Why gun stocks soared after Obama's win

In a repeat of 2008, traders anticipated an increase in firearm sales after the election.

By Kim Peterson Nov 8, 2012 2:41AM
Updated 12:25 p.m. ET

In a reaction that surprised absolutely no one, investors rushed into gun stocks after President Barack Obama's win, expecting firearm sales to soar soon.

Gun makers Smith & Wesson Holding (SWHC) and Sturm Ruger (RGR) rose sharply Wednesday in a repeat of sorts of the response to Obama's first presidential victory in 2008. The stocks were up again in Thursday's trading. Gun stocks have performed well over the four years of Obama's term. Sturm Ruger, for example, rose from $7.04 on Election Day in 2008 to $50 Thursday.
But investors think the stocks have farther to go, propelled by fears that Obama will crack down on guns in his second term.

Sturm Ruger shares rose 6.8% Wednesday and another 4.8% Thursday. Smith & Wesson shares rose 9.6% Wednesday and another 3.8% Thursday. By comparison, the Standard & Poor's 500 Index ($INX) fell nearly 2.4% Wednesday and was down slightly Thursday.Ruger pistols © Getty Images

The National Rifle Association certainly contributed to fears of expanded gun control in Obama's second term. "An anti-gun Supreme Court, a U.N. Arms Trade Treaty, and a sweeping gun ban aren't just a possibility in a second Obama term," the association's CEO, Wayne LaPierre, wrote on the group's website. "They're a near certainty."

But Obama hasn't taken much action on gun control. In fact, he signed legislation allowing loaded guns into national parks and on Amtrak trains. Still, in the second presidential debate, Obama mentioned the possibility of keeping automatic weapons out of the hands of criminals and the mentally ill.

"Part of it is seeing if we can get an assault weapons ban reintroduced, but part of it is also looking at other sources of the violence, because frankly, in my hometown of Chicago, there’s an awful lot of violence, and they’re not using AK-47s, they’re using cheap handguns," he said.

That comment may have triggered a consumer fear that gun sales will see tighter regulations. In October, the number of federal background checks on potential gun buyers rose 10.6% from the month before to 1.61 million, according to the FBI.

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Tags: RGRSWHC
835Comments
Nov 8, 2012 12:12PM
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I am a gun owner but that does not mean I think every idiot has the right to own a gun. All you  jerks that blame Obama are just that JERKS! Actually you are RACIST'S.
Nov 8, 2012 12:11PM
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Obama knows nothing.  Criminals and the mentally ill are already prohibited to own guns.  Just enforce the existing laws.  You know, uphold the oath you took 4 years ago.
Nov 8, 2012 12:09PM
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for usa/no party.how dumb can you get.he cant do it.know you policys.it is up to the branchs of goverment.he can only make a bill.it takes a vote by the house,senate.etc.i own guns,hunt.but i dont take a ak-47 to hunt.their wont be any meat left.ask the army ,navy etc what the ak-47 is used for.....grow up.thks 2012
Nov 8, 2012 12:06PM
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If you're scared...Goto church!...Or hide in a cave like AlQiada....
Nov 8, 2012 12:05PM
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Thanks to the NRA you can hardly buy a gun without a loan, it happens everytime they put a Dem in office they run their mouth and capitalize off people that actually believe that Dems are going to do anything to your guns.  I don't blame Obama for the reason guns go up in price, I blame it on the morons with the NRA, and the idiots that actually go out buying guns in fear.  Theres this new thing called Google do some research, Obama actually passed laws letting you carry guns in public parks.  Get smart America, NRA is crooked!!!
Nov 8, 2012 12:04PM
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Very-Lame said;
"An unhealthy America, is an at risk America.
People will NOT give up their pork rinds and Limbaugh, they'll just give up on facing the Reality that they can't handle progressing into the 21st Century and get left behind."

"Thanks, Mr. Kyte, your wisdom is always fun to work with because it's so wrong to begin with. "

And this is your intellectual response? You ever wonder why people think you're a dikwad??? What a moron..........
Nov 8, 2012 12:01PM
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"An unhealthy America, is an at risk America.
People will NOT give up their pork rinds and Limbaugh, they'll just give up on facing the Reality that they can't handle progressing into the 21st Century and get left behind."

Thanks, Mr. Kyte, your wisdom is always fun to work with because it's so wrong to begin with.
Nov 8, 2012 11:59AM
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A sudden acceleration in gun sales? Bet you'll find the buyers already have too many guns and not enough commonsense or rationale. How many people over 50 suddenly rationalize that they have possessions worth shooting someone else over? How many start believing themselves "right" when they obviously aren't. How many are in poor physical and mental states of health and expect guns to compensate for deficiencies? How many look in the mirror and not see that they are kidding themselves about their lives and wasting time HATING when they could be a part of the shift? The answer to all those questions is-- MOST.

The best part is-- the rest of us will just progress. That means these wackos must leave the nest and face arrest. Before the next Presidential election, gun-toting losers will have burned out from too much Viagra and Budweiser cocktails and be foiled by the natural prosperity that will follow our forthcoming correction. 

Nov 8, 2012 11:59AM
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An unarmed America, is an at risk America. 

People will NOT give up their guns, they'll just give up on owning them legally.
Nov 8, 2012 11:54AM
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JSCMARINE WROTE:
HEY OBAMM---FROM my COLD DEAD HAND---and I will take many with me!===================

 

Hey dumb a$$ don't know if you noticed but the president isn't trying to take them out of you dumb a$$ cold dead hands.

 

And they wonder why they lost,LOL at the LOSER!

Nov 8, 2012 11:51AM
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The only people who are making out well from this firearms hysteria are the people who sell guns and ammo. After 2008 the demand for ammo was so high that some large retail dealers limited the amount you could buy.  Nothing happened.  No insurrection, No space alien invasion, no zombies and no treaty from the UN.  However a lot of gun dealers managed to fill up Americas basements with thousands of rounds of ammunition.  I say this as a shooter who has decided not to give in to hysteria.  Oh yeah, the NRA has profited handsomely from wave after wave of hysteria.  As for presidents I was much more afraid of Romney.  After all it was the Mormons who disarmed the settlers at Mountain Meadows and then massacred them.
Nov 8, 2012 11:49AM
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HEY OBAMM---FROM my COLD DEAD HAND---and I will take many with me!
Nov 8, 2012 11:47AM
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martin, about as dumb as buying Apple stocks before the next iPad, iPod, iPhone comes out every year......

 

You don't invest in a company selling crap in which the demand is low.

Nov 8, 2012 11:45AM
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We don't need to restrict gun sales any more, we need to ENFORCE the laws on the books and eliminate the muderers doing the crimes!

 

Why do we allow criminals to sit in prisone for YEARS before even being tried, i.e. the Fort Hood Shooter?  And then give them a 15 year sentence to be on parole in 5?

 

Our prisons are full of murderers and rapists that are repeat offenders, yet taxpayers have to keep them alive.  Lets clean house and get rid of this scum that will NEVER be a productive member of society!

 

And I do support the actions Obama has taken in his first term.  Lets just hope the fearmongering is not right..........

Nov 8, 2012 11:45AM
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Wow, a bunch of nuts on this thread.  Calm down, nothing big is happening.  Chill out and go sight in your deer rifles or something. 
Nov 8, 2012 11:41AM
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Guns and ammunition are an appreciating commodity that are easilly traded when the currency is devalued. Don't buy gun stocks, Buy guns and ammunition, they won't depreciate.
Nov 8, 2012 11:40AM
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sounds like a stupid rally to me, but if you can catch the updraft and get out in time, more power to you.
Nov 8, 2012 11:33AM
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Obama, The number one sales person for guns.
Nov 8, 2012 11:30AM
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Everyone calm down.  The sky isn't falling.  America today is the same as it's been for the past 30+ years:  the Big Banks are in charge.
Nov 8, 2012 11:28AM
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We all need to arm ourselves.  Tyranny is rampant.  Only the extremely foolish believe that obama is actually trying to help this once great nation. Terribly sad. 
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