22 ammo in quantity as an investment tool

In My Humble Opinion
1

There have been numerous articles and threads like this oneover the years about how hard 22lr ammo is to get at reasonable prices since there is a lot of buying by preppers and gun enthusiasts who fear future clampdowns on availability. In a number of cases you have people buying thousands to hundreds of thousands of rounds, often at historically elevated prices, in case society collapses or future access to ammo becomes an issue.

In this context can someone who has (say) 100,000 rounds they stacked up over the last 10 years recover their costs if a large medical bill or other expense needs to be taken care of? How could an individual sell large quantities of ammo? Where can you do this? Online somewhere or what? Is there a price penalty for aged vs new ammo?

Is there any context in which buying 22 ammo in quantity today while conservatives are in power could be considered a good investment in terms of being able to flip it at a decent profit a few years from now if the political winds switch?

2

Isn’t a modern bullet filled with black powder to propel it: so chemicals, which would degrade over time?

3

If you sell boxes of ammunition, how would the buyer know you didn’t mess with them and they are substandard? Back in the Wild West, when gunpowder and steel balls were sold seperately, buyers had to watch closely that the powder hadn’t been mixed with black Wood ash. Or do you plan to only sell to preppers because they aren’t the brightest to start with?

4

22 ammo currently costs about 5 cents per round so your initial investment for 100,000 rounds is $5,000. It seems you’re looking at this as an investment but it appears to be more of a gamble based on an uncertain future of supply/demand, politics and the ability to quickly sell the ammo when you need to convert it to cash for possible medical expenses. Let’s suppose that in 10 years, the cost of ammo doubles thus providing you with a $5,000 profit.

Seems pretty good but had you invested the initial $5,000 and averaged an annual return of 4%, you would realize a gain of about $2,400. This means that by investing in the ammo, your total gain above more conventional methods is about $2,600 with what might be a best case scenario involving the ammo doubling in price. Is it worth it?

Personally, I would not do it because the ammo route involves too many variables.

5

Let’s assume this is branded ammo being sold and buyers and sellers are reasonably trustworthy. Is there the opportunity to buy now at X and sell in 2021 at (say) 2X to 3X?

6

Okay, I don’t know how that would practically work, but to continue with your assumption:

I can only see 2nd-hand ammunition being attractive at 2X if the Price for new (= directly from the manufacturer) ammunition is 4X.

So basically, you’re betting on how the Prices will develop - and that isn’t much different from buying Gold or any other commodity and betting Price will go up enough to make a Profit, instead of down. Looking at past data, the real Gold Price fluctuates, though. I don’t know past Prices of ammunition.

Maybe there is some infighting between various fringe Groups, and ammunition is used up, becoming scarce. Maybe there is an infighting, and Group A wins, taking all the stores of Group B for themselves, causing a glut in the market. Maybe China starts mass-producing cheaper ammunition. Maybe that one fringe Group actually builds their libertarian paradise where they manufacture ammunition the whole day, causing a glut and dropped Prices. Maybe the Prices for metal rise so high that it’s worth more to disassemble the bullets and melt down the brass (or whatever they’re made out of today).

If you want to bet on something, I wouldn’t recommend something that could degrade or rust, and that is hundreds of Units, each worth Little, but taking up a lot of storage space. Official Gold coins are easier to store, and can be sold at least for the minted value. (You have to worry about thieves - but with ammo, if you shoot back, you’re wasting your Investment! :wink: )

7

availability and price of .22LR has returned to somewhat normal. Stores have it on the shelf, and there’s plenty available any time I go to a gun & knife show. Those idiot “preppers” who spent a fortune on stockpiling it as either an “investment” or planning on using it as “currency” after TEOTWAWKI simply wasted their money.

smokeless powder. modern ammunition uses smokeless powder which is nitrocellulose-based, often in combination with nitroglycerin. actual black powder is rarely used anymore except in muzzleloaders or vintage firearms which can’t handle the pressures generated by smokeless. It’s messy stuff which leaves a lot of corrosive fouling behind.

8

Okay, but according to Wikipedia Smokeless powder - Wikipedia it still deterioates, even if the chemical composition is not of original black powder. So not good for Long-term storage.

9

My question would be whether you’d be allowed, as a private individual, to sell the ammo when you want to? Do you need a license?

Also, I would think if there’s a fire in your house, the ammo might be a hazard for the fire department.

10

With our new president and GOP control of Congress are people still worrying about controlled availability? I’d assume that pretty soon you’ll get a box of ammo with each fill-up at the gas station. I thought this was all “Obama’s gonna take our guns!” nonsense.

This seems like a bad time to look at ammo as an investment opportunity. [Edit: I suppose, based off the OP, this could be a “buy low, sell high” thing but is there any indication that prices are dropping? I don’t keep up]

11

no, not that I’m aware of.

the risk isn’t zero, but the standard protective equipment firefighters use should be sufficient.

w/o a chamber and some sort of barrel, the gunpowder can't generate sufficient pressure to propel the bullet with any real velocity. the larger risk would be from fragments of brass from the case coming apart, but a heavy jacket/pants and eye protection should be sufficient.

In the case of .22LR, anecdotally the prices I’ve paid/seen recently have dropped from about $20 for a box of 50 to $13.

12

I’ve purchased and fired plenty of 50+ year old surplus military ammo that is still fine (7.62X39 and 7.62X54). Some of the older stuff is quite corrosive but if you clean up immediately after shooting, no worries. When I say plenty, I mean several thousand. If it’s deteriorating, it must be on the half-life order or uranium :smiley:

13

It can only work if you can buy low and sell high. So how exactly can you buy ammo for lower than Remington can manufacture it, and sell it for higher than Remington can sell it?

It’s not enough to note that the price of a commodity has gone up to make a profit on it. You have to either have a source for that commodity lower than the current market value (for example, you bought it back when it was lower in price), or you have to expect that the price will continue to rise, such that if you bought it now at the current price it will be even more expensive later, and you can sell at a profit.

Notice the problem in both these scenarios. Do you have the commodity already? Probably not. Will the commodity continue to rise in price? Yes, no, maybe? Maybe it will continue to rise, in which case selling now is the wrong call, and you should buy now. But if you buy now because the price is rising, when exactly do you sell? When the price starts to drop?

This is what causes volatility in commodity speculation. But it’s fueled by people losing money. They buy when the price rises because hey the price is going up! And then the price drops, and they’re stuck with selling at the lower price. Buy high, sell low is a no-good way to invest.

If there really is a permanently higher price for ammo, the people to capitalize on it are the ammo manufacturers. They only have so much excess capacity in their manufacturing chain, and so when there are temporary price spikes they can only increase production by so much. To do more they have to add capital goods and hire more workers. So will they do that? Only if they think the increased demand is going to continue. Will it? Yes, no, maybe.

But the real answer, if there really is a supply-demand mismatch, is that manufacturers will try to increase supply to match demand so they can make more money. If you think you can buy ammo for lower than Remington can make it, and sell it for higher than they can sell it, then go right ahead with your plan. If that doesn’t sound very likely, then stockpiling ammo probably isn’t a good investment.

It might be a good idea for other reasons–if you expect TEOTWAWKI to happen then a couple crates of ammo in your gun safe might be a really good idea. But that’s not an investment, that’s disaster prepping. You aren’t going to sell that ammo after The End of the World, are you? And if the price is high now, remember that you’re buying high. But that’s because you want the ammo today so you can have it tomorrow. Not because you’re going to buy it today and sell it tomorrow.

14

If the price has since stabilized, and the shelves are well stocked, where’s the incentive for people to buy second hand from a stranger?

15

No; as someone else points out modern smokeless powder is pretty stable. What does degrade slightly sometimes is the brass but since .22 rimfire isn’t reloaded that is less of an issue. I pick up a lot of dated ammo due to the calibers I shoot and other than some cases splitting when fired I’ve had no real issues with reliability or function/accuracy.

In theory you can stockpile ammo like some people do silver but the chances of making a real serious profit are slimmer. There have been 2 major price increases/fluctuations in the past 40 years and ammo is pretty easy to sell through shows and clubs. And during the last “shortage” the last couple years I did see some serious loads of N-OS (New Old Stock) stuff hitting the tables and some shops. But I would still stay more to conventional investments over ammo. The chances of guessing what calibers will “do best” just make it a silly game to play. Last time around it was pistol rounds, this time around rimfire; anything else was minimal gain. Who knows what the hot ticket will be next time?

16

Wait, what?!? Did you mean to say “box of 500?”

In Canada, I’m paying $3.19 CDN for a 50rnd box of Federal blue (my local Bass Pro). Average price here is about $5 for standard stuff.

17

The preppers are looking to scenario where cash is worthless, credit cards worthless, no one cares if you have a license to sell ammo. .22 ammo would be what you trade to someone that has a trunk full of canned goods to get some beans or tomato sauce. They would have a going rate and I’d assume CCI Mini Mags would be more desirable than CCI Standard velocity. In that type of scenario I’d think people would soon get very skilled at identifying specific .22 loads and spotting rounds that had been altered.

.22 is a multi use round, not ideal for defense but usable, good for small game hunting.

18

The crazy wing of the 2ndAm crowd, including the preppers and so forth, use absolutely every turn in government to justify piling goods higher, hide more weapons and ammo, and shriek about the coming confiscation of everyone’s guns.

Let’s face it, if Obama didn’t do it, no leftish government will. And while I’m sure the prepper vote went 100% for Trump, I think they have more to fear from a right-wing government unconcerned with those “just an amendment” rules than from even the most liberal Constitutional scholar at the helm.

But even then, it’s not really justification for stockpiling hundreds of thousands of light-duty rounds that will bounce off almost anything military-grade.

19

shit, no, I meant a box of 100. I typically buy CCI Mini-Mags which seem to be the most consistent in my (built up) 10/22 but are more spendy. I haven’t looked at the cheap stuff in a while.

20

Isn’t opening a crate of surplus ammo the best feeling in the world? I even like the unboxing videos on YouTube.

Speaking of YouTube, I watched a guy fire 90-something year old .45 ACP (packaged in 1918, video is a couple of years old). Fired fine, as far as I could tell. Probably not going to shoot inch groups at 100 yards though.