NOTE: A reader points out that Colt was, prior to bankruptcy, privately owned. Even though a company goes private, you can still participate in it, through bonds. For example, Dell went private, but I bought some of their corporate debt, which has done well - better than my purchase of Yum! brands corporate debt (you stoners - go out and eat more tacos!). And apparently, the problem with Colt was, there was an awful lot of corporate debt! Even though a company is in a "hot" market, they can still screw things up royally, as is the case with Colt.
Buying gun stocks is the same as the 3-D printing deal. Folks like Motley Fool are hyping 3-D printing as "the next big thing!" but the same problems occur. Which 3-D printing company do you buy? Because some are successful and some go out of business, and most of these printers are being made cheaply in China.
Gun stocks (or bonds) are the same deal. Which do you buy? Because even though the market is booming, not all companies will thrive, as Colt shows.
Basically, when the media hypes a stock or an area of investment it is too late to buy in.
Second, as I predicted, a lot of folks cannot separate a logical analysis of market conditions from emotional thinking about firearms (whether you are pro or con). I received e-mails from people who thought that since I believed that gun stocks were not a good investment, that I was "anti-gun". Others, who are "anti-gun" chastise me for even thinking about investing in the "merchants of death".
People are fucking morons, aren't they? Emotional thinking will never move you forward in life, but sadly, when it comes to firearms, emotional thinking predominates on both sides of the debate.
Another reader opines that weapons themselves are a "good investment" which may or may not be true. If you buy a firearm for retail price at a gun dealer, odds are it will merely hold its value, or likely, depreciate, because like with gold, they are making more every day. Few barriers to entry and assembly lines cranking them out - and little fear of "Obama taking your guns" means that supply will always outstrip demand, even if there are spot shortages.
You could, if you were smart, buy weapons on the secondhand market and then re-sell them for a profit. recently, there was a glut of such product on the market, as a lot of folks who spent $1000 or more on a firearm on the premise "Obama will take our guns away" realized a year later that they had a very expensive paperweight in their living room, and that they had important bills to pay and real expenses in life and couldn't really afford such a luxury as an AR-15.
And that is why you see all these "GUN AND PAWN" places in rural areas - guns are probably the most pawned item on the planet. There is an old redneck joke that goes something like this: "Oh, yea, buddy? Well, if you piss me off again, I'll go get my gun out of pawn and shoot you!" - which sort of illustrates how "gun ownership" works in the rural South.
So you could buy low, I guess, between school shootings, and then sell high when the NRA cranks up "gun confiscation" rhetoric. But then again, I suppose it would be a pretty marginal business, much like buying and selling used cars.
Buying and HOLDING guns as an investment would be far trickier. Unless they have collector item value (antiques, etc.) they likely won't hold their value much. The rifle you buy at Wal-Mart is going to sell at Wal-Mart for the same price next year (adjusted for inflation) and no one is going to pay you huge amounts of money for a used weapon over a new one.
I suppose, given the loophole in firearms laws, you could buy from legitimate dealers and then sell to friends who don't want to wait for background checks. But that might violate a number of laws and land you in jail. Not recommended.
It is sad that people can't analyze things without investing a lot of emotional freight into them.