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  1. Default 2nd Amendment play

    With the assault on the 2nd Amendment coming I see opportunities both short term and long term.

    Gun and Ammo sales are booming across the country for very good reason, so I would expect the next couple quarters to be very good

    http://news.google.com/news?hl=en&q=Gun sales boom&um=1&ie=UTF-8&sa=N&tab=wn

    up 30 to 40% in some areas

    Long term, shorting whats is possible to short might be a great play as the incoming administration will do what it can do make ammunition next to impossible to afford, and gun ownership of certain makes and models illegal to own.

    http://finance.yahoo.com/q/cq?d=v1&s=oln, gmtn,swhc,rgr

    anyone know of other retailers or manufacturers in this area ?




    http://stockcharts.com/h-sc/ui?s=RGR...d=p28095878458 << watching this closely to see if it falls beneath MA 50 or continues up


  2. Default

    SWHC reports monday (Q2 of their '09 fiscal) and the rest report in jan/feb '09 (Q4 of their '08 fiscal)
    Seems to me if your thesis is correct the SWHC earnings should be a heads up on the others. The problem is how much of the Q2 is post election data and if it can be the heads up for the rest, or if you need to see the GMT (19-29 Jan is the approx report date for their Q4 '08) as the first of the relevant data.
    I would be long the stock into earnings with out of the money puts out a few months ahead to make best use of the play.
    Here are potential snags:
    If the play is correct but the companies offer forward guidance that is negative the long stock positions may be less than spectacular or worse the stock price could be flat for a couple months making both the long stock and put positions lackluster.
    The best case would be a nice earnings surprise to the upside, no guidance, and a drop in the stock price as the Obama policies are announced.

    Overall I like this play, and I'll look more closely at the options prices to see what I think is the best strike to get value. Downside protection is expensive market wide these days so that could put a wrench into things.

    Good to see you back Freak.

  3. Default

    Oh, I can see it: please, take advantage of the pop from gun and personal defense companies this quarter, because it won't happen again (because nothing will happen to the 2nd amendment). Any issue concerning guns have, and will continue to be, very local in scale.

  4. Default

    Forgive me but I don't know if I understand you, are you saying the thesis Freak puts forth (and I agree with) is invalid? I don't think the second amendment is going anywhere, but the way the market feels about the Obama policies on the Gun matter, and the large majority on the dem side has to be downforces on the stocks, and the increase in sales since the election is certainly cited enough in the press.
    I am a pretty liberal character but I purchased a weapon based on this very premise. It may be a lot tougher to get one next year



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