Special Report: Gun Confiscation: An Investor's Guide to Crisis Investing

As the saying goes: buy fear, sell greed.

Usually this refers to the public reaction to stocks. A company puts out some bad news, investors panic and sell off, making the possibly valuable stock a steal for investors who know to buy.

Then, of course, when that fear dies down and everyone's buying again, the stocks rise and that same investor can sell at a premium.

But did you know this scenario doesn't just apply to stocks?

Oh no; public sentiment on practically anything can make an investment worthwhile.

The biggest dish on anyone's plate these days is the daily round of terrorist attacks and shootings. Overseas and at home, it seems a new tragedy is happening daily.

It's on the news, in the media, and at the forefront of every political campaign.

Something this big in the public eye can affect businesses not just where the action is happening, but all over the world.

And that means it's time to see exactly how investors can take advantage...

Gun to Your Head

Consider the situation we find ourselves in today:

The world is in chaos. More than one terrorist group is on the move. The U.S. and France had some of the most divisive presidential elections in history... And gun sales are on the rise.

According to the New York Times, gun sales peaked at the crossroads between the Sandy Hook Elementary shooting and the re-election of President Obama.

Since then, the highest spike was in December of 2015, when President Obama called for stricter gun laws following terrorist attacks.

gunThe biggest argument raging between regular citizens and politicians alike is whether or not it would be safer to remove all those weapons from the picture completely.

And this is where the fear kicks in.

It's referred to as Gun Control, or in some circles, Gun Confiscation.

People fear guns... but they also fear losing them.

And guess what? It doesn't even matter what side you're on in the argument.

As an investor, you want to be where the profits are...

No matter what, people are buying guns.

Whether it's in a mad scramble for gun rights, or fortifying for protection, firearms are a big deal.

The U.S. firearm industry, which includes guns and ammunition, is worth about $15 billion, and still growing. There are more than 300 million guns on the market in the U.S. alone — almost enough to arm nearly every single person in the country.

But it wasn't always like this. In fact, I'll bet you can guess the very day that the firearm industry skyrocketed into its current position.

After the events of September 11th, 2001, the number of background checks for new gun owners increased 22% in just a month! Actual sales went up as much as 12%.

Another boost came in 2012, after shootings in a Colorado movie theater and a Connecticut school were used as reasons for tighter restrictions on gun sales, as I mentioned above.

Whether those people were protecting their homes or protecting their rights, it was the gun companies that saw the most benefit.

And every time a new crisis pops up, so do the gun stocks.

The two biggest names in the firearm industry today are American Outdoor Brands Corporation (NASDAQ GS: AOBC) (formerly Smith & Wesson Holding Corp.)  and Sturm, Ruger & Co. Inc. (NYSE: RGR).

Both stocks have proven to be good for when fear is high. For instance, after the Sandy Hook Elementary shooting in 2012, American Outdoor Brands saw an increase in profits from $16.1 million to $78.7 million, and Sturm Ruger saw an increase from $70.6 million to a whopping $111.7 million!

American Outdoor's last quarterly report showed net sales up 3.6%, and revenue up a whopping 24.9%, to $903.2 million. 

Sturm, Ruger & Co. have a large market cap of $1.004 billion, and sells their products in both the U.S. and internationally. 

When tragedy strikes, the stocks go up. Quiet happens, and the stocks slip... until the next big threat.... and sadly, these days, it seems we wake up to mass shootings and terrorist attacks every day. 

And it's not just gun-specific stocks that will see the profits pile up. Electronic weapon and body cam maker Axon Enterprise, Inc. (NASDAQ GS: AAXN) (formerly TASER International) has seen much of the same benefit as the traditional weapons companies.

And they're capitalizing on it... They've recently narrowed their focus to body cameras and software for law enforcement agencies, and with the spate of controversial police shootings and public cry for responsibility, you can be sure they're in a great spot to make solid profits. 

After all, if the police end up being the only ones with guns, there will have to be some assurance that they're using them the right way.

To be sure, these stocks are going to keep heading up no matter what.

In times of crisis, this is the place smart investors keep a close eye on. Buy that fear, and take home your own form of financial safety.

Energy and Capital, Copyright © 2022, Angel Publishing LLC. All rights reserved. 3 E Read Street, Baltimore, MD 21202. Your privacy is important to us – we will never rent or sell your e-mail or personal information. Please read our Privacy Policy. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment advice. Read our Details and Disclosures.