I found this article interesting because events like the shootings in Florida this week have implications in the financial world. I first learned about this in my Modern Portfolio Theory class following the Las Vegas shootings last semester. Usually after a tragic event like this, the stock prices of gun manufacturing companies tend to rise initially. A large reason for this price increase is that people would be more willing to buy guns sooner out of fear of more regulation on guns. The increase in gun laws would lead to a rise in future gun prices.
A few other interesting facts from this article are that the stock prices of many of these companies have since dropped since the early increase on Thursday morning. In addition, gun manufacturing companies have not been performing as well under the Trump administration. It will be interesting to see if new gun laws will be implemented by the government, and if so, the effects they will have on the market for guns.
http://www.businessinsider.com/gun-stocks-after-florida-school-shooting-2018-2
10 comments:
I think this is a really interesting combination of expectations and policy - I am not surprised that gun sales have been relatively low since President Trump's elections, because gun owners have no immediate fear that gun sales will be blocked in any way. However, in the 8 years President Obama was in office, the gun industry grew 158% due to this fear.
https://www.forbes.com/sites/frankminiter/2016/04/12/the-gun-industry-says-it-has-grown-158-since-obama-took-office/#726bcd3f7f4e
I also think this a really interesting point -- There's been a story on NPR today that follows a man in Florida who voluntarily brought his AR-15 rifle to the local police station and asked them to destroy it, under the argument that while he felt strongly about gun owner rights, the shooting had made him feel that no one needed that sort of a weapon and he would be the one to "be the change he wanted to see in the world" (cliché but direct quote). While I know this sort of personal change won't happen on a large scale, I wonder if the combination of no immediate fear of gun regulation and the ability to see inside school shootings by the videos taken by students might contribute to an even lower amount of gun sales. Maybe, in this situation, government regulation would reverse a already existing mentality of society.
I think it's important to understand how significant events in the course of history affect markets for different products. In this case how the Florida shooting event is impacting the gun market with uncertainty.
This is very interesting. I remember after the Orlando shooting gun sales went up as well. It would be interesting to see the numbers based on the type of firearm and its relevant sales. I think firearms are the perfect example of shifts in demand based upon consumer expectations.
This is a very interesting article, because like Nate, I would expect gun manufacturer stocks to increase significantly after an event like this. We have already been seeing a lot of calls for gun reform and other talks to significantly increase regulation on guns. I expect that people don't think Trump will act in any way, and thus the gun market won't really change. However, I believe some type of regulations will be imposed which will make it harder to buy guns and we could stock values of gun manufacturers rise into the future.
Even though the stock prices have not risen immediately, I can see that it will happen in the future, regardless of if regulations become more strict or not. Americans will find a need now, more than ever, to purchase a gun as a means of protection. If these events do not subside, then more and more people will purchase a gun to feel safe.
Events like these will always cause a dramatic affect to the market they are in. And with a problem with guns it will be even more drastic because of how many people have already been looking into it because of all the mass shootings. It will be interesting to see if it can possibly bounce back but it will be hard.
great read, i agree with Adam that the stock prices will probably rise in the future. The shooting in Florida will most likely affect the market sooner or later.
It is not surprising that the gun stocks increase after shooting events. When the shooting happens, people usually feel unsafety and they want to protect themselves by purchasing guns. Also, it increases the chance that the government publish some policies to against gun market and make guns more difficult to get, so people are more likely to purchase guns after shooting. This explains why the stocks increase. Moreover, this would make government even harder to control the guns, since stakeholders are increased, and if gun holders increase, I am sure that shooting would happen more.
I agree with Madeleine. I don't think getting guns banned or having stronger restrictions is a real fear for a lot of Americans because if the president doesn't seem concerned about it I don't see why others would either. Even when Obama called for more gun restrictions, barely any pieces of legislation could be passed and was often blocked by congress. So maybe people abandoned the thought of tighter gun restrictions after nothing really changed from a president that actually wanted them.
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