If you’re in the gun business, or even if you just like guns, the news has been pretty good for a pretty long time. First there was the Heller decision in 2008 which gave every American, or just about every American the unchallenged right to own a gun.  This was shortly followed by the election of Barack Obama, and gun sales started going through the roof.  Then we had a couple of more court cases and all of a sudden concealed-carry was permitted in all 50 states.  And finally, just when it looked like Obama was going to be a one-term President and gun sales started to slip, it was Mitt Romney who slipped instead, Obama and the FLOTUS didn’t have to move out of 1600 Pennsylvania Avenue and gun sales once again surged ahead.

But if this wasn’t enough to keep the gun business going, we than had the terrible tragedy at Sandy Hook which unleashed a national debate on gun control, the likes of which hadn’t been seen since  Clinton proposed the assault weapon ban in 1994. And while no new law was passed on Capitol Hill, the NRA and other pro-gun groups finally had real proof that gun owners faced the possibility of having some of their guns taken away, or at least having things made more difficult to get their hands on another gun. Which meant that gun sales, which had actually slowed considerably in the second half of 2012, then went through the roof beginning in 2013.  From November, 2012 through March, 2013, NICS conducted nearly 11.5 million checks, which was higher than the yearly total for 2007 and just one million short of the entire NICS background check number for 2008.

Best gun salesman ever!

Best gun salesman ever!

The demand for guns after Sandy Hook had its impact on the balance-sheets of the gun-makers’ as well.  Smith & Wesson’s stock price had been rumbling at between $5 and $7 a share through the mid-point of 2012.  It began moving up after Sandy Hook and was at 15 by March, 2014.  Ruger stock was bouncing around $40 a share in 2012 but briefly hit $80 at the beginning of 2014.  None of the other gun companies are publicly owned, but the Olin Corp., which owns Winchester ammunition (along with other companies largely producing chemicals) has seen a 25% increase in the value of its stock since the beginning of this year.

The standard joke in the gun business used to be that if you wanted to make a million dollars, you had to start with two million.  Guns were always a good cash flow but a lousy investment with thin margins, and demand tended to fall off just as quickly as it revved up.  But this time things looked different; no matter where you looked,  everyone was talking about guns and everyone seemed to want to buy a gun. At least that’s the way things were going until…now!

Let’s start with NICS.  In March the FBI reported the second-highest March numbers of all time, except that the number was actually a decrease of nearly 20% from the March totals from 2013.  The same pattern appeared again last month when April, 2014 saw the second-highest number of background checks for any April, except again the total was 13% below the same month in 2013.  But the big news was announced on Monday, when one of the nation’s largest sporting-goods chains, Dick’s, announced it would be revising its year-end forecast due to dismal returns from guns and golf.  Now the decline in golf has been going on for a few years, a combination of changing recreational habits and the aging of top-draw stars like Tiger Woods.  But Tiger kept golf on the front pages since the mid-90’s, while the skyrocketing demand for guns only commenced in 2008.

The dirty little secret about the gun business is that it grows only when gun owners are afraid that they might lose their guns. The real problem for the gun-makers is that, try as they might, they just can’t convince more than one-third of all Americans that life isn’t complete without a gun.  And if the Republicans really live up to their claims of recapturing the Senate at the end of this year, I won’t sell my guns but I’ll dump my Smith & Wesson stock.