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Thu Feb 21, 2013, 12:07 AM

Guns: BUY. Gun stocks: SELL

There’s a paradox in the weapons market.

Pension funds are selling their investments in weapons makers, reacting to the Connecticut school shooting on Dec. 14 that led to the deaths of 26 people, most of whom were children. The largest pension fund in the US, Calpers, announced yesterday it was selling $5 million worth of holdings in gun and ammunition-clip makers Smith & Wesson and Sturm, Ruger & Co.

“Eliminating these investments allows us to keep our duty to our members and, in some small part, do what we can to help stop the proliferation of weapons that can magnify and multiply horrific acts of mass violence,” Rob Feckner, president of Calpers’s Board of Administration, said in a statement.

But even as the funds sell off their holdings, share prices for companies like Smith & Wesson have been on the rise since the Connecticut shooting, as Americans worried about possible stricter gun controls flock to the gun stores. In December alone, the FBI reported a 39% increase in background checks needed for gun purchases, a record.

Smith & Wesson’s stock has risen by almost 20% since mid-December and is trading around $9.30. Shares in Sturm, Ruger have gone up by more than 30% since the school massacre.
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http://qz.com/55371/guns-buy-gun-stocks-sell

18 replies, 1913 views

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Response to Renew Deal (Original post)

Thu Feb 21, 2013, 12:12 AM

1. Smith and Wesson has a P/E ratio of less than 11?

I may have to buy some.

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Response to Renew Deal (Original post)

Thu Feb 21, 2013, 12:31 AM

2. The body of the story indicates something different from the headline.

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Response to Eleanors38 (Reply #2)

Thu Feb 21, 2013, 12:53 AM

4. I agree

But I didn't want to interfere with it. There is legitimacy to the headline. Certain groups are selling.

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Response to Renew Deal (Reply #4)

Thu Feb 21, 2013, 12:22 PM

11. I am aware of those efforts, though what effect they'll have is a mystery.

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Response to Renew Deal (Original post)

Thu Feb 21, 2013, 12:41 AM

3. how does selling a share to someone else limit proliferation?

 

That's like me selling one of my guns to get it off the street.


No, you are no longer profiting from that investment ;it's not like the company shuts down.

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Response to Renew Deal (Original post)

Thu Feb 21, 2013, 01:15 AM

5. Those funds are going to have a fun time explaining why they flushed money down the toilet.

 

You'd have thought they'd learned a lesson with Enron.

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Response to Renew Deal (Original post)

Thu Feb 21, 2013, 02:11 AM

6. As a member of Calpers, I applaud its sale of gun stocks.

I would not invest my personal money in gun stocks, and I am glad my pension fund is not investing in these merchants of death. There are plenty of other good investments for Calpers that don't have the negative societal consequences to America that these gun manufacturers do.

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Response to SunSeeker (Reply #6)


Response to SunSeeker (Reply #6)

Thu Feb 21, 2013, 07:10 AM

9. Doing about as good as Social Security RoI

 

http://www.calpers.ca.gov/index.jsp?bc=/about/press/pr-2012/july/preliminary-returns.xml


CalPERS 1 percent return is below the fund’s discount rate of 7.5 percent, a long-term hurdle lowered recently in response to a steady decline in inflation and as part of CalPERS routine evaluation of economic assumptions. CalPERS 20-year investment return is 7.7 percent.

“It’s important to remember that CalPERS is a long-term investor and one year of performance should not be interpreted as a signal about our ability to achieve our investment goals over the long-term,” said Henry Jones, Chair of CalPERS Investment Committee.


glad you're still confident.

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Response to iiibbb (Reply #9)

Thu Feb 21, 2013, 12:59 PM

12. That's still a lot better than wall street got my husband on his 401K for the last 10 years.

Thank God we have my Calpers pension coming.

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Response to SunSeeker (Reply #12)

Thu Feb 21, 2013, 01:39 PM

14. My index funds have done 10.45% over the last 10 years...

 

but if you are close to retirement... slow growth might mean more stability.

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Response to iiibbb (Reply #14)

Thu Feb 21, 2013, 01:41 PM

15. What is the name of your fund?

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Response to SunSeeker (Reply #15)

Thu Feb 21, 2013, 01:42 PM

16. the primary one is VGHCX

 

was bumpy after the crunch... but I've been in it since 1993


http://finance.yahoo.com/q/pm?s=VGHCX

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Response to iiibbb (Reply #16)

Thu Feb 21, 2013, 01:56 PM

17. It's return is 8.2 for the last 5 years. Yeah, I'd say that's bumpy.

Not much better than Calpers' return. Calpers lost a lot of money in crappy real estate development investments in the last 5 years, like the $1 Billion loss it suffered after falling for the Newhall Ranch con job--a development that not only ripped off Calpers but is ruining the enviroment in that area. I think they've cleaned house and are now trying to get back to the basics--and stick with ethical investments. I am confident this will improve their return. My husband's 401K should turn around too, thanks to Obama, but it has no guaranteed payout. Like I said, thank God for my Calpers pension.

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Response to Renew Deal (Original post)

Thu Feb 21, 2013, 06:24 AM

8. Bubble.

No different than dot coms, housing or tulips.

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Response to safeinOhio (Reply #8)

Thu Feb 21, 2013, 01:09 PM

13. Much different actually.

 

Firearms are durable goods that are not nearly as subject to speculative forces and greedy banks. Businesses that last decades to centuries.

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Response to Renew Deal (Original post)

Thu Feb 21, 2013, 09:51 AM

10. buy low. sell high.

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Response to Tuesday Afternoon (Reply #10)

Thu Feb 21, 2013, 01:56 PM

18. ........sell high

 

Looks like a good move to me!

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