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How safe are machine guns as an investment?


johnson184
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I would not think of any Class III item as an "Investment" - many society whims can influence your investment. Just look at real estate, over time you have been well rewarded. But how many folks purchased at the most recent peak 2008 and are still under water. However just like MGs they ain't making any more of it.

 

- A house is a home where you raise your family. You have to live somewhere and better pay yourself then a land lord.

- - High closing costs, high commissions/markups and sometimes difficult to sell.

- Firearms, and MGs, are toys to enjoy a hobby. Hobbies should not break the bank and cost you an arm and leg to enjoy.

- - I have debated to myself, do Firearms Rentals fill the Millennials Experiential philosophy? Is that why we have seen a decrease in the value of Collectables. Anybody attempt to sell your mother's or grandmother's China, Hummel's, or family heirloom?

- - Is this the reason why once valued collectable O/U - S-by-S shotguns or classic hunting rifles now collect dust at the local gun stores.

- - Are the cheap black guns, (GLOCK, ARs, plastic stock shotguns), become the new firearms norm; that just depreciate to zero with time and are disposed of?

 

Investing required a well diversified portfolio of assets. Some cash, stock, bonds, and tangibles (real estate, precious metals, and collectables). The mix is dependent on your disposable income and total; net wealth. One or two machineguns that represent 25% of your total net worth is lot's of risk; just like owning one stock, GE for example that has done nothing but go down since Trump was elected, or owning a single piece of real estate that burn down or has no renter for months.

 

If you are looking for an investment, try a nice index or age based mutual fund. If you want a Machinegun, buy a Colt M16.

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  • 2 months later...

If investment was your plan for purchasing a Class 3 firearm you should have invested in the 70's and 80's.

 

They said in the 70's and 80's that if investment was your plan, you should have invested in the 40's.

Eric

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I personally would not buy any MG as an investment. It is just too risky. The ones that I have bought, I have bought because I like them and they are like works of art that I can look at, fondle, enjoy and shoot. I think one day in the not so distant future we will have what they have in Canada now which is that the registry will be frozen and you can buy or sell only to other licensed collectors. I think we will also have a maximum capacity of ten rounds one day just like in Canada. Don't invest any money in toys that you can't afford to lose. My two cents. Haenelistklasse

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Works of art go up in value as do machine guns. I doubt people lose money in this hobby. I also think, barring a true nfa incident, that we are more likely to see waiting and background check times rise for semi autos while nfa ownership stays under the radar.
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  • 4 months later...

They are not a very liquid asset unless its an M16 or an MP5. Both sell quickly if priced right. With prices so high and approval time so long it can take quite a while to dispose of an MG collection. I know first hand. Over 3 years now and still haven't sold them all. Getting up there in age and don't want leave my wife with the hassle of trying to sell them. :(

Edited by samnev
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Samnev,

totally liquid. I sent you a PM and could buy out the remainder of your collection......problem solved. I do all the paperwork and payment up front, you could be out of it in a week or two financially and a few months paperwork wait to move it physically out.

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  • 2 weeks later...

Machine guns are actually a rather poor monetary investment. There are many machine gun ownership cost factors - factors that the machine gun owning enthusiast sometimes fails to recognize and address - that detract from the investment value of machine guns. Such expenses as, and not necessarily limited to: ammo cost; wear and tear on gun parts; added fire and theft loss insurance as an additional rider on their home owners insurance or as a separate policy; the cost and bother (especially an issue with belt fed machine guns) of trips to a suitable (i.e., full auto and often caliber accepting) range and if one is using one’s own property, the initial cost, plus on going taxes, insurance and other upkeep costs on the property; gun club/range membership initial fee and continuing dues if one shoots at such a venue; and opportunity cost of otherwise investing the funds used to purchase the machine gun. Meanwhile, with other investments such as stocks, index funds, certificates of deposit, bonds, etc. the ownership expenses are relatively low. Of course there are some machine gun enthusiasts with safe queens that they enjoy for what they are regardless of strictly monetary value, so their ammo and wear and tear costs may be minimal.

 

Specifically regarding ammo cost. Take a SWD M11/9 with a Lage MAX11/15 upper as an example. The M11/15 has a projected cost of a little over $3000 with shipping. Assume XM193 5.56 ammo at $365 per 1000 rounds, not taking into account that cost can be reduced somewhat by reloading, and also assume a rate of fire of 700 rounds per minute. A shooter will spend the entire $3000 cost of the MAX11/15 with less than 12 minutes of time on the trigger turning ammo into smoke and noise. While you can reduce the ammo cost somewhat by reloading (keeping in mind that open bolt, pistol caliber submachine guns may be destructive of brass than closed bolt firearms), that does not do much to eliminate what is probably the largest single expense of long term machine gun ownership; or address any of the other above noted machine gun ownership related costs.

 

MHO, YMMV, etc.

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  • 4 months later...

Firearms as investment, just like other investment, being good or not depends on acquisition price. But that's just one side of the coin. Another more important factor is this: you'd better control your total investment on your whole collection. Ideally, your total input on guns should NOT be more than 5% of your total asset. If that's the case, even if these stuffs' value drops to zero due to various kinds of reasons, so what? You won't worry because that's only a small portion of your property.

 

It's a hobby. That's just my 2 cents on these.

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Return to which ones to "invest"... that's personal taste. Personally, I had some interest on European and American made C&R MGs, such as Thompson M1A1, Grease Gun, MP40, MG42, STEN, Sturmgewehr, Schnellfeuer, etc. Original ones only. No interest in DEWAT, reactivated, tube gun, side plate, refurbished, etc. Not really because those are good investment (almost none of them are due to their high price nowadays), but I like those more than other types. If I spend my money, I spend on those.

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In today's world, "Investment" is nothing more than gambling pure and simple. False valuations everywhere from the rigged stock market to absurdly priced real estate, to tulip bulb priced #*@!coin, hows that going for those getting in at the top? Step up and roll the dice young man, nothing can go wrong. If you don't love collectible firearms don't buy them, we are in uncharted waters, anything could happen.

 

MH

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Just read news, a professor of Standford University jumped out of window from 9th (or 19th?) floor of a building and killed himself on Dec 5th, 2018. Rumor says the guy being an expert on crypo currency and running a business on trading those. Recent deep drop of price on those digital currency put lots of pressure on him, he could not bear it, so he ... you know. He played beyond his capability.

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Based on history, pretty much any transferable machine gun would have been a good investment. Obviously some better than others. But there really haven't been that many registered MGs that have gone down in value just from sitting there in the safe.

 

The only thing I can see that will change that is a law that either opens up the registry (allowing much more supply, so demand goes down) or a law which says you can no longer transfer MGs (directly killing demand). The first one, I think has about zero chance of happening. The second one actually has happened. This is how the machine gun ban in canada works. They didn't grandfather the gun, they grandfathered the person. They have an ever shrinking number of people who are allowed to own the "prohibited weapons", so no ridiculous prices like we have on our side of the border. So, there is some precedent for a type of ban that would kill the investment value for MGs. But given that the laws regarding restricting NFA items change like once per generation, I would consider that a small risk of actually happening.

 

The last recent proposed gun ban I saw that dealt with the NFA was actually wanting to add more items to it (effectively making AR and AK pistols NFA items) and jacking up the price of a tax stamp to like $500 and have it raise with inflation. At least for the time being, at the federal level, the gun grabbers seem to be still embracing the NFA. The individual state level bans are a different story, but luckily there are 50 states.

 

I would feel confident that if you went out today and bought pretty much any transferable MG that still functioned, you have a very low chance of losing money on it.

Edited by giantpune
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this is why i have a trust...if this were to happen it could go 1-2 more generations.

 

in stead of buy back they just leave them rot with the original owner.....problem is who to put in jail when they go missing after his death as im sure many would

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I can foresee a massive increase in the scope of the NFA, as a way of virtually outlawing semiautomatics without having 5th Amendment compensation issues. If that happens, the distinction between machine guns and semiautomatics will become blurred into insignificance. In this scenario, it would be far more lucrative, percentage-wise, to have invested in semiautomatic AR-15's than in machine guns.

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As someone pointed out, it depends on your basis cost? Here's the invoice for the guy before me, and as you can see, he made out pretty well?

 

Yes. The cost was important. I had the original receipt of a machine pistol (http://www.machinegunboards.com/forums/index.php?showtopic=22733). It cost the 1st owner about $120 in 1960. Registration stamp cost another $200. So the total cost was $320. If using gold price as a measure, gold was $35 per ounce in 1960s, so that's 9.14 oz gold, roughly $11k in current dollar. Although I doubt old $320 being as serious as $11k of today, but that's one way to estimate the cost. The value did increase though, it cost me more than $11k when I acquired it, but the "real gain" was realized after **half a century **. If viewing from this time frame, the rate of return was actually very poor.

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