Armory Sponsor
Posted: 6/5/2013 5:31:19 AM EDT
|
I am curious what the average rate of return has been on machine gun prices in the last 20-40 years. I realize that prices have gone up in that time, but I dont know what the prices were in the past (which is why I cant figure this out myself). Does it outpace inflation? What about the stock market?
I am mainly concerned with the "usual suspect" low- and mid-level transferables (ARs, HKs, AKs, M11, Uzi, M2, Sten, AC556, etc...). |
|
Look this website. http://www.machinegunpriceguide.com/html/price_guides.html Also note that with one swipe of a pen the ban on machine guns can be reversed and your M16 goes from $15-25K down to about $1000. |
|
Quoted:
Look this website. http://www.machinegunpriceguide.com/html/price_guides.html Also note that with one swipe of a pen the ban on machine guns can be reversed and your M16 goes from $15-25K down to about $1000. or they can go from $25k to $0. Not very liquid, either |
|
Quoted: Look this website. http://www.machinegunpriceguide.com/html/price_guides.html Also note that with one swipe of a pen the ban on machine guns can be reversed and your M16 goes from $15-25K down to about $1000.  Keep dreaming! |
|
Quoted:
Quoted:
Look this website. http://www.machinegunpriceguide.com/html/price_guides.html Also note that with one swipe of a pen the ban on machine guns can be reversed and your M16 goes from $15-25K down to about $1000. Keep dreaming!
Exactly. A complete ban on transfers is more likely. |
|
Quoted:
I am curious what the average rate of return has been on machine gun prices in the last 20-40 years. I realize that prices have gone up in that time, but I dont know what the prices were in the past (which is why I cant figure this out myself). Does it outpace inflation? What about the stock market? I am mainly concerned with the "usual suspect" low- and mid-level transferables (ARs, HKs, AKs, M11, Uzi, M2, Sten, AC556, etc...). I bought my Colt M16A1 in 1994 for $2k. The same dealer had an unfired SWD AK conversion for $2k, an NIB Ruger SS 556k for $1.2k, a C&R STEn for $800 and a Maremont M60 for $3.5k. He was dropping his SOT and told me he'd sell 'em all for $7.5k total, and I passed on it. 
In 2003, I bought my NIB M11/9 for $1.3k and my NIB Vector uzi for $3.7k. What are they worth today? I don't buy MGs as investments, I buy them to shoot. If they became worthless tomorrow, I would still be glad I bought and enjoyed them, and shared them with my sons and friends. But their value has done better than my other investments over the last 20 years. Your Mileage May Vary. |
|
Quoted: Quoted: Look this website. http://www.machinegunpriceguide.com/html/price_guides.html Also note that with one swipe of a pen the ban on machine guns can be reversed and your M16 goes from $15-25K down to about $1000. Keep dreaming!Hey, technically what I said is true.  |
|
Machineguns were not worth a whole lot prior to and even up to a decade after the 86 ban. When I first started looking at buying a machinegun around 1997 to 1998 M16s were not much more than a nice "pre-ban" Colt semi auto AR15 and Macs could be easily found for under $1000.
Right after I got into the hobby and purchased my first MG in 98/99 timeframe prices started to rise and there was a dramatic price increase that began in the early 2000s. There were a couple factors in my opinion that held down pricing until a tipping point was reached. 1. The internet educated a huge pool of people about the NFA process and that machineguns were legal. The simplification of starting and maintaining a corporation (to bypass the cleo sig) pretty much made machineguns available to anyone who had the money and werewithal to form a corp or LLC. The acceptance of trusts has even further simplified this process and the barrier to entry. 2. Anybody who wanted a machinegun prior to 2003 could call up Vector and buy a NIB Uzi for $2700. Internet based Group buys were put together on a semi-regular for $2500. There were other large lots of machineguns left as well as you could buy a Stemple 76/45 for I beleive $3K up until close to John's death, S&H had FNC sears to perform conversions until about 2004 or 2005 for $2000. Once these large lots of commericially available machineguns ran out , the free market really took over and prices started rising dramatically. The 90's also saw the selloff of large batches of H&K sears by LMO and DIASs by Western Firearms for sub $1000 pricetags. 2. The promise of belt-fed uppers for the M11 were "announced" and Ares starting accepting deposits on the Shrike around the same time period. Everybody thought they could get a SAW or RPD equivalent for $2000 so inevitably needed a second host to convert. All of a sudden a rather large chunk of the MG owning population now needed another M16 or Mac which drove up prices on these two commodity type guns. Prices started rising dramatically at that point as folks scrambled to snatch up any available M16s and M11s to turn them into beltfeds. I remember an add from Craig Wheatley at Tactical Inc offering to buy an M11/9 offered to him for $2500 when the previous going rate was $1500. Almost overnight M11s jumped $500 to $1000 in cost. Most of these beltfed uppers never materialized and the Shrike..just about everybody knows that story. Things started to slow down by the late 2000s after a dramatic price run up through the early and mid-2000s. Once the late 2000s early 2010s recession hit, machinegun prices started to dip a bit but have since come back full force and continue to rise, especially on lower end guns like M11s, FNCs, Uzis, and AC556s which are all marching toward 5 digit pricetags. As an investment they are highly risky. In my personal view the biggest risk to machineguns will be a high cap mag ban where existing mags in circulation cannot be transferred. Just look at what is happening at the state level like Colorado or Maryland. 20 years from now who is going to by a machinegun there when you can't legally get a mag for it. Whether you beleive it will happen or not, from an investment perspective you have to take that risk into account and it is certainly not a trivial risk. Now if you were up for all the risks that investing in machineguns entails, I would personally buy as many M11s as I could. They are the entry level gun and have in my estimation the most runway from an affordability standpoint to continue to climb in price. The relative market for $10,000 and under guns is probably 100 times the size as the market for a gun that costs as much or more than a new loaded pickup, which makes them much more liquid. As people continue to invent uppers for them, they will also only continue to become more valuable. |
|
If you like them and enjoy shooting them, I could see having a good size chunk of change tied up in them. But be prepared for them to be possibly worth nothing. Or they could be worth 3x.
Besides a mag ban. They could raise the tax 10x or more. Or maybe the government starts harassing owners on a regular basis and who wants to deal with that. Or most unlikely, they make them legal to mfg again. |
|
I don't forsee any new machine guns being entered into the registry
that would take a huge political push and I don't think there would be support for it from the public on the other hand, no liberals seem to complain very much about NFA machine guns, the high cost of the guns and the complicated federal tranfers seem to calm everyone down so I'm not really expecting anything to change much either way the feds don't have to raise the cost of the transfer for any reason, that mission has been accomplished by the marketplace. what difference does it make if a gun costs $200 and has a $10K stamp or it cost $10K and has a $200 stamp, the same mission is accomplished, pricing joe schmoe out of the market I'd be willing to spend the price of a new car on NFA stuff, based on the idea that there won't be any drastic changes with the NFA market anytime soon. I'm betting that these guns will continue to climb in price until most of the buyers are chased out of the market by the prices. Eventually the whole NFA market will be just high end collectors, guys who buy guns in the 40, 50, 60 thousand dollar range. some of the market is already there. are $35k thompsons doubling in price like M11/9s? probably not. |
|
The runup in MG prices was due to one main factor: the 1986 Hughes Amendment freeze. Going forward, there are three possibilities regarding the legal status of machineguns: either it can remain the same, or the Hughes Amendment can be repealed (opening the registry), or further transfers can be banned. The last two possibilities would cause MG values to drop off a cliff; the other possibility (the status quo) wouldn't have a dramatic effect on values. Threfore, there's nothing on the horizon that would cause MG prices to spike. They might gradually rise due purely to supply and demand.
A prime characteristic of an investment market is liquidity. That is, you have to have significant pools of willing buyers and sellers, and there can't be artifical barriers to easy transfers. I would say that 6 to 9 month waits for ATF approvals just about kill liquidity. Nobody would buy stocks and bonds, for example, if it took 6 to 9 months to settle the transaction. That's an eternity in the investment world. Meanwhile, holding MG's pays no dividends. On the contrary -- actually using them would cost a fortune for ammunition. Buy machineguns because you like them. The investment rationale is just a means of fooling ourselves (or a means of convincing a reluctant spouse). |
| From what I've seen, most MG owners (excluding belt-feds) do not go to the range with 2-3 thousand rounds to burn at a time. Rather it is more like 3-5 hundred, which is about what many people fire through a semi-auto in a range session. Most people won't "go broke" shooting a machine gun, but will go through a lot of ammo those first few times out shooting one. Those times will be some of your best memories too, so "hell yes" it is worth it! |
|
Quoted:
The runup in MG prices was due to one main factor: the 1986 Hughes Amendment freeze. Going forward, there are three possibilities regarding the legal status of machineguns: either it can remain the same, or the Hughes Amendment can be repealed (opening the registry), or further transfers can be banned. The last two possibilities would cause MG values to drop off a cliff; the other possibility (the status quo) wouldn't have a dramatic effect on values. Threfore, there's nothing on the horizon that would cause MG prices to spike. They might gradually rise due purely to supply and demand. A prime characteristic of an investment market is liquidity. That is, you have to have significant pools of willing buyers and sellers, and there can't be artifical barriers to easy transfers. I would say that 6 to 9 month waits for ATF approvals just about kill liquidity. Nobody would buy stocks and bonds, for example, if it took 6 to 9 months to settle the transaction. That's an eternity in the investment world. Meanwhile, holding MG's pays no dividends. On the contrary -- actually using them would cost a fortune for ammunition. Buy machineguns because you like them. The investment rationale is just a means of fooling ourselves (or a means of convincing a reluctant spouse). Agreed. |
|
Quoted:
From what I've seen, most MG owners (excluding belt-feds) do not go to the range with 2-3 thousand rounds to burn at a time. Rather it is more like 3-5 hundred, which is about what many people fire through a semi-auto in a range session. Most people won't "go broke" shooting a machine gun, but will go through a lot of ammo those first few times out shooting one. Those times will be some of your best memories too, so "hell yes" it is worth it! Yep |
|
Quoted:
The runup in MG prices was due to one main factor: the 1986 Hughes Amendment freeze. Going forward, there are three possibilities regarding the legal status of machineguns: either it can remain the same, or the Hughes Amendment can be repealed (opening the registry), or further transfers can be banned. The last two possibilities would cause MG values to drop off a cliff; the other possibility (the status quo) wouldn't have a dramatic effect on values. Threfore, there's nothing on the horizon that would cause MG prices to spike. They might gradually rise due purely to supply and demand. A prime characteristic of an investment market is liquidity. That is, you have to have significant pools of willing buyers and sellers, and there can't be artifical barriers to easy transfers. I would say that 6 to 9 month waits for ATF approvals just about kill liquidity. Nobody would buy stocks and bonds, for example, if it took 6 to 9 months to settle the transaction. That's an eternity in the investment world. Meanwhile, holding MG's pays no dividends. On the contrary -- actually using them would cost a fortune for ammunition. Buy machineguns because you like them. The investment rationale is just a means of fooling ourselves (or a means of convincing a reluctant spouse). Ive tried to talk the wife into letting me buy a MG. Her response is "What if we need that money? We cant just go out & sell it at the local pawn shop." I tell her thats what "INVESTMENTS" are all about. Yes it'll take some time to get the money back. Thats like anything thats of any value. You gotta have someone willing to pay for it. BUT from the history of MG prices, just like Gold, it ALWAYS go up OVER TIME.. Yes transferables COULD get banned but really whats the chances of that? I mean, there are a lot of bankers, lawyers, even politicians that B/S/T transferables every year. You really think they're going to restrict what THEY can do?? If you say yes, click the red X at the top right hand side of this page and go pet your unicorn. |
|
Quoted:
Quoted:
The runup in MG prices was due to one main factor: the 1986 Hughes Amendment freeze. Going forward, there are three possibilities regarding the legal status of machineguns: either it can remain the same, or the Hughes Amendment can be repealed (opening the registry), or further transfers can be banned. The last two possibilities would cause MG values to drop off a cliff; the other possibility (the status quo) wouldn't have a dramatic effect on values. Threfore, there's nothing on the horizon that would cause MG prices to spike. They might gradually rise due purely to supply and demand. A prime characteristic of an investment market is liquidity. That is, you have to have significant pools of willing buyers and sellers, and there can't be artifical barriers to easy transfers. I would say that 6 to 9 month waits for ATF approvals just about kill liquidity. Nobody would buy stocks and bonds, for example, if it took 6 to 9 months to settle the transaction. That's an eternity in the investment world. Meanwhile, holding MG's pays no dividends. On the contrary -- actually using them would cost a fortune for ammunition. Buy machineguns because you like them. The investment rationale is just a means of fooling ourselves (or a means of convincing a reluctant spouse). Ive tried to talk the wife into letting me buy a MG. Her response is "What if we need that money? We cant just go out & sell it at the local pawn shop." I tell her thats what "INVESTMENTS" are all about. Yes it'll take some time to get the money back. Thats like anything thats of any value. You gotta have someone willing to pay for it. BUT from the history of MG prices, just like Gold, it ALWAYS go up OVER TIME.. Yes transferables COULD get banned but really whats the chances of that? I mean, there are a lot of bankers, lawyers, even politicians that B/S/T transferables every year. You really think they're going to restrict what THEY can do?? If you say yes, click the red X at the top right hand side of this page and go pet your unicorn. after seeing that putting 8 rounds in a magazine is a felony in one of the most populous states of the union, I wouldn't count on anything not being banned. |
|
Many registered MGs out there are select fire so you can shoot only semi. Having the option to fire FA is what would make them enjoyable to have IMO.
I'm looking at getting one of the MAC types because I could add after market parts to make it more controllable (and it's the only MG I can afford at the moment). |
|
Quoted: Many registered MGs out there are select fire so you can shoot only semi. Having the option to fire FA is what would make them enjoyable to have IMO. I'm looking at getting one of the MAC types because I could add after market parts to make it more controllable (and it's the only MG I can afford at the moment). I got my Sten, Stemple, m76a1, and Reising 50 in the Mac price range. But the Mac does offer the a chance to upgrade later. But you will not make that money used for upgrades back...
|
|
Quoted:
Quoted:
Many registered MGs out there are select fire so you can shoot only semi. Having the option to fire FA is what would make them enjoyable to have IMO. I'm looking at getting one of the MAC types because I could add after market parts to make it more controllable (and it's the only MG I can afford at the moment). I got my Sten, Stemple, m76a1, and Reising 50 in the Mac price range. But the Mac does offer the a chance to upgrade later. But you will not make that money used for upgrades back... Id get a MK760 but not having the option of other calibers is one of the things that turns me off. I love my .22 LRs Well I used to up till I couldnt find it anymore 
|
|
Quoted:
Many registered MGs out there are select fire so you can shoot only semi. Having the option to fire FA is what would make them enjoyable to have IMO. I'm looking at getting one of the MAC types because I could add after market parts to make it more controllable (and it's the only MG I can afford at the moment). My advice to any person who interested in FA: Buy immediately Nobody comes out ahead by waiting There's absolutely nothing wrong with getting a MAC. Any gun that has a ready supply of cheap parts and magzines is GTG for your first MG. Especially if it has a good 22 kit available. I owned a MAC and would buy another without a moment's hesitation. Get a suppressor too, the bowers CAC9 is an excellent choice for the macs |
|
Not only does the NFA process produce poor liquidity, but you have to prepay for an item which is approaching a year for delivery.
Additionally, there are several ways the buyer could potentially get ripped-off. 1. The seller may be dishonest and have no intention of delivering the item. 2. The seller could become ill or die prior to transfer. 3. The seller could intentionally or unintentionally misrepresent the condition of the MG, or other important details. |
|
Quoted:
Not only does the NFA process produce poor liquidity, but you have to prepay for an item which is approaching a year for delivery. Additionally, there are several ways the buyer could potentially get ripped-off. 1. The seller may be dishonest and have no intention of delivering the item. 2. The seller could become ill or die prior to transfer. 3. The seller could intentionally or unintentionally misrepresent the condition of the MG, or other important details. If you are that worried about it for $500~ you could fly out, rent a car, go look at it, get a signed contract, and take all the parts off the weapon other then the s/n'ed part. |
|
Quoted:
Not only does the NFA process produce poor liquidity, but you have to prepay for an item which is approaching a year for delivery. Additionally, there are several ways the buyer could potentially get ripped-off. 1. The seller may be dishonest and have no intention of delivering the item. 2. The seller could become ill or die prior to transfer. 3. The seller could intentionally or unintentionally misrepresent the condition of the MG, or other important details. Or you could buy from a reputable dealer. People buy automobiles all the time off ebay, car prices are still generally much higher than MG prices. There are ways to work around the problem of buying an expensive item long distance. As far as liquidity goes, you could put an UZI on subguns today and seriously have the check in your hand within two weeks. I know this from having done it. |
|
I agree buying from a reputable dealer significantly decreases the risk, but you pay a premium for doing so.
Seeing the item in person also helps, since you can inspect it, meet the seller and take some parts with you, as suggested by damcv62. However, the seller retains the registered part. A contract certainly helps, and I believe you likely will eventually be successful, after a potentially long delay. Some degree of knowledge is needed to truly inspect and evaluate it, which many of us don't have. I would have similar difficulty completely examining a classic car or collectable art. To me the advantage of owning a MG is that I get to enjoy it (unlike traditional investments and more like a house), and it will probably increase in value. |
|
Quoted:
Not only does the NFA process produce poor liquidity... The concerns you listed are on the buyer's end of the transaction and not associated with the liquidity of selling. Properly priced MGs appear to move very fast from where I'm sitting, often lasting only hours if priced slightly below market value. It might take many months before the item is approved for transfer, but the seller gets his money now. While not as liquid as cash or stocks, I don't perceive a difficulty or delay in converting back to cash. |
|
Quoted:
Quoted:
Not only does the NFA process produce poor liquidity... The concerns you listed are on the buyer's end of the transaction and not associated with the liquidity of selling. Properly priced MGs appear to move very fast from where I'm sitting, often lasting only hours if priced slightly below market value. It might take many months before the item is approved for transfer, but the seller gets his money now. While not as liquid as cash or stocks, I don't perceive a difficulty or delay in converting back to cash. I was referring to the purchase side of the process. |
|
Quoted:
Quoted:
Quoted:
Not only does the NFA process produce poor liquidity... The concerns you listed are on the buyer's end of the transaction and not associated with the liquidity of selling. Properly priced MGs appear to move very fast from where I'm sitting, often lasting only hours if priced slightly below market value. It might take many months before the item is approved for transfer, but the seller gets his money now. While not as liquid as cash or stocks, I don't perceive a difficulty or delay in converting back to cash. I was referring to the purchase side of the process. I understand what you are saying, but buyers know the wait they are in for. Shoot, worse comes to worse sell it to a dealer like Ruben, you'll have funds over night. You'll get less then market value of course, but that is to be expected. |
|
Quoted:
I don't know if I'd put all my eggs into machine guns, but I would recommend anybody buying some of them. Then again, I buy them for fun, and to never resell. this. Dont put ALL your money in one, or some. You will be able to get your $$ back plus some later. |
|
Quoted:
I would love to buy an MG with a bank loan and pay it off over a period of 48-60 months. Has anybody on here done that? Under federal law, an NFA item cannot be used as collateral in a loan: Doing so is part of the definition of a "transfer," so the bank would have to file a Form 4, pay $200, and take possession of the NFA item until you pay off the loan ... and then transfer it to you on a second $200-due Form 4 when the load is paid off. Not many banks are willing to do so. Ten years ago, a lot of folks bought MGs using home equity lines of credit ... of course, when the rest estate market went upside-down in 2007/8 and banks started foreclosing, those owners had to dump them. Which is part of the reason the MG market had its one-and-only downturn, in 2008/9 (the other two reasons: When times are tough, many people sell "expensive toys" like MGs, boats, etc., and at the same time, buyers are more cautious with disposable income). You can just get a cash advance from a credit card, of course. |
|
in five years or whenever the business cycle is up again, just wait until you see what happens to MG prices
when everyone is all slobbery with optimism and taking bank loans again "the final metamorphasis" 
$172,000 hemi road runner, anyone? that which the baby boomers notice, they destroy |
|
Quoted:
I would love to buy an MG with a bank loan and pay it off over a period of 48-60 months. Has anybody on here done that? I wouldn't have any problem with taking a home equity loan for an MG within reason. in the MG game, it's alwasy better to buy sooner than later most MGs are still in the used car price range, it's not a big deal. Also, notice that MG sales are brisk, they are fairly easy to sell if needed. People get in trouble buying stuff like new cars or vacations, or credit carding dinners and consumer crap, stuff that loses value. I know a shitload of people carrying toxic debt on credit cards and car loans. a lot of guys will buy a new pickup for $40k  and lose the price of an M16 in the first day
Now THAT I think is nuts if you even suggest that a guy who makes $100K gross would not be wise to buy a two $40K cars, people will call you a commie |
|
Quoted:
I would love to buy an MG with a bank loan and pay it off over a period of 48-60 months. Has anybody on here done that? Many of us have taken unsecured personal loans to buy high dollar items. You need to have the credit to swing an unsecured loan, for the reasons tony_k pointed out. A personal signature loan will have a higher interest rate than borrowing from your home equity line of credit, or a secured loan like a car loan, but will be lower than the interest on an advance from your credit cards. |
|
Quoted:
I don't forsee any new machine guns being entered into the registry that would take a huge political push and I don't think there would be support for it from the public on the other hand, no liberals seem to complain very much about NFA machine guns, the high cost of the guns and the complicated federal tranfers seem to calm everyone down so I'm not really expecting anything to change much either way the feds don't have to raise the cost of the transfer for any reason, that mission has been accomplished by the marketplace. what difference does it make if a gun costs $200 and has a $10K stamp or it cost $10K and has a $200 stamp, the same mission is accomplished, pricing joe schmoe out of the market I'd be willing to spend the price of a new car on NFA stuff, based on the idea that there won't be any drastic changes with the NFA market anytime soon. I'm betting that these guns will continue to climb in price until most of the buyers are chased out of the market by the prices. Eventually the whole NFA market will be just high end collectors, guys who buy guns in the 40, 50, 60 thousand dollar range. some of the market is already there. are $35k thompsons doubling in price like M11/9s? probably not. Ones bought in the 70's for ~$375 have sort of doubled... To ~$50,000! 
|
Armory Sponsor