SITREP: DECEMBER 2003

by Dan Shea

There has been a lot of talk again about machine guns as an “Investment”. It is starting to become somewhat scary, getting phone calls from people trying to “Invest”. We are still trying to find the copy of Forbes magazine that supposedly listed them as the number two investment producing positive results. If anyone has a copy of that, please fax me a copy of the relevant pages or email the volume and issue it was in.

I don’t want to hurt anyone’s feelings on this subject, nor do I want to say they are not a good “Investment”. What I really want to say is that they are not an investment at all. The word “Investment” implies safety in your purchase, some guarantee of return on your money. There is no way that machine guns meet that definition.

Neither do stocks as purchased by most people. This is all “Speculating”.

“Speculating” means that your money is at risk. All of it. Witness the sad losses that so many Americans recently had in the stock market crashes. Some people made money, of course, there are always some that do. A friend of mine was shorting the techies all the way down, and he cleaned up, then bought a bunch of transferable Curio & Relic machine guns. Smart guy. He always seems to be on top of whatever will make him money.

However, he is still “Speculating”. He could lose his money.

Why am I so negative? I sell machine guns, I make a living selling machine guns for profit. I have my own collection, whose value keeps going up. It would be to my benefit to continue saying “Hey, this is a wise investment”.

The facts are irrefutable, machine gun values are going up, and up, and up. They have been for thirty years or more. J. Curtis Earl used to have a chart he used to sell his guns with, that was in his marketing literature. Many people who bought guns from him at what were then considered some of the highest prices in the market, have made ten or twenty times the money on the guns they bought. Most of the people reading this magazine have seen the value of their machine guns increase, sometimes drastically. This is all true. No question, a number of people have made a lot of money by sitting on machine guns then selling them.

Note the “Selling them” part. In order to make a profit, you have to sell the item. Most of us who purchase something, perhaps an M16A1 Colt, might have paid $5000 for it two years ago. Today, at $9000 plus, you really did well. However, you have to sell it to realize that profit. That means you don’t have the M16A1 anymore, and you have to pay about what you sold it for to replace it.

Here’s my advice: Buy guns you want, and enjoy them. Shoot them, polish them, clean them, study them, buy all the accessories, meet with other shooters and collectors to enjoy the guns. Sit back and be pleasantly surprised at the increasing value. If you want to make the money, sell it.

What if there is a major change in the market? What if there is a major change in legislation that increases taxes, or an amnesty that opens a new pile of guns for ownership and values drop? Status quo is what keeps the prices going up. There is an artificially finite group of transferable and pre 86 dealer sample machine guns. There can’t be any more. There is an increasing pool of potential buyers, and many have increasing incomes. This is a recipe for values reaching plateaus, then going up again as interest hits different models. I don’t have a Chatellerault 1924/29 in my collection, I figured they would always be a “Cheapie” so I decided to wait. Now the prices on these have gone up as well.

The point? Buy what you want, when you want, because you can afford it and you like the machine gun you buy. If the price goes up, be happy, but don’t put the mortgage money or the kid’s college fund into machine guns thinking that you will “Grow” the money. No, I say to put the mortgage money and the kid’s college fund into machine guns because someone was crazy enough to let a machine gun collector near these supplies of cash, and the new M60, well, you just had to have it.

– Dan