Gun Boom Stock : One Lesson Gold Investors Must Learn From Gun Boom
Tue, Feb 5, 2013
1 Lesson Investors Should Learn From Gun Boom
Gold investors and those thinking about Investing In Gold can learn a lot from the current gun control debate and what’s happening at gun dealers across the country.
The race for gun control has begun in earnest in the past few weeks.
Consumers, fearing regulations which would prevent them from buying certain guns, aren’t waiting for the regulations to be set. They’re buying now. And they’re buying out most of the available inventory they can find.
Empty shelves at gun shops have been reported from Boise, Idaho to Houston, Texas and everywhere in between.
KHOU.com out of Houston reports, “Looking at the shelves at Class 3 Weapons for the past several years, there have always been as many as 40 rifles on the wall — all of them of the AR-15 variety. There haven’t been any since Monday at noon.”
At this point, if you’re looking for a pistol or rifle which is most at risk of being regulated, you’re going to have to wait up to a couple of months. There’s just no supply available.
That’s what fears over potential supply disruptions of any consumer good can do to any market.
It happens fast too.
That’s why for those of us preparing for the worst when it comes to the long-term value of the dollar, the current surge in gun sales is indicative of what the Future Gold Market will look like.
When the demand for gold reaches its top-of-the-bubble climax, there won’t be any gold available.
In fact, we’re already starting to see the early signs of what the precious metals boom will look like.
The U.S. Mint recently stated demand for U.S. Silver Eagles is so high that is has sold out and new buyers are going to have to wait:
The United States Mint has temporarily sold out of 2013 American Eagle Silver Bullion coins. As a result, sales are suspended until we can build up an inventory of these coins. Sales will resume on or about the week of January 28, 2013, via the allocation process.
This delay, although not unprecedented (we saw similar waiting periods enforced during the 2008 credit crisis), is a precursor of what the precious metals boom will eventually look like when it reaches its peak.
How do we know this?
Simply put, we’ve seen it and profited from it many times before.
Contrarian investment trends go through certain periods in their cycles.
We’ve often stated how investment bubbles are formed. They always start off as a simple, easy-to-understand story when the early money buys in. As gains are made and asset values rise in the sector, the original story spreads and gains more widespread traction.
As the investment values rise faster and higher, they attract even more attention. At this point greed sets in, everyone starts to believe the story that started the trend will go on forever, and the aggressive buying at this stage pushes the investment values to unsustainable heights.
Eventually reality outweighs greed and the story. The whole bubble bursts and the asset values crash and all of the latecomers who thought they were going to get rich to lose a fortune.
Gold and precious metals will be no different.
At some point in the future – likely when confidence in the U.S. dollar has declined so much that everyone is clamoring to buy gold and precious metals to protect themselves from further currency devaluation – coin dealers will look like gun dealers do right now.
That’s why now continues to be a good time to buy gold. The prices which you pay for gold are reasonable. It’s available everywhere. You can walk into your local coin dealer and buy plenty of gold. The gold investment market won’t always be like it is now.
Executive Editor, Contrarian Insights
The Group of Big Investors in United States.
The how to invest in commodities stock 2015 can correct any fluctuations that investors may have felt recently in their fortunes. The beginning of the year was on a shaky note with the direction of profits not very clear. However, with the months wearing on, the commodities market is once..... Read More...
The is investing in gold a good idea right now is the hot conversation for small and big time investors alike. With the crash in real estate markets and the continued disfavor of bonds, gold is the only option which is fast emerging as the fail safe investment. Moreover, gold..... Read More...
The top ten best stocks to invest in 2015 can help investors consolidate gains this year with a great margin. These are the stocks one’s would prefer to buy and hold onto for a long time. There are more winners here than losers which sped way past the rest..... Read More...
Best Investment Strategy for High Income Earners, Learn Here Investment Strategies for Buying Stocks
The investment strategies for high income earners are a few of the best special financial tips to help in wealth management. The top 2-3 per cent of the high income earners has a challenging task in holding onto their money and investment may be the only way out to avoid..... Read More...
The how to make money in the stock market with little money is a sure fire way to get out a less than perfect existence. It is a means other catapult in to luxury almost overnight as has been shown by many an investor in all times. Investing in the..... Read More...