Let’s Go To A Gun Show.

              Yesterday I went to the gun show that is held every three months at a location about 20 miles from where I live.  The show has been running for at least twenty-five years and I see the same vendors and visitors year after year. It’s a medium-sized show as gun shows go, maybe 150 vendors selling all kinds of guns and gun-related stuff, maybe 300 – 400 folks wandering around at any one time. The most popular location, of course, was the deli which features the usual hot dogs and fries, there was also a Dunkin’ Donuts kiosk where a cup of coffee ran three bucks.

              I’m not saying that I conducted any kind of scientific survey, but it’s not that difficult to get a pretty good read on who goes to a gun shows these days. The people walking up and down the aisles were almost all older White men, probably in their 60’s and above. The men outnumbered the women by at least ten to one – so much for all the talk about how women are ‘getting into’ guns. Did I see any Brothers wandering around even though the show’s location is less than ten minutes from a medium-sized city which is at least fifty percent non-White?  No.

              As for the people who were sitting behind the vendor tables, most of them were as old or older than the folks who came to the show to look at guns. Of the 150 vendors, probably about one-third were selling guns but only a handful were dealers with real gun shops, the rest were collectors who are licensed as dealers but don’t actually run a real business of any kind. It’s easy to spot the collectors as opposed to the real dealers, because the collectors display guns that are at least a hundred years old. A 1903 Springfield rifle, for example, may have been manufactured prior to 1919, and I saw at least 30 of these World War I vintage guns on vendor tables here and there.

              Of the 100 or so vendors who weren’t selling guns, about half of them sold optics, holsters or knives, the other half were selling all kinds of junk including jewelry, military-surplus clothing, books, targets and other kinds of crap. I bought a nice, handmade leather holster for my Glock 17; I also got into a lively discussion with a guy who knew ‘for a fact’ that every Democratic Presidential candidate, all 20 of them, had received large payments from some oligarch in the Ukraine.

              Ten years ago gun shows always had a couple of vendors selling military memorabilia, in particular World War II medals, uniforms and helmets, including stuff allegedly worn by Japanese soldiers on Iwo Jima or the Nazi SS.  Those items have disappeared from the gun show circuit, not because of political correctness, but because nobody remembers or even knows anything about a war which ended more than 70 years ago.

              And yes, the NRA was at the show because America’s ‘first civil rights organization’ usually has a booth at every gun show. For all the talk about how the NRA is going down the tubes and Wayne-o is such a big crook, the NRA rep seemed to be having a good time handing out applications and a list of upcoming NRA events.

              One big change: I didn’t see a single vendor selling MAGA hats or t-shirts extolling the virtues of Donald Trump. In fact, for all the talk about how gun owners are the bedrock of the alt-right, the show was decidedly non-political in every respect. If anyone was walking around with a petition calling on Nancy Pelosi to ‘open up’ the impeachment process, he was keeping very much out of sight.

              This show takes place three miles away from an inner-city neighborhood where shootings are a daily part of life. Perhaps someone can explain to me how closing down this show would do anything to reduce gun violence in that nearby neighborhood or anywhere else.

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Why Do We Believe That A Gun Keeps Us Safe?

              Our friends at UC-Davis have just published an article on the connection between increased gun sales and gun-injury rates. The good news about the article is that it is open source, which means you can download it here and read it for free. So I commend Garen Wintemute and his colleagues for giving everyone in Gun-control Nation an opportunity to share their research findings for free.

              That’s the good news. After I summarize their research and what they learned, I’m going to mention the bad news. And the bad news is what Wintemute and his research team didn’t bother to learn. But first, here’s see what they learned.

              The research covers a ‘spike’ in handgun sales in California in California following the 2012 re-election of The Bomber and the Sandy Hook massacre, two events that occurred within a space of five weeks. The authors define a ‘spike’ as a “sharp and short-lived increase in firearm sales.”  From this, the authors then attempt to test the following hypothesis, namely, that “the sudden and unanticipated influx of firearms in a concentrated area such as a city could result in increases in firearm harm.” The research covered injury data from 499 California cities along with a complete run of handgun sales which are recorded individually and kept by the California DOJ.)

              Here’s where I have to raise a small, red flag. The authors claim that they measured the spike in gun sales from the date of Obama’s election until six weeks post-Sandy Hook. But what this analysis fails to consider is whether the spike was only a response to those two events rather than reflecting the release of pent-up demand which developed prior to Obama’s second win.

              I spent the entire Summer and Fall of 2012 sitting by myself in my gun shop because I didn’t know one, single gun nut who thought that Romney wasn’t going to be inaugurated President in 2013. Even Romney believed this fantasy and so did everyone else. Which is why gun sales collapsed during the run-up to that election, because everyone knows that when the White House is occupied by a Republican, the gun business goes into the toilet, prices collapse and why not wait a few months before buying your next gun? After all, it’s not as if anyone needs to buy another gun.

              If the UC-Davis researchers wanted to get a clear picture of the post-election spike, what they should have done was to factor in the trend of gun sales before the cataclysmic event took place. Gun sales always pick up in November and over the next three to four months, but the comparison should be judged not just by looking forward in time, but also by looking back.

              Did the researchers find an ‘association’ between the gun spike in November-December and an increase in gun injuries over the following year? Of course they did, although the percentage of gun injuries (4%) was substantially less than the percentage increase of handguns that were floating around. Again, I am somewhat leery of how the research team computed what they refer to as ‘excess handguns’ (meaning more guns being sold than were usually the case) because of the issue of pent-up demand.

Okay, now here comes the bad news.

We have all kinds of evidence that gun sales spike after mass shootings or other events that might portend new regulations reducing the availability of guns. Much of this research is referenced by the UC-Davis team. But to me, the question that really matters and that nobody in the public health research domain seems interested in understanding is this: Why do some people actually believe that a gun will protect them from the kind of harm represented by what took place at Sandy Hook?

If public health researchers like Wintemute and his colleagues would sit down and try to figure that one out, maybe just maybe we could hold a reasonable discussion with gun owners about the risk of owning those guns.

Is that too much to ask?

Want To Make A Million In The Gun Business? Start With Two Million.

              Everyone in Gun-control Nation is exulting over the latest news about how the NRA is in a state of free-fall collapse. But there was another piece of gun news which is far more important in terms of what it says about the future of America’s love affair with guns that gun-control advocates and noisemakers completely missed.

              I am referring to news out of South Carolina that a company named Ellett Bros., has filed for bankruptcy, an event hardly making a ripple in Gun-control Nation, but I can guarantee you was of great importance to the gun industry itself. This is because Ellett’s happens to be, or happens to have been, one of the largest gun wholesalers in the United States, and if you are or were a retail gun dealer, sooner or later you bought something from the sweet ‘thangs’ salesgirls who used to answer the Ellett phones.

              I visited Ellett’s back in 1976. As a certified gun nut, going to Ellett’s was the equivalent of a Muslim making the pilgrimage to Mecca during Holy Week. You could stand at the end of a big room and watch all the women busily taking orders and whispering sweet nothings into their customer’s ears, or you could glimpse inside the warehouse and see thousands of guns stacked up just waiting to be shipped. You might even get an opportunity to shake hands with one of the Ellett family members himself!

              What made the Ellett operation so successful back in the day was that it was the only gun wholesaler whose inventory basically contained not only every, single gun that was being made, but you might also be able to buy parts for old guns that needed to be repaired. For those of my readers who don’t know anything about the gun business, which happens to be most of my readers, always bear in mind that guns don’t wear out. So just about every guy who comes into a gun shop sooner or later needs a new part for an old gun. And who carried all those parts?  Ellett’s, that’s who.

              In addition to an enormous inventory, Ellett’s also pioneered telephone marketing at a time when most of the other gun wholesalers were still relying on catalog sales. This direct-sales approach, along with an annual dealer’s show which drew just about every retailer in the Southeast, made Ellett’s the powerhouse wholesale operation for much of the country east of the Mississippi River, particularly when they acquired another wholesale house, Jerry’s Outdoor Sports, which catered primarily to retailers in the Northeast.

              So what happened to bring about the collapse of Ellett’s at a time when, thanks to Obama, the gun business had enjoyed its best sales years of all time? To begin with, nobody in the gun business believed that Sleazy Don was going to move into the White House in 2017, which meant that Ellett’s, along with everyone else in the distribution chain, loaded up inventory anticipating that Hillary’s election would prolong and even increase the demand for guns which occurred during the Obama ‘regime.’

              The other problem in the gun business is that the distribution system is regulated end-to-end because of licensing requirements, which means you just can’t dump unsold inventory into a job-lot retailer or maybe ship the stuff overseas. The moment that gun owners stop coming into retail stores to buy more guns, and it’s always the same people who keep buying guns again and again, the retail inventory backs up, the wholesale inventory doesn’t ship out and someone gets stuck with the unsold load.

              Not only did Ellett’s bet the wrong way in 2016, but so did everyone else. Another major wholesaler, Accu-Sport, filed Chapter 11 last year, which means that the unsold inventory of two major distributors is available at rock-bottom prices. Which means that if you want to make a million in the gun business, now you have to start not with two million but with three.

When It Comes To Guns, The New York Times Gets It Wrong.

              Now that gun control has become an accepted issue for mainstream concern, as well as a required part of ‘this is what I will do’ spiel for every Democratic Presidential candidate, it figures that our friends at the (failing) New York Times would start ramping up their coverage about guns. This past weekend, the paper ran a major article in the Sunday Magazine section explaining how Remington, one of the iconic names in the gun business, went bust due to the financial machinations of its ownership group, a ‘secretive’ private-equity firm, Cerberus Capital Management.

              I met the owner of Cerberus, Steve Feinberg, at the SHOT show (or maybe it was NRA) back in 2006 (I think) when he was first floating around looking to become a player in guns.  He said that his plan was to purchase multiple gun companies, then consolidate manufacturing in one or two factory sites. When I told him that the problem with thinking of gun companies as investment opportunities was that industry were always very thin, he said this problem could be solved by achieving ‘economies of scale.’

              As it turned out, Feinberg didn’t know much about the gun business, but according to the NYT article, he certainly knew how to make a quick buck. To acquire Remington he formed a holding company with money from the private sector, then getting Remington to borrow money which was used to pay back those investors (a.k.a. Cerberus and other hedge funds) leaving the gun company saddled with debt. The debt obligation couldn’t be sustained when gun sales went south following the end of the Obama regime.

              All well and good except for one little thing. What spelled the end of Remington was not just  the confluence of bad timing between taking on debt and declining sales. What was much more of a problem was how the gun company was already in deep trouble even though, according to the author of this article, Jesse Barron, “sales were strong and the future bright.”  If Barron had taken the trouble to walk into any gun shop and ask the proprietor how Remington products were selling back in 2008, he would have learned that the company’s future was already going down the drain.

              I got into the gun business in the 1960’s when companies like Remington, Winchester and Iver Johnson were name brands. Winchester and IJ were long gone by the time Feinberg came floating around. Remington was still holding on simply because everyone who wanted to go hunting with a bolt-action rifle or a semi-automatic or slide-action shotgun had at least one Remington in their home.

              Notice the phrase ‘go hunting.’ Guess what started happening to all those hunters beginning in the 1980’s? They all began to die off. Which is why gun companies like Ruger, Smith & Wesson and Springfield Armory saw the handwriting on the wall, along with the appearance of the European handgun imports (Beretta, Glock, Sig) and remade themselves as companies whose products were primarily designed for armed, self-defense.

              How did Remington meet the demand for small, concealable self-defense handguns? It came out with a whole line of large, full-metal pistols based on the Colt 1911 design which was never (read: never) considered to be a personal defense gun. When the Remington engineers realized that it was small, lightweight polymer guns that were pushing sales, the product they brought to the market, the R51, didn’t work.  And in the gun business, where everything is word of mouth, if a gun doesn’t work, you might as well close down your shop.

              If The New York Times wants to become an important voice in the burgeoning noise being made by Gun-control Nation, the editors might consider checking the content of their articles with someone who knows something about guns.  On the other hand, since the average NYT reader is probably not a member of Gun-nut Nation, does it really matter whether an op-ed piece aligns with the facts?

Is America’s Love Affair With Guns Coming To An End?

              I have been connected to the gun business one way or another for more than sixty years, and for the very first time I am seeing something about the business that I have never seen before. What I am talking about is the fact that the latest release of background-check data from the FBI, the numbers for February, confirm that so far the sales slump which followed the inauguration of Sleazebag Trump has continued well past the 2018 election which brought about an abrupt change in gun politics on Capitol Hill.

              The very first thing that the new Democratic majority did (or maybe it was the second thing) after the 116th Congress convened on January 3rd was to pass H.R. 8, calling for universal background checks on the transfer of all guns. This was followed at the end of February with another bill extending the time for the FBI to complete a background check from 3 up to 20 days, Now the fact that neither of those bills will probably get through the Senate, and even if they do, will probably languish unsigned on Sleazy Don’s desk doesn’t alter a new political dynamic that has clearly emerged, namely, that gun control as a viable point of political discussion has once again reared its ugly  head.

              Now you would think that these developments would do for the gun industry what such developments have always done in  the past, which is to say, provoke a mad rush into gun stores to clean off the shelves before the dreaded government comes along and gets rid of all the guns. And despite what the ‘experts’ told a Congressional hearing last week (they weren’t under oath so they couldn’t be accused of lying to Congress), if you implement universal background checks for all gun transfers, sooner or later you wind up with total gun registration. And we all know what happens when the government can identify everyone who owns a gun, right?

              So how come gun sales continue to slide into the toilet, no matter how busy the gun-grabbers seem to be?  At the end of August last year, Smith & Wesson stock was selling for less than $10 a share. It closed at $13.60 the day of the election, it’s now drifting back down to under ten bucks. Before all the votes came in, the market was anticipating the possibility that the political return of the tree-huggers would produce a new surge in buying guns. The market has turned out to be wrong.

              We need to wait another couple of months before proclaiming the great de-coupling of fear and demand as the driver for the purchase and ownership of guns. But if things keep going the way they are currently going, from the perspective of America’s love affair with firearms, a new age may have definitely dawned.  There’s a website out there which sells ammunition delivered direct to your door. Right now they are advertising 500 rounds of the best, 22LR ammo on the market for $16.99.  I remember when you couldn’t find any 22LR ammunition because of the hoarding and over-consumption which occurred during the heady Obama days. The ammo is now so cheap that they can’t even give it away. And nothing is a more accurate barometer of the state of the gun market than the cost of 22LR.

              The one thing we continue to get from various public-opinion surveys is that the percentage of Americans who own guns hasn’t really increased; it’s more likely that the average gun owner now owns more guns. But at some point, even most of the die-hard gun nuts just can’t find the space, or the money, or simply the interest to go out and buy another gun. Remember when every kitchen had something called a Mixmaster? Maybe some day my grandchildren will visit the Smithsonian and walk past an exhibition of ‘vintage’ guns. I can just hear one of them saying, “Didn’t Grandpa used to own those things?”

Another Gun Expert On The Death Of The NRA.

              As a member of the National Rifle Association since 1955 and currently a Patriot Life Benefactor (whew!) Member, it pains me to consider the possibility that the power and influence of America’s ‘first civil rights organization’ may be coming to an end. At least this is what E. J.Dionne, an academic know-it-all, believes may soon occur.

              Here’s the announcement from atop Mount WaPo: “Taken together, the events of 2016 and the results of the 2018 election will be remembered as the beginning of the end of the gun lobby’s power.”

              As a former academic know-it-all, I would like to politely disagree. And I would like to disagree because Professor Dionne’s argument is based on information being produced, promoted and believed by individuals and organizations who would like the NRA to go the way of the dial telephone and the do-do bird; in other words, they simply don’t like guns.

              Dionne’s argument about the de-fanged NRA kicks off with the case of Maria Butina, the Russian poster-girl who is pleading guilty to the charge that she used her connections in the gun business to promote Russian governmental interests; i.e., she was an ‘agent’ for Russian political interests and part of the grand scheme to get Trump elected in 2016.

              What’s glossed over again and again in the Butina story is the fact that her handler,Alexander Torshin, happens to be a Board member of the bank which finances a company called Izhmash, which happens to manufacture the original AK-47 assault rifle, which happens to be the single, most popular gun sold anywhere in the world today. The Russian gun maker has been trying, so far without success, to bring the rifle into the American market. If they could pull it off, the deal would probably be worth at least $500 million in net profits.  Right now, an American gun nut who wants to own an AK-47 has to buy a gun slapped together with crummy, after-market parts from Rumania or some other place. The real-deal AK would easily sell 5 million units to Gun-nut Nation, and a markup of $100 bucks would still leave the sticker price in the affordable range.

              Since Professor Dionne writes about guns from time to time, perhaps he should spend a day at an NRA show to learn something about the business which he postures himself to be an expert on the pages of WaPo.  In fact, I’ll meet him at the 2019 show in Indianapolis, walk him around and introduce him to God knows how many overseas visitors who, just like Butina, have some kind of gun-related product they want to promote.  Know why Americans own at least 40% of the small arms floating around the globe?  Because we are the only country which has a retail gun market, okay? Professor Dionne can also chat with Wayne-o, who makes a point of stopping at the booth of every vendor to thank him for supporting the show. How do you think Maria Butina first met Wayne LaPierre?

              Dionne’s other argument about how the NRA’s power is waning is based on the fact that what the NRA put up as political contributions in 2018 was a substantial decrease from what they gave out in 2016, mostly having to do with the $30 million they handed to Donald Trump. But what Dionne doesn’t mention is that,on average, the NRA contributes less than 3% of the money which GOP office-holders spend on their campaigns.  Even the total amount that the NRA gave it’s A+-rated, House members in 2018 was less than this same bunch received in political donations from the American College of Emergency Physicians.

              What happened in the last election cycle is that national gun-control organizations like Brady and Everytown have been energized by the attention paid by the media to the kids from Parkland, whose national tours were basically the handiwork of a certain, former Mayor of New York City whose first name begins with M, not R. But something else about guns has been happening in the last several years which E. J. Dionne seems not to have noticed at all.

In 1990 and 1992,two remarkable scholars, Art Kellerman and Fred Rivara, published research which indisputably showed that access to a gun increased the risk of suicide and homicide in the home. Know how the average American reacted to this news? The  percentage of Americans who believe that a gun in the home is more of a benefit and less of a risk continues to go – up!  And given the fact that, at most, only 40% or less of American homes contain one or more legal guns, obviously there are lots of non-gun owners who also buy the NRA’s basic argument about the positives of owning a gun.

              If E. J. Dionne wants to inform us about the state of the gun business, maybe he would attempt to explain this remarkable case of cognitive dissonance, which is a much more important harbinger of the long-term health of the NRA. But the truth is that E. J. Dionne will stick with his usual bromides because his audience doesn’t like guns.

The Gun Business Ain’t Gettin’ Any Better. In Fact, It’s Gettin’ Worse.

Once again I have the honor and pleasure of presenting to my reading audience the monthly portrait of the gun business as rendered by the background check data published by the FBI.  Believe it or not, the gun industry is the only consumer product industry whose health and welfare can be understood with reference to government-issued data which doesn’t lie. Because no matter how many guns are floating around, no matter how many gun transfers do or do not require  background checks, unless the gun makers can make and sell more guns, sooner or later it’s bye-bye guns. And since most gun shops try to keep the new-gun inventory as light as possible if only because the damn things cost so much, the overall number of new-gun transfers recorded on the background-check form (ATF4473) really gives a very accurate picture of what’s happening on the factory floors.

             And what’s happening is that the gun industry is in the dumps.  For October, the total number of completed 4473 forms covering gun transfers was 928,474.  A year ago, the October number was 1,056,548, a month-to-month drop of 12 percent.  Since the beginning of the year, handgun transfers have totalled 5,281,038.  Over the same period in the last year of the Obama regime, handgun transfers were 6,492,102. That’s a drop of nearly 20 percent.

The only problem with these numbers is that the 4473 form doesn’t distinguish between the transfer of new and used guns. But we can assume that the breakdown between new and used guns in most gun shops is somewhere around half and half. So if the entire retail gun segment has sold around 2,600,000 new guns this year, there’s a reason why the price of Smith & Wesson stock has dropped from $28 to $14 since 2016.

In 2013, the year following Sandy Hook when Obama tried (but failed) to pass a new gun law, the gun industry produced around 5 million handguns, which was the biggest single production year the industry ever had.  That same year, in rough numbers, the FBI processed 5,750,000 handgun background checks.  In other words, dealers cleaned their shelves.  Now here’s the real number to consider.  The population of the U.S. in 2013 was 316 million (give or take a couple of hundred thousand) the population at mid-2018 is estimated to be 327 million and change.

So here’s the bottom line. So far this year the number of new hand guns that entered the civilian arsenal was somewhere around 795 guns per 100,000 population; in 2013 that same number was 1,012.  In other words, the per-capita purchase of new hand guns since 2013 is down by more than 20 percent.

If you can find another consumer industry that can sustain itself over any period of time when its market drops by 20 percent, give me the name and I’ll short the stock.  What we have here folks, is a consumer industry whose market share is not only slowing down, but isn’t even keeping pace with the size of the potential market itself.  Because if the population of the U.S. goes up roughly 1 percent a year, no consumer industry will survive over the long term if the size of its market doesn’t at least increase by the same 1 percent. This isn’t rocket science, by the way, it’s simple business math.

All these numbers would be slightly less dismal had I looked not just at data on handguns but data covering all guns manufactured and sold. The reason I didn’t bother to break down sales of rifles and shotguns is that the gun industry has all put its product eggs into the handgun basket.  Now you can always pretend that an AR-15 is a personal defense weapon even if it happens to be a long gun. But walking around with a concealed weapon doesn’t mean that you can strap on an AR-15.

The joke in the gun business is that if you want to make a million, start with two million. It may not be a joke.

Want To Go Into The Gun Business? Now’s Not The Time.

There used to be a joke in the gun business which went like this: “Want to make a million in the gun business? Start with two million.”  Well, the FBI has just released the monthly NICS background-check numbers for September, and if things keep going the way they are going, the old joke will have to say that if you want to end up with a million bucks from guns, better start with three million, or even more.

business            Yea, yea, I know that FBI-NICS checks only count the initial sale of a gun, except that since most gun shops have an inventory which consists of at least 30% used guns, the background check number each month is a very good indicator of the overall trends within the gun industry. And lately, the trend has been going down.

September is a benchmark month for the gun business, because guns have never been able to compete with the beach.  The only reason I kept my gun shop open in July and August is because the air-conditioning system worked better in my store than it did at home. But come Labor Day, those boring beach vacations are over, the kids are back in school, the leaves in northern states are just beginning to turn, and the hunting season is in the air. And don’t for one moment believe that hunting is no longer a key activity for driving gun sales. Even if a majority of gun owners claim that their primary reason for having a gun is self-defense, there is still something about Fall weather that translates into an interest in guns.

My point is that September gun sales always show a significant increase compared to the prior month. But if we compare September background checks this year to background checks in the month of September in previous years, the decline of the industry becomes very clear.

The NICS checks cover four separate categories: handguns, long guns, ‘other’ guns and ‘multiple’ sales.  The first two categories are self-explanatory; ‘other’ guns refer usually refer to a receiver without a barrel, which is often how AR-15 rifle kits are sold – it’s still a gun because the receiver is serialized but it might be a handgun or a long gun, depending on what length barrel is then attached. Multiple guns means that the purchaser bought more than one gun; he could have bought two, he could have bought ten. In doing my numbers for this column, I’m assuming that ‘multiple’ equals two.

So here we go. Last month NICS background checks for gun transfers from dealers to customers totaled 869,636.  A year earlier the total was 957,597. Ready?  In 2016 the September number was 1,100,334. That’s a two-year drop of 20 percent.  Want to find the last year that September NICS numbers were under 900,000? You have to go back to 2011, which was before Sandy Hook put gun control on Obama’s brain.

Given the fact that I’m a yellow-dog Democrat what I am now going to say may sound like it shouldn’t be said, but from the point of view of reducing gun violence, I’m not sure that what we need in November is a blue wave. Because the truth is that unless the Hill goes blue and Sleazy Don decides to shove Wayne Lapierre under a bus in order to make a deal with the Democrats for something he really needs, I’m willing to bet that the slide in gun sales over the last two years may well continue at least until the next Presidential year, by which time NICS numbers could be almost half of what was registered during the Obama regime.

And when all is really said and done, you can talk about armed, self-defense and terrorism and all that other stuff, but an industry that is selling half as many products as it did ten years earlier, is an industry that will begin to look like…remember something called pay phones?

Can The Gun Business Recover From The Trump Slump? Elect Lizzie Warren in 2020.

On August 8, 2016, Smith & Wesson stock was selling at just under $30 bucks a share.  Yesterday, the stock closed at $9.39.  On August 8, 2016, investors paid around $13 for a share of New York Times stock.  This morning the stock opened at $23.  In the last two years, Smith & Wesson has dropped by two-thirds, the price of New York Times shares have gone up by almost 50%.

charQuestion: What accounts for such a radical difference in the performance of these two companies?

Answer: Donald Trump.

This past Saturday I walked into a nice, little gun shop in Vermont and bought 300 rounds of 22LR ammo which we use for running the gun-safety course in my shop. This wasn’t cheap stuff; this was the best 22LR ammo you can buy – CCI.  I paid 7 cents a round ($20 for a 300-round box) which is about half of what I paid for the same ammunition back when Smith & Wesson stock was selling for $30 a share.  Want to know how the gun business is doing? Just check the price of ammo.

If Hillary had done what she was supposed to do, namely, win in a landslide, I guarantee you that Smith & Wesson stock would now be selling for $50 a share and the price of New York Times stock would be somewhere around $5 or less.  Know why? Because Hillary would have gone out of her way in her inauguration speech to make a big deal out of gun control, if only because Gun-control Nation was one of the groups which went all out to try and get her moved back into the White House.

Would there have been a national walk-out after Parkland if Hillary’s campaign staff hadn’t run the worst and most inept Presidential campaign of all time? And anyone who doubts what I just said, btw, should ask themselves how she could have lost Michigan – Michigan! – by less than 11,000 votes. Would Lockton have stopped selling liability insurance to the boys in Fairfax if they hadn’t responded to mass shootings by trying to become the leading voice of the alt-right?

The problem facing Gun-nut Nation isn’t the existence of Trump in the Oval Office per se, it’s the fact that Trump has chosen again and again to communicate to his so-called ‘base’ in violent and incredibly stupid ways.  Remember what he said about Charlottesville, that there was ‘violence’ on both sides? There was only one little problem – the counter-protestors who showed up and marched against the Nazis and the Klan weren’t carrying AR-15s. And the fact that Trump didn’t understand how the ‘average’ American would react to seeing a gun-toting jerk with an assault rifle slung over his back shows how little understanding he really has about all those ‘average’ Americans whose interests he claims to represent.

For that matter, the NRA leadership appears not to have understood this as well. Over the last two years, they have produced some of the dumbest video messaging of all time, in particular the rants of Dana Loesch, who has tried to convince her audience that it’s the leftist elite which is responsible for violence against Trump, not the other way around. By the way, monthly visits to the NRA website since February, 2018 have dropped from 3.2 million to 860,000. So much for how Gun-nut Nation does such an effective social media job, right?

In July, 2016 the FBI conducted 1,143,824 background checks on gun transfers. Last month the same number was 739,968.  That’s not a drop in month-to-month sales, it’s a collapse. Frankly, I’m surprised that a share of Smith & Wesson stock is still worth $9 bucks. On the other hand, if the Congress turns blue in November, and Trump announces he’s out in 2020, and Lizzy Warren’s campaign starts to take on some steam, maybe buying some Smith & Wesson shares (NASDAQ: AOBC) isn’t such a bad idea….

 

 

Have Gun Sales Slowed Under Trump? Not As Much As You Might Think.

Back in February 2017, the first full month after Trump took the oath, the gun industry looked at sales numbers and began to complain.  On the one, Trump’s electoral surprise meant that gun makers didn’t have to worry about Hillary’s nefarious gun-control plans; on the other hand, with a pro-gun guy now running the show, fears about not being able to buy guys would subside and gun sales would also go down.

shows            And make no mistake about it, the heady days of the all-time gun-grabber Obama were now in the past. FBI-NICS background checks for February 2016 were 1,380,520 for all guns; background check numbers for February 2017 registered 1,199,692, a drop of 13%.  And between tax refunds, some cash for ploughing and a left-over bundle from X-mas gifts, February has always been a good month for buying guns.

But what about the rest of the year and the years to come?  There’s a reason why Smith & Wesson’s stock price was over $20 a share when Trump was inaugurated and is selling for around half that price right now.  The reason is the same reason that has always dominated the ups and downs of the gun market, namely, that most people who buy guns already own guns, and without new customers the sale of any consumer product will be largely influenced by whether current owners of that product believe they can continue to buy and own more of what they already have.

I have been in the gun business, one way or another, for more than 50 years. And I have never met a single gun owner who only owned one gun.  Maybe ‘never’ is too strong a word because there are certainly lots of households which contain a gun only because it belonged to grandpa and when he passed on, the gun represented some kind of family icon so nobody wanted to throw it out. But according to recent surveys, the average gun owner has 3 or 4 bangers lying round the house, and somewhere around 7 million gun nuts own, on average, 17 guns each. Right now I personally have somewhere around 60 guns within easy reach, which I don’t think is ant big deal.  I knew a guy whose house contained at least 300 guns and I suspect that by now he’s added maybe 50 more.

Why in God’s name would I need to own 60 guns?  You think my wife doesn’t own at least 50 pairs of shoes?  But a gun isn’t like a pair of shoes, right?  You can’t kill someone with a shoe.  So what.  What’s one thing got to do with the other?  Nothing, that’s what. Anyway, to get back to the gun business.

Using FBI-NICS checks as a proxy, gun sales in 2018 are running about 13% below 2017. There was a spike shortly after Las Vegas, which pushed up 2017 numbers, and another spike after Parkland, which did the same thing for 2018.  But this graph showing monthly background checks for handguns clearly indicates that the Trump bloom is off the Obama rose.

NICS handguns

              On the other hand, more than 3,750,000 handguns have moved between dealers and customers from January 1, 2017 through June 30 of this year, and if the estimates on the number of Americans who own guns is correct, then it may be the case that one out of every ten gun owners added an additional handgun to their collections over the past 18 months.

The point is that even though the gun industry depends for its existence on the same group of buyers buying more guns, the good news is that, by and large, gun owners still want to keep, own and buy guns. Which is why Gun-control Nation still has to figure out how to convince gun owners that they would be better off without their guns. Because as long as gun owners want their personal gun collections to get bigger, the gun industry will continue to sell guns.