“Everybody needs money,” Danny DeVito sneers at Gene Hackman in David Mamet’s classic movie Heist, “That’s why they call it ‘money.'” If Smith & Wesson is making ‘money’ hand over fist these days, why won’t the Wall Street Journal’s Marketwatch blog show them some love? Their headline? “Smith & Wesson’s Future Depends On Continued Paranoia.” This puzzles me, because last I checked the WSJ hadn’t waded into the blue state/red state debate. As capitalists, the only color they’re supposed to care about is green . . .
The header gives you the numbers. S&W had a banner 2013. Despite declines in government and rifle sales, their profits jumped by 42% in the third quarter of 2013 and their stock price got a nice 18% bounce this week. Those are astronomical numbers for a ‘legacy’ U.S.-based industrial manufacturing company.
Even gunnies acknowledge that numbers this good are too good to last. Level-headed analysts like Wedbush and Northland Capital have urged investors to be cautious before jumping on the S&W bandwagon, noting that 30% year-on-year increases in handgun sales simply can’t be sustained forever.
These analysts understand growth like this can only be sustained in the short term, that it’s almost always driven by external forces that disrupt the ordinary curves of supply and demand. In the case of firearms, those external forces are named Obama and Bloomberg.
WSJ blog’s headline doesn’t say that, though. It implies that S&W’s sales surge was driven by paranoid ‘Murricans buying (literally) insane quantities of handguns, because of fear and distrust of their gum’mint. If this were an oil bubble or a real estate bubble, the WSJ blog would call it just that: a bubble. But when it’s guns, it becomes ‘paranoia.’ Media bias much?