere justification. The reason that machine guns are lousy investments is that they're illiquid. In no other investment do you have to wait months for a sale to be completed.

 

Regarding an economic downturn, I don't think it will affect the MG market much. The people that collect machine guns are probably in the top 20% in income and assets, and are able to ride out economic hard times far better than most.

 

Not liquid? You may wait months for a transfer to take place, but money can be exchanged within minutes. No different than real estate or any other firearm. I've done quit claim deeds in a parking lot and gotten a check on the spot, but the deed transfer takes months because government is involved. Machine guns can be done the same way in some cases.

If you have to justify it to your wife, you're already not in the market.

 

I find that most MG owners are probably not in the top 20% of income, depending on how you classify income. A large percentage of them are retired with relatively low incomes. You're aware that Jeff Bezos only draws a salary in the mid 80K range and got stimulus money for him and his kids? LOL

[maxfaxdude]

Gotta agree with Johnson on both posts...machineguns, in my experience, are very liquid. And in many cases, the money is all up front. The best of both worlds for a while, because you've got the buyer's money and the gun. And there are tax advantages.

 

Bottom line is that everything you buy is an investment (so to speak) and many things have a negative rate of return. Historically, the rate of return has been excellent for machineguns.

[runt]

Reading up on the top 20% of income earners I found to make this cut off you need an Adjusted Gross income of just under 100k. I would guess most people that can feed their machine guns (not to mention the initial purchase) have hit that threshold.

[Thumpy]

Im 26 Ive been buying mgs since I turned 21. I dont look at them as investments I shoot them I worked very hard to be able to afford these. Few months back I bought a 1921 Colt Thompson knowing that our economy was on the decline but I didnt care. I bought the gun for the gun. I wish more folks in the NFA world also did this. If the NFA market drops with the stock market Ill be able to buy more mgs cheaper if it doesnt o well Ill still buy more mgs. These are expensive toys not investments.

[Countryboy77]

Shhhh Thumpy! 'Investments' is how a lot of us justify the hobby to the Misses.Even if they dont like guns they love money and investment success.

[Got Uzi]

True but for all the guys saying repeal the NFA so they can buy into the MG market, are the seeing the effects of the guys with money buying up for investment purposes and have inflated the market drastically. While they might be good investments, Ive been cashing in on some of my stuff as I see a market shift coming, that and with the way prices have skyrocketed, I cant justify having that much tied up in NFA.