Why guns are a better investment than gold

9.3mauser

9.3mauser

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The year is 1936. The dollar is trading at $5 to 1 British pound sterling. Gold is pegged at $35 oz, or 7 GBP/oz.

Still in 1936, you could order a Holland & Holland double rifle in any calibre you choose for 140 GBP. A special lightweight model would cost you an extra 5 pounds. That's 20-21 oz's of gold.

If you had kept that gold stashed under your mattress until the present day, trading at $1584 last time I checked, your 21 oz. would fetch a little over $33,000.

If you'd kept your Holland Royal stashed under the mattress, in reasonably decent condition, the selling price would be somewhere in the $50-60,000 range. If you'd splurged on the lightweight model, you can add another 10-15 grand just for the rarity.

Too rich for your blood? Thirty-five pounds would net you a Holland .375 magnum magazine rifle for a mere 5 oz. in gold. This works out to $7920, or roughly half the value of a not-buggered-up H&H magnum today.

The theory falls apart if you interest lies in more run of the mill stuff. A Winchester 94 carbine in 30-30 would have to be unfired, in the box, with all tags, and had been owned by royalty to be worth the $1980 the 1 1/4 oz of gold would bring today.

The bad news is, that in 1936 you were making decent money if you were being paid $15-20 per week!, If you could find a job at all!!
 
I wonder what would have been a better deal,

$10,000 worth of gold in early 1986, and selling it just before Y2K,

or

$10,000 worth of Microsoft stock at their IPO in 1986, and selling just before Y2K.
 
It is interesting for sure however from someone that took over his dads collection in 1974who had been a collector since the late 50's with over 200 guns at one time it didnot prove to be a good investment for me. I sold off 3/4 of this collection over the last 10 years and yes made some money on the hand guns for sure, a few of the rifles and a few of the shotguns but for the most part over all never made even close to what I would have if I invested the same about of money in gold. That being said I also didnot lose like I did either in RRSP after 911.
Maybe dad & I collected the wrong ones God knows, one thing is for sure never never never think you are going to make any money from saving ducks unlimited guns.Those I could not give away and we lost money on almost all of them.
 
When gold talks, all listen

I do not know if the following analogy applies, but here it is.

I worked in a comic store in the 1980’s. On a regular basis, people would walk in with big smiles on their faces, carrying what was said to be an original Spiderman or Superman comic. They would plop the comic on the counter and point to the reputed value of the comic, according to the standard reference book of the time. These people expected to walk out the door with thousands of dollars in their pockets. Apart from the fact that the vast majority of so-called collector’s comics were reprints with little of no value, even when the real items presented, nobody ever left our shop with a smile on his face. Why?

My boss at the shop would say, “The book value of that comic does not mean that anyone will actually walk into the shop and buy it.” I recall many instances where we tried to flog a comic at a fraction of its book value. In many cases, there were no takers.

I do not know if this same problem applies to gun collecting. But I do note that the high-end guns sold at places like Martini Hagn move very slowly, if at all. I often wonder if double rifles listed at $25,000.00 or more actually sell at that price. Maybe they do. But I doubt it.

For that reason, twenty-thousand dollars in gold is worth more than any twenty-thousand dollar gun. I am reminded of Sydney Greenstreet in “The Maltese Falcon.”

“This is genuine coin of the realm. With a dollar of this, you can buy ten dollars of talk.”
 
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There is some interesting historical interest rate information here:
http://w ww.bankofcanada.ca/rates/interest-rates/selected-historical-interest-rates/

I took the $1584 in our 1936 scenario and added annual compounding Bank of Canada bank interest rate for January of each year as found here:

http://w ww.bankofcanada.ca/wp-content/uploads/2010/09/selected_historical_page1_2_3.pdf

Compounded annually, works out to $72,295!

I love this quote:
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
- Albert Einstein

Lots of caveats like compounding frequency, taxes on realized gains or interest, actual rate you would get etc. but an interesting comparison on the power of compounded interest.

Year Int. Rate Principal Annual Interest
1936 2.50% $1,584.00 $39.60
1937 2.50% $1,623.60 $40.59
1938 2.50% $1,664.19 $41.60
1939 2.50% $1,705.79 $42.64
1940 2.50% $1,748.44 $43.71
1941 2.50% $1,792.15 $44.80
1942 2.50% $1,836.95 $45.92
1943 2.50% $1,882.88 $47.07
1944 2.50% $1,929.95 $48.25
1945 1.50% $1,978.20 $29.67
1946 1.50% $2,007.87 $30.12
1947 1.50% $2,037.99 $30.57
1948 1.50% $2,068.56 $31.03
1949 1.50% $2,099.59 $31.49
1950 1.50% $2,131.08 $31.97
1951 2.00% $2,163.05 $43.26
1952 2.00% $2,206.31 $44.13
1953 2.00% $2,250.44 $45.01
1954 2.00% $2,295.44 $45.91
1955 2.00% $2,341.35 $46.83
1956 2.75% $2,388.18 $65.67
1957 3.97% $2,453.86 $97.42
1958 3.83% $2,551.27 $97.71
1959 3.71% $2,648.99 $98.28
1960 4.91% $2,747.26 $134.89
1961 3.47% $2,882.15 $100.01
1962 3.35% $2,982.17 $99.90
1963 4.00% $3,082.07 $123.28
1964 4.00% $3,205.35 $128.21
1965 4.25% $3,333.57 $141.68
1966 4.75% $3,475.24 $165.07
1967 5.25% $3,640.32 $191.12
1968 7.00% $3,831.43 $268.20
1969 6.50% $4,099.63 $266.48
1970 8.00% $4,366.11 $349.29
1971 6.00% $4,715.40 $282.92
1972 4.75% $4,998.32 $237.42
1973 4.75% $5,235.74 $248.70
1974 7.25% $5,484.44 $397.62
1975 8.25% $5,882.06 $485.27
1976 9.00% $6,367.33 $573.06
1977 8.50% $6,940.39 $589.93
1978 7.50% $7,530.32 $564.77
1979 11.20% $8,095.10 $906.65
1980 14.00% $9,001.75 $1,260.24
1981 17.00% $10,261.99 $1,744.54
1982 14.70% $12,006.53 $1,764.96
1983 9.81% $13,771.49 $1,350.98
1984 9.98% $15,122.48 $1,509.22
1985 9.66% $16,631.70 $1,606.62
1986 10.30% $18,238.32 $1,878.55
1987 7.74% $20,116.87 $1,557.05
1988 8.63% $21,673.91 $1,870.46
1989 11.50% $23,544.37 $2,707.60
1990 12.20% $26,251.98 $3,202.74
1991 10.80% $29,454.72 $3,181.11
1992 7.08% $32,635.83 $2,310.62
1993 6.81% $34,946.44 $2,379.85
1994 3.88% $37,326.30 $1,448.26
1995 8.38% $38,774.56 $3,249.31
1996 5.37% $42,023.86 $2,256.68
1997 3.25% $44,280.55 $1,439.12
1998 4.50% $45,719.66 $2,057.38
1999 5.25% $47,777.05 $2,508.30
2000 5.00% $50,285.34 $2,514.27
2001 5.75% $52,799.61 $3,035.98
2002 2.25% $55,835.59 $1,256.30
2003 3.00% $57,091.89 $1,712.76
2004 2.75% $58,804.65 $1,617.13
2005 2.75% $60,421.77 $1,661.60
2006 3.75% $62,083.37 $2,328.13
2007 4.50% $64,411.50 $2,898.52
2008 4.25% $67,310.02 $2,860.68
2009 1.25% $70,170.69 $877.13
2010 0.50% $71,047.83 $355.24
2011 1.25% $71,403.07 $892.54
2012 1.25% $72,295.60 $903.70
 
When sh*t hits the proverbial fan, what would you rather have? guns or gold? I can tell you that somebody knocking on your door won't be begging to buy a few oz's of f**king gold! :) Timing is everything. Water is also a good investment!
 
It's not exactly a 'one or the other' kind of thing, you can have both. I sold all my gold when it hit $1650.00 and paid off credit card debt, probably a good idea as I knew it wasn't going to go up any further until after all of the nations push down the price when they liquidate their reserves. Once it drops again, scoop up as much as possible because that means the european nations have dumped their stocks and it will go up over 2k.
 
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