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This Smith and Wesson Stock Chart Reveals Our Biggest Fear

Smith and Wesson stock is reaching heights never seen before in the history of the company. The stock price closed at $29.07 on Friday, just 30 cents shy of it’s all time high. However, that alone doesn’t tell the whole story.

Smith and Wesson stock has been tracing higher for the last five years. As you can see from the stock chart below, on Sept. 26, 2011, it traded at $2.52. If you would have bought then, you’d be looking at a 1,053 percent increase. Not bad for a five-year investment.

smith and wesson stock

Chart courtesy of Morningstar.com

The bulk of the rise in the stock price has occurred since January of 2015. Since that time Smith and Wesson stock has risen from around $10 per share to what we see today. Again, not a bad return for a year and a half investment.

So what’s driving the stock price? Well, in the most basic of investment world terms, it’s company sales. Just a few weeks ago the company announced fourth quarter sales of $221.1 million. That figure was an increase of 22.2% over the fourth quarter of last year.

So the company is growing by selling more of its product. Those sales are leading to increased profits and a healthier company balance sheet. Investors are taking notice and more are purchasing the stock for their portfolios (hence the rise in Smith and Wesson stock price).

“But what’s driving sales?” you might be asking. Well, in case you don’t know Smith and Wesson manufactures and sells firearm products and accessories. That’s right…it’s a gun company.

Fear Drives Gun Sales

Consumer behavior is a funny thing. We are driven to purchase goods and services by the current trends we see in society. And often times we spend our money based solely on fear.

smith and wesson stockWe fear missing out on the newest technology. “I have to keep up” we tell ourselves.

We fear missing out on the big sale. “There won’t ever be another deal like this one” we tell ourselves.

We fear being left out of a group. “I have to fit in” we tell ourselves.

So the logical question to ask is, “Are people buying more guns due to fear of something?” I’d have to say “Yes.” Although a 100% correlation of fear to gun sales isn’t evident, it’ seems logical that fear is at least one factor contributing to the results.

Some would argue that people are buying more guns for fear of the government. They’d say the government is going to step in and tighten gun control laws to make purchasing a handgun more difficult. Or, in an extreme scenario, they’d say the government wants to abolish gun rights altogether and come after what people already own.

While there may be those who think this way, I believe the fear that is driving gun sales and the Smith and Wesson stock price indicates a simpler explanation. At its most basic level the fear people are dealing with is something built into our human nature…and that is our desire to be and feel safe. We are fearing for our safety.

How Could You Feel 100% Safe After All This?

As you could see from the Smith and Wesson stock chart, the price began tracing upward around 2012 with a considerable move upward beginning in 2015. It makes sense considering some of the national and worldwide events that have happened since then. Here’s a short recap to jog your memory:

2012 – Sandy Hook Elementary School shooting leaves 20 children and six staff members dead

2013 – Boston Marathon terrorist bombing kills 3 and injures 264

2014 – Bus station bombing in Nigeria kills 88

2015 – Mass shooting at Emanuel African Methodist Episcopal Church in Charleston, South Carolina kills 9, including the senior pastor

2015 – Suicide bombings and mass shootings in Paris, France near the Stade de France kill 130 people at cafés, restaurants and music venues

2015 – Terrorists kill 14 and injure 22 at the Inland Regional Center in San Bernardino, California

2016 – Suicide bombers at the Brussels, Belgium airport and Maalbeek metro station kill 32

2016 – Orlando, Florida nightclub shooting kills 49

And just this past week a sniper took down five police officers in Dallas, Texas who were monitoring a demonstration march.

Honestly, this is just the tip of the iceberg of the violence that is going on around us. Most of it does not get reported about at the national level. What’s striking though is that the violence is happening in normal places where anyone might find themselves: at school, at your job, at a sporting event, in a restaurant, at the bus station or airport, in church.

It’s no wonder we don’t feel safe. And it’s no wonder people are taking measures to try and protect themselves.

Should I Buy a Gun, Smith and Wesson Stock or Both?

Gun ownership is such a private and emotional matter. I wouldn’t assume to lecture anyone on their decision to purchase or not to purchase a gun. I have friends that have them and friends that avoid them and get the logic from both sides.

I do know this though – gun ownership won’t change the human heart. More guns in the hands of people may reduce certain types of violence by making criminals more hesitant but it won’t change their evil intent. The Bible says in Jeremiah 17:9 that the “heart is deceitful above all things, and desperately wicked; who can know it?” Therein lies the real problem.

Ultimately, it’s not the guns we should fear or our own safety. It’s the human heart. Wicked acts of violence show us what man is capable of when their heart isn’t right before God.

If you are into investing you might look at buying Smith and Wesson stock. But you’ll have to do your own due diligence to see if the stock is right for you.

I wouldn’t buy it though based on the idea that fear alone will continue to drive gun sales. Fears can subside over time. If that happens, sales may decline. So look for other stock and company metrics to finalize your decision to buy or not. A good place to start your research is at ModestMoney.com and their Stock Wizard tool.

But What Should I Do About My Fear?

Owning a gun won’t stop your fear. Making money by capitalizing on a stock price increase won’t stop your fear. Running from and avoiding life won’t stop your fear either.

The only way to stop fear from ruling your life is to fight it. Despite the violence we see going on around us, we can’t give in to fear. (In many ways, that is what terrorist organizations and other militant groups want.) If we do give in, it will make us hesitant, more vulnerable and jumpy. That’s not how I want to live my life.

Longtime readers of this blog know that I often share about my faith in God. In times of fear I can only on him. I take my cue from the Bible where I read verses like this one from Psalm 118:6, “The Lord is on my side. I will not fear. What can man do to me?”

When you believe this, it creates boldness to face down your fear. King David who wrote many of the Psalms knew this. He was attacked by enemies on all sides. The believers of the early church knew it as they were met by persecution from Rome. So did the Christians in the Middle East who have been executed by ISIS in the last year.

All of them faced fear of death but relied God as their source of strength. That’s where I’m at today after reading about the awful events in Dallas, TX. I’m not giving in on my lifestyle to the people who want to cause havoc across our country.

Questions for Discussion: What’s your reaction to the violence we see in society today? Have you taken extra precautions in an attempt to protect yourself? How have you seen fear alter your behavior? How can we do to facilitate a decrease in the violence and unrest?

Image courtesy of Greta Ceresini at Flickr Creative Commons

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Comments

  1. Amen! We become bold or bolder when our faith is on God and we are filled with his words, Brian.
    Jayson recently posted…7 Answers to the Most Frequently Asked Questions About Online TradingMy Profile

  2. It always comes down to the heart. Way to get to the bottom of the matter here. I think you are spot on with your assessment. It can be frustrating when the conversations center around “pro gun” vs “anti gun” or political sides when the real issue is, indeed, the innate wickedness of the human heart. Admittedly, it’s easy to get swept up in the flow of the conversation.
    Janeen recently posted…Surrogate Travel: Why We Send Papa AwayMy Profile

  3. I’m really glad you posted this. Many people don’t see the correlation between money and issues like war, violence and crime.

    When there is gun violence and fear, bad things tend to happen and people die. But Smith and Wesson does great.

    When there is a war that has been going on for decades (ie the War on Terror), hundreds of thousands of people all over the world die, including in the army and civilians. But Lockheed Martin will be sitting pretty.

    When newsworthy things happen, following the money is usually a good way to get to the real news.

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