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mercredi 4 janvier 2017

2017 Kondratiev version by MATTHEW LYNN @ MarketWatch

Five terrible investments of 2016 that could come back in 2017


Published: Jan 4, 2017 3:07 a.m. ET

What was last shall be first — that’s the contrarian’s motto


In any market, there are always some assets that are cheap because they are — well — just rubbish.
Economies that are in deep trouble, companies that are being abandoned by their customers, and commodities for which the demand curve has shifted so far it is no longer on the graph. But sometimes the worst-performing assets in one year can come storming back the following one — because they are spectacularly undervalued.
So which of the dogs of 2016 could stage a recovery in 2017?
In fact, there are five that look ripe for a recovery. Such as? The British pound, Chinese equities, commodities such as wheat and cocoa, airlines and gold all look as if they could stage a recovery in the 12 months ahead. At the same time, Russian equities look overvalued — and so increasingly do the American markets.
To anyone who believes in contrarian investing, scouring the year-end league tables of the best and worst performing assets has always been a useful way of figuring out where to put their money to work. Some may be bargains, and some may not be — but at least you know that you are not buying at the top of the market, and that is usually a good start for any investment.
Not all of them are worth backing, of course. The Egyptian stock market had a terrible 2016, down 27%. And guess what? Plagued by political turmoil, with a barely functioning economy, and beset by military challenges, it is likely to have a terrible 2017 as well. Likewise, the Italian market is not about to recover — that won’t happen until it leaves the euro.
But here are five assets that could turn around in the year ahead, and potentially dramatically so.
Firstly, the British pound GBPUSD, +0.6783%  , the worst-performing major currency of 2016. Everyone is worried about what will happen once the U.K. triggers the process of leaving the European Union, and the potential impact on its economy.
But so far Britain has surprised everyone on the upside, with surging retail sales, and decent growth. In a world of generally low tariffs, we are about to discover that Brussels does not make much difference to a major economy such as the U.K. one way or the other. With the euro EURUSD, +0.8169%  in turmoil, facing a slow-motion banking crisis in Italy, and populist political revolts in France and the Netherlands, sterling should make a solid recovery in the year ahead.
Next, gold GCG7, +0.23%   , which had a flat 2016 and which is still near the bottom of a five-year bear market. Lots of people thought that printing money and near-zero interest rates would be great for gold. But paradoxically quantitative easing created deflation, not inflation.
From this year, however, governments look set on fiscal expansion, and central banks are steadily winding down QE. The result? The price of gold may finally start to move upward again. Add in some trade wars launched by the new president of the United States, and gold could start to rocket upward once again.
Thirdly, Shanghai. China’s benchmark equities index SHCOMP, +0.73%  was the fifth worst performer in the world in 2016, down there with Egyptian and Nigerian markets. True, there is plenty to be worried about in China, from a slowdown in growth to an overheated financial system to the threat of tariffs from the United States. Any of those could trigger a collapse.
That said, every developing economy faces bumps on the road. China is by a wide margin the fastest growing major economy in the world, and can still triple its output before it catches up with the U.S., Europe, or Japan. Only a fraction of that is captured in the stock market. If everyone calms down, it could start to soar again.
Fourthly, take a look wheat WH7, +2.77%  and cocoa CCH7, +2.86%  . Strong harvests have meant that major agricultural commodities have had their worst performance in a decade. Cocoa is down by more than 30% and wheat by 13%. But food prices are always cyclical. Weather patterns change, and so do trade flows, and the costs of transportation. After all, it is not as if people aren’t eating chocolate cake anymore.
In most markets, there is a reversion to the mean if you simply wait for a while — and this could well be the year when those two commodities get back on track.
Finally, airlines JETS, +1.65% On Britain’s FTSE-100 index, the budget airline easyJetEZJ, +1.97%  and International Consolidated Airlines Group IAG, +0.90%  , which owns both British Airways and Iberia, were both in the bottom 10 performers last year. Rising oil prices and Brexit hit both hard. But leaving the EU won’t make the U.K. any less of a travel hub — in fact, with sterling so much cheaper lots of people will finally get around to visiting London.
Meanwhile, the rapid fall in the cost of solar energy will eventually push the oil price back down. The airline industry can rebound sharply from very low ebb.
At the same time, some of the best-performing assets of 2016 look way overpriced.
Such as? The star government bonds in the world last year were Venezuelan. In the unlikely event that you own any, then get out while you can.
The Russian stock market was up by 50% over 2016, thanks largely to the recovery in the oil price. But Russia remains what it has been for the last decade: an unreformed, statist oligarchy, led by an aggressive autocrat, with zero interest in opening up the economy, and that means it is heading for another crash sooner or later.
The American equities markets DJIA, +0.30%  saw a big, and surprising, jump on Trump’s election, but as reality starts to bite, and interest rates go up, will struggle to maintain that momentum.
Many of the worst assets of 2016 will be just as dismal in the next 12 months. They were cheap for a reason. But a few will stage strong recoveries — and those five assets are the ones to watch most closely.
Source :  http://www.marketwatch.com/story/five-terrible-investments-of-2016-that-could-come-back-in-2017-2017-01-04










jeudi 30 avril 2015

By Jeff Reeves @ MarketWatch

Opinion: 5 cheap stocks that aren’t value investing traps

Published: Apr 17, 2015 6:01 a.m. ET

While sentiment matters and headlines can change, there are few substitutes for good analysis that compares investment options objectively based on numbers and not narrative.
Lately, I’ve been looking for stocks that offer good value in a market that appears increasingly stretched. And I’ve found five stocks that look cheap — but unlike some of the dogs that have crashed thanks to failure, these picks are decidedly not value traps and have a lot to offer.
Each of these stocks trades at a lower earnings multiple than the market at large — which would be a forward P/E of 17.5 for the S&P 500 SPX, -1.24%  and 19.2 for the Nasdaq COMP, -1.84% These stocks also can be had at an attractive price/sales ratio, at least compared with the 1.8 reading for the S&P.

On top of that, I looked for stability in the form of plenty of cash on the books and a sustainable dividend as a hedge when the market is rocky. The result is a list of five surprising value stocks that look like bargains. Here they are, with the numbers to show my work:
1. Valero Energy
·       Market Cap: $29.6 billion
·       Cash and Investments: $3.7 billion million or, or 13% of market value
·       Price/sales: 0.42 based on a projected $71.2 billion in FY2015 sales
·       P/E ratio: 8.7 based on projected EPS of $6.60 in FY2015
·       Dividend Yield: 2.8%
It seems crazy to chase an energy stock in this environment. But while Valero Energy Corporation VLO, -2.56%   has underperformed in the last year or so, the stock has really been in a groove since its January lows, gaining close to 30% in just three months.
That’s because, in the words of Ben Levisohn at Barron’s, Valero “knows how to take lemons and make lemonade” and posted robust fourth-quarter earnings on strong product margins. Given this recent earnings success and extremely attractive valuation metrics, Valero could be worth a look before its first-quarter numbers hit at the end of the month.
2. Lexmark International Inc.
·       Market Cap: $2.7 billion
·       Cash and Investments: $934 million or, or 35% of market value
·       Price/sales: 0.75 based on a projected $3.6 billion in FY2015 sales
·       P/E ratio: 12.1 based on projected EPS of $3.61 in FY2015
·       Dividend Yield: 3.3%
Lexmark International Inc. LXK, -1.38%   is hardly a sexy name, and is most recognizable to investors from its laser printers. Admittedly, Lexmark stock has seen stagnant revenue in recent years, but profits are quite strong and the company is sitting on a nice pile of cash, with good operating cash flow.
You may be surprised to see that the stock is actually up almost 6% this year, and is up 90% since January 2013 vs. just 50% or so for the S&P 500 in the same period. Take this recent strength with a 3.3% dividend and you’ve got reasons to look at Lexmark. That dividend of 36 cents per share quarterly is sustainable at less than 40% of this year’s projected earnings, and should provide stability no matter what happens in 2015.
3. Cooper Tire & Rubber Co.
·       Market Cap: $2.4 billion
·       Cash and Investments: $552 million or, or 23% of market value
·       Price/sales: 0.79 based on a projected $3.1 billion in FY2015 sales
·       P/E ratio: 13.7 based on projected EPS of $3.06 in FY2015
·       Dividend Yield: 0.1%
You’re not going to get much income from Cooper Tire & Rubber Co. CTB, -1.98%   since the stock pays only a nominal dividend of 10.5 cents quarterly.  However, the company’s stock is attractive on a number of other valuation metrics and has a solid balance sheet. And the fact that vehicle sales are expected to be quite strong in 2015, hitting 17 million and marking the highest level since 2005 according to some estimates, bodes well for Cooper.
You can’t argue with the tape — Cooper stock is up 21% year-to-date in 2015 against a flat market, and the charts continue to look bullish as Cooper approaches its May earnings report.
4. R.R. Donnelley & Sons  
·       Market Cap: $4.0 billion
·       Cash and Investments: $528 million or, or 13% of market value
·       Price/sales: 0.34 based on a projected $11.8 billion in FY2015 sales
·       P/E ratio: 12.8 based on projected EPS of $1.57 in FY2015
·       Dividend Yield: 5.2%
R.R. Donnelley & Sons RRD, -2.72%   is a communications and public relations firm that has been charging higher in the last few years. Since January 2013, shares are up 126% vs. 50% or so for the S&P 500, and shares have tacked on 20% year-to-date.
Still, the valuation metrics are great despite this run, with low multiples on both sales and earnings. Furthermore, the juicy 26-cent dividend each quarter adds up to a hefty 5.2% yield. Though the payout is a majority of total earnings — at a 66% payout ratio — the company can comfortably sustain that dividend, especially considering it has more than $500 million on hand in cash and investments.
5. Emcor Group
·       Market Cap: $3.0 billion
·       Cash and Investments: $432 million or, or 14% of market value
·       Price/sales: 0.45 based on a projected $6.6 billion in FY2015 sales
·       P/E ratio: 16.8 based on projected EPS of $2.81 in FY2015
·       Dividend Yield: 0.7%
Electrical and mechanical construction company Emcor Group EME, -3.69%   is focused on nuts-and-bolts building and industrial services. But given the continued improvement in the U.S. economy, Emcor has been doing quite well lately with shares up 6% so far this year, outperforming the S&P 500 three-fold even after a mild earnings miss in its fourth-quarter report.
Emcor reports earnings next at the end of April. Though revenue has been relatively flat lately, the company has seen earnings growth in four of the last five quarters on a year-over-year basis. If Emcor can prove the miss in January was an outlier, it should power higher — and given the stock’s uptrend recently, Wall Street seems to think that’s a highly likely scenario.




jeudi 7 août 2014

Russia, Crimea, Ukraine, Israel, Iraq, Syria, Africa, ... ? an other world ...




Market expert thinks bull is just getting warmed up 
Analysis: Technical analyst Craig Johnson thinks stocks could rise for years, reports Howard Gold.



Howard Gold


Aug. 7, 2014, 10:00 a.m. EDT


This market expert sees big upside for stocks

Insight: Bull market is just beginning, says Johnson

By Howard Gold, MarketWatch
This article has been republished to correct the headline. An earlier version incorrectly said that Johnson was predicting a 70% gain for stocks.

Shutterstock.com
I couldn’t have picked a worse day to interview Craig Johnson, longtime bullish technical analyst for Piper Jaffray.
It was last Thursday, when the Dow Jones Industrial Average lost 317 points, and fears about Ukraine, Gaza, and Argentina’s default on its debt were paramount.
When we spoke late that afternoon, Johnson sounded a bit harried but otherwise unfazed. Just two days before, his team had published a new report, “2K and Beyond/ All Systems Go.”  And on Thursday he wasn’t giving any ground.

Where to put your money when markets are in turmoil

How do investors find value in the market amid global turmoil? Anastasia Amoroso, J.P. Morgan Funds global market strategist, joins MoneyBeat to discuss.
True, the S&P 500 SPX -0.25%  had just broken below its 50-day moving average, signifying short-term weakness. (It has since gone even lower.) But that already happened twice this year, in February and May, and stocks kept moving higher, Johnson said.
“These sell-offs burn themselves out,” he added.
So, until there’s a deeper correction that drives the S&P below longer-term support levels around 1850, Johnson is giving this market the benefit of the doubt.
“The secular bull market is just starting,” he declared.
And not just any secular bull market, he said, but “a big, long, powerful secular bull market” that could last “multiple years in length and [earn] a multiple of your money.”

Raging bull

If you’re ready to throw rotten tomatoes at your computer screen, you’re not alone. Two years ago, Johnson  was in a small, besieged bullish fraternity along with Laszlo Birinyi,Jim Stack, James Paulsen of Wells Capital Management, and fellow technician Mark Arbeter, then of S&P.
Clients called him crazy, and when this column first wrote about Johnson’s 2000 S&P call, the comments were downright contemptuous.
And yet, here we are two years later, and the S&P peaked at 1987.98 in mid-July. Johnson predicted the index would end 2013 at 1850. It closed at 1848.36.
Johnson may well have been lucky, but it was an astonishing call by any measure. The few investors who listened to him rather than to the gold bugs, hyperinflationists anddoom-and-gloomers of every stripe have made a boatload of money. The S&P is up more than 40% since then.
But Johnson’s not done. One reason he thinks the market is heading a lot higher for a lot longer is that pessimism is still pervasive.

S&P 500 INDEX 

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 “People are scared. They still hate this market. They think it’s all manipulated by the Fed,” he said.
Trading volume is still weak, he said, and “it doesn’t feel like there’s a lot of individual investors participating today.”
That’s actually true: The small number of hyperactive traders at discount brokerage firms obscure the bigger picture that the vast majority of individuals are still too spooked to buy stocks. Study after study confirms that. Institutions aren’t exactly euphoric, either.

If Johnson is right, stocks will rally for a long time. He thinks we’re in the kind of secular (extreme long-term) bull market we saw in both the 1950s and the 1980s. Each of those runs lasted much longer than a decade.
“The secular bull market began in March of 2009 and was finally confirmed when we went through the 2000 and 2007 highs,” Johnson explained.
That “confirmation” occurred in March 2013, when the S&P 500 broke above 1550, its previous all-time peak.
“When you break out of big bases, the market accelerates,” he explained, and indeed, the S&P has gained as much as 28% since hitting that magic number.
Comparing that with 1952 and 1982, when the market also surpassed its previous high (in price only, not including dividends), Johnson said, “If history does rhyme, [this bull market] would last 10 years from 2013.”
“Investors made five times their money” after 1952 and 15 times their money from 1982 to 2000, he said.

Stocks for the long run

So, if you take March 2009 as your starting point and multiply by five, that would get us to S&P 3400 before it’s all over — about 70% higher than current levels. Yet over a decade, that’s a compound annual growth rate of less than 6% a year, which is not outlandish. (That’s just hypothetical, by the way: Johnson hasn’t published any official forecast beyond 2100 by the end of 2014. I’m not predicting that, either.)
But the continuation of the bull market, of course, depends on the economy and earnings.  “Things are definitely getting better with the economy,” Johnson said. He thinks rising interest rates in years to come could actually facilitate a switch into stocks from bonds.
And since the price/earnings multiple of the S&P already has expanded, “we need earnings to come through.” So far this quarter, almost 70% of S&P companies that have reported earnings have beaten Wall Street estimates.
Still, Johnson conceded, “we’re overdue for a true correction. I would have thought it would have happened by now.” (So would I, and last week, I recommended that readerstrim some of their positions to reduce short-term risk.)
Johnson’s definitely not advising people to dump stocks. In fact, he thinks a selloff is a buying opportunity. 
He says investing in big-blue chip U.S. stocks is the way to go for most people. “Why not be a buy-and-hold investor?” he asked.
Why not indeed? If he’s right and this bull market has years to go, it would be a great boon for retiring baby boomers and others who were smart enough to keep at least some — but certainly not all — of their money in stocks, while everyone else was busy fighting the Fed.
Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing , which offers simple, low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold.
More from MarketWatch:


mercredi 21 mai 2014

Guns, Cars, Wars, ... self-destruction







Defining Self-Destructive Behavior

Self-defeating behavior is the idea that sometimes people knowingly do things that will cause them to fail or bring them trouble. It is defined as “any deliberate or intentional behavior that has clear, definitely or probably negative effects on the self or on the self’s projects” (Scher & Baumeister 1988). Many theories as to why humans sometimes behave in a self destructive ways have been examined by many psychologists. One proposed theory that answers this question is the Freudian argument, which states that “people have an innate death drive that impels them to pursue their own downfall and death”. This argument also concludes that people do harm themselves deliberately, even though they sometimes are not conscious of this. “Self defeating behaviors are especially common when people feel that others view them less favorably than the people desire”


May 20, 2014, 10:38 a.m. EDT

10 things the gun industry won’t tell you


By Catey Hill, MarketWatch



Doris Tamai / Shutterstock.com
1. “Owning our product may be hazardous to your health.”
In the U.S., there are now somewhere between 270 million and 310 million guns, according to the Pew Research Center — that’s almost one gun for every person in the nation. Judges and legislators across the political spectrum recognize the constitutional right to bear arms. And gun and ammunition sales to private citizens are a significant part of a nearly $15 billion industry that’s seeing plenty of growth: On Tuesday, for example, Smith & Wesson SWHC +0.66%  reported that its fiscal third-quarter profit rose to $20.8 million, up from $14.6 million a year ago .
SMITH & WESSON HOLDING CORPORATION COM USD0.001 (SWHC)

15,18 USD 
+0,66% | +0,10
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What makes the gun industry so controversial, of course, is the ever-shifting debate about how to reconcile gun rights and public safety. Each year in this country, more than 31,000 people are killed by firearms, the Centers for Disease Control and Preventionestimate — roughly 85 people per day. The U.S. has one of the highest rates of civilian gun ownership and one of the highest rates of firearm-related deaths per capita across developed countries around the world.
What’s more, a growing body of research suggests that simply owning a gun is correlated with an increased likelihood that you’ll be a victim of violence. A study published this January in the Annals of Internal Medicine found that people who live in homes with firearms are over three times as likely to die from suicide and two times as likely to be a victim of homicide as those who don’t have access to firearms. The study analyzed the results of 16 other studies and found that in all but one, access to guns was linked to a higher probability of murder or suicide. In another study published in the journal Aggression and Violent Behavior, two Harvard researchers conducted a review of 26 studies on gun availability and homicide in multiple countries and found that most of them “are consistent with the hypothesis that higher levels of gun prevalence substantially increase the homicide rate.”
To be sure, the kinds of correlations shown in big social studies aren’t the same thing as a proven cause-and-effect relationship. Many in the gun industry — including some gun and ammunition manufacturers and organizations of gun owners like the National Rifle Association, “the premier firearms education organization in the world” — disagree sharply with conclusions like these. And Andrew Arulanandam, a spokesperson for the National Rifle Association, points to a different correlation: While gun ownership is now at an all-time high, the murder rate (in total, not just from firearms) is near an all-time low.
Still, many gun owners say that having a gun in the house makes them feel safe and empowered to confront threats. That sentiment was summed up by NRA executive vice president and CEO Wayne LaPierre, who said in an interview following the Newtown, Conn., elementary school shooting in December 2012 that “the only thing that stops a bad guy with a gun is a good guy with a gun.”

2. “Fear is good for our bottom line.”
From 2008 to 2013, the gun and ammo manufacturing industry had one of the stronger periods in its history, with revenue growing at an annual rate of roughly 8.4% to an estimated $14.7 billion in 2013, according to a report on the industry by research firm IBISWorld. The report’s authors concluded that gains for the industry were driven in part by anxiety among its customers. “Fear of a potential rise in crime contributed to unprecedented industry growth,” the report stated. (In fact, nationwide, both property and violent crime rates fell over this period, according to FBI data.)

Under pressure, Facebook restricts gun promotion

Facebook announced new restrictions on promoting guns on the social network, amid pressure from groups favoring gun control. Jeff Elder reports on digits. Photo: Getty Images.
The impact of fear on gun sales was clear in the aftermath of the terrorist attacks on Sept. 11, 2001. The number of criminal background checks for firearm purchases — considered a good proxy for gun sales — jumped 22% in September of 2001 over the previous month’s levels, and another 19% that October.
Fear of crime isn’t the only anxiety that drives sales: When gun owners believe that the government will pass new regulations limiting their access to firearms, many, not surprisingly, go out and stock up. Some analysts believe that was the case in the latter half of 2012, when two large mass shootings by lone gunmen — one in Aurora, Colo., in which 12 movie-theater patrons were killed; another in Newtown, Conn., that killed 20 children and six school employees — led more public figures to call for gun restrictions. From August to December of that year, Federal Bureau of Investigation background checks climbed a total of 82%, to 2.78 million in December, an all-time record and a 49% increase over December 2011, according to FBI data.
Those numbers seem to have translated into improved sales as well: Smith & Wesson reported that net sales for the year ended April 30, 2013, climbed 43% from the previous year, hitting a record $588 million, with fourth-quarter sales up 38% compared with a year earlier. And gun maker Sturm Ruger & Co. RGR -3.23%  saw net sales in 2012 hit $491.8 million, up from $328.8 in 2011. Indeed, gun sales sometimes jump after events like mass shootings, and they jumped after the recent elections, says Robert J. Spitzer, a professor of political science at the State University of New York-Cortland and the author of four books on gun policy. “Some people are afraid their access to guns will be restricted, so they buy;” others “buy them as a political statement to voice their disagreement with people who want to regulate guns.”

STURM RUGER & CO INC COM USD1 (RGR)
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The NRA’s Arulanandam says that mass shootings do not cause gun sales to rise, and that it’s politicians, not the gun industry, that exploit these kinds of tragedies for their own gain. Gun manufacturers and gun advocates also generally say that it would be inappropriate for them to exploit events like mass shootings to boost sales. They have seized on such events to advocate safety improvements that would incorporate guns. For example, the NRA says it backed a “school shield” proposal in the wake of the Newtown shooting, which it says is intended to improve school safety by offering training to armed guards in schools, among other safety proposals.
3. “Guns get special treatment under the law.”
In some ways, Congress treats firearms differently — and some say more leniently — than other mass-produced products. For starters, the Consumer Product Safety Commission — a government agency that protects consumers from “unreasonable risks of injury or death” associated with consumer products — does not have the authority to regulate guns, thanks to a 1976 amendment to the Consumer Product Safety Act. Experts think the amendment makes it significantly harder to get a gun recalled from the market. “They can ban or recall even things like lawn darts, but have no authority over guns,” says John Culhane, a professor of law and the director of the Health Law Institute at Widener University School of Law The NRA’s Arulanandam points out that while guns aren’t regulated by the Consumer Product Safety Commission, they are regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On a few occasions in the late 20th century, cities and victims of shootings pursued a different legal strategy against gun manufacturers, arguing that gun makers should be liable for damages because they made it easy for criminals to obtain their products. Suits like that, Culhane explains, inspired the 2005 Protection of Lawful Commerce in Arms Act, which shields gun manufacturers from many negligence and product-liability lawsuits, he says. This means that many victims of a criminal shooting will find it difficult if not impossible to sue gun manufacturers under those theories and win. The NRA Institute for Legislative Action, the NRA’s lobbying arm, wrote in a 2010 article that “this legislation is a vitally important first step toward ending the anti-gun lobby’s shameless attempts to bankrupt the American firearms industry through reckless lawsuits.”
The gun industry says it endures plenty of regulation. “Firearms are highly regulated by a series of federal laws,” writes Michael Bazinet, a spokesperson for the National Shooting Sports Foundation. “In addition, many states and even some cities have enacted their own statutes and ordinances governing firearm characteristics, ownership and sales.”
4. “We want your kids to play with guns.”
Under most circumstances, people under 18 can’t legally buy guns. But many hunters and target shooters first learned to shoot (and shoot safely) during childhood, and both gun advocacy groups and gun manufacturers craft their messages with young people in mind.
On the product side, Keystone Sporting Arms’ Crickett rifle is marketed as “my first rifle,” using a cartoon cricket as its logo; on its website, the company says its goal is to “instill gun safety in the minds of youth shooters.” Other manufacturers use cartoon imagery that may make it particularly appealing to children (think Joe Camel, but for guns). For example, ammunition manufacturer Hornady makes the Zombie Max bullet (marketing materials read: “supply yourself for the Zombie Apocalypse”), which has cartoon zombies on the box. Hornady did not respond to a request for comment. Crickett’s attorney John Renzulli says that Crickett’s guns are not marketed to children; they are marketed to the parents, who “make the decision based upon the maturity level of their children whether or not to buy the rifle so the child can participate in the shooting sports.”
The NRA offers shooting camps for kids that teach them how to shoot a rifle, shotgun and pistol; the organization says on its website that these camps are designed to “provide a high-quality training opportunity” with “top-level coaches.” (One of its magazines, NRA Family InSights, features a special section for kids.) And gun manufacturers advertise in “Junior Shooters,” a magazine about shooting for children and teens.
That’s all perfectly legal, says Culhane, who notes that while cigarette manufacturers aren’t allowed to directly market to children, gun manufacturers are. But gun-control advocates argue that guns are just as dangerous to young people as cigarettes are. Firearm-related injuries send an average of 20 children and adolescents to the hospital per day, according to a study published in the journal Pediatrics this year. Incidents of children injuring themselves or others with guns underscore statistics like these: Last year, for example, a Kentucky boy accidentally shot and killed his two-year-old sister with a Crickett rifle.
Guns aren’t sold to kids, it’s true. Under federal law, you have to be at least 18 to buy a rifle or shotgun from a licensed dealer, and you must be 21 to buy any other type of gun. However, it’s easy to get around these restrictions, as it’s legal for an adult to buy shotguns and rifles and let a child use them; and while it is illegal for a child under 18 to possess a handgun, this law can sometimes be skirted with written permission from a parent or guardian.
5. “Gun control may work. We still think it’s a bad idea.
For a study released in 2013, researchers at Boston Children’s Hospital, Harvard Medical School and Harvard School of Public Health compared firearm death rates for suicide and homicide with gun-control laws in each state. The states with the strictest legal codes had statutes designed to strengthen background checks, curb firearm trafficking, ban assault weapons, prevent consumers from having guns in some public places or ensure child safety.
The study’s conclusion: States with the largest number of gun-control laws on the books had gun-death rates that were significantly lower than those in states with the fewest such laws. For example, Massachusetts and New Jersey, which have relatively strict gun-control laws, had an average of only 3.4 and 4.9 firearm-related deaths per 100,000 people, respectively, each year from 2007 to 2010, while Alaska and Louisiana, which have some of the loosest laws, had 17.5 and 18 per 100,000 people, respectively, the study revealed.
Here, too, as the authors admit, cause and effect are in question — do stricter laws reduce violence, or do less-violent places tend to enact stricter laws? A study published in the Harvard Journal of Public Law and Policy which compared international gun laws and ownership found that on the global level, stricter gun laws don’t mean less crime: “For example, Luxembourg, where handguns are totally banned and ownership of any kind of gun is minimal, had a murder rate nine times higher than Germany in 2002,” the study authors write.
But experts say lawmakers shouldn’t ignore studies showing the correlation between gun control and reduced firearm deaths. “Gun control is not a panacea, but some aspects of it do work,” says Spitzer. His research on the effects of laws in New York state, for example, concluded that 80% to 90% of the guns used in crimes came from other states, which he believes is because of New York’s strict gun laws. Considering that data, he says, it stands to reason that having these kinds of laws in all states might decrease firearm-related crimes across the board.
The gun industry opposes many forms of gun control, casting some regulations as violations of constitutional rights and arguing that restrictions could put law-abiding citizens’ lives at risk. Indeed, the NRA opposes the Manchin-Toomey bill promising universal background checks; some nine in 10 Americans want universal background checks. The NRA’s Arulanandam says that our government should focus on enforcing the current gun laws before it starts trying to make new ones and points out that we need a better database of those who are mentally ill, so that they get flagged in the FBI’s National Instant Criminal Background Check System database, or NICS, when trying to buy a gun. “Any database is only as good as the info contained within it,” he says. Furthermore, the NRA Institute for Legislative Action has said that expanding background checks might not reduce crime.

6. “Politically, we’re practically unbeatable.”
The Constitution protects the right to bear arms. But the Constitution isn’t the only thing helping them win political battles: Guns groups spend millions on lobbying each year to protect their interests. The National Rifle Association and its subsidiary, the NRA Institute for Legislative Action, together spent more than $3.4 million on federal lobbying efforts in 2013, up 14% from the year prior, according to the Center for Responsive Politics, a nonprofit research group that tracks money in U.S. politics. The National Association of Gun Rights, a gun-rights organization that educates gun owners about state and federal legislation that affects gun rights, spent nearly $6.8 million last year, and the National Shooting Sports Foundation, a trade association of firearms manufacturers, spent more than $2.3 million.
Groups like these also give plenty to aid individual members of the Senate and House. For example, during the 2011-12 election cycle, the NRA spent roughly $19 million to defeat or get certain candidates elected — about $13 million against Democrats (and about $42,000 for them) and $6 million for Republicans (and about $221,000 against them).
The gun industry is far from the biggest spender on lobbying; industries like pharmaceuticals and insurance spend more, according to the Center for Responsive Politics. But combined with gun-rights organizations’ ability to reach and mobilize voters who oppose gun restrictions, their spending makes them a formidable political force.
Recent events underscore the industry’s clout. After the Newtown massacre, polls suggested that most Americans supported universal background checks for gun buyers. But the NRA’s LaPierre said: “It’s aimed at registering your guns,” he said in a statement. “When another tragic ‘opportunity’ presents itself, that registry will be used to confiscate your guns.”
In the end, Congress wasn’t able to agree on any gun-control compromise. “It’s a testament to the NRA’s power, its political pull,” says Josh Sugarmann, the executive director of the Violence Policy Center, a gun-safety advocacy group. A few states did tighten their laws, but some have already faced political blowback. In a recall election in Colorado last year, voters unseated state senators John Morse and Angela Giron, both of whom were supporters of strict new gun laws; the NRA, via the Committee to Restore Coloradans’ Rights, spent roughly $360,000 from March 1 through Aug. 29, according to campaign filings. The NRA’s Arulanandam says it wasn’t the money that led to their win — gun-control proponents outspent the NRA, he says. Instead, he says, it was because the NRA “has the support of the people.” And, of course, the gun industry does sometimes lose battles: California recently passed a law requiring gun manufacturers to add microstamping technology to some guns, which would stamp the bullets when the gun is fired so they can be traced to the gun.

7. “Under ‘Gun Ban Obama,’ we’re doing just fine.”
In the wake of the Newtown tragedy, President Obama announced his plan to try to curb gun violence with measures such as strengthening background checks. None of those measures made it through Congress. Indeed, despite often landing on the opposite side of the policy fence, the gun industry hasn’t suffered all that much under the Obama administration.
Obama’s election in 2008 seems to have helped send gun sales through the roof. Part of this is due to Defense Department spending, but civilian gun sales also spiked, “because of concerns about potential law changes by the Obama administration,” IBISWorld reports. Obama has even signed laws that expanded firearm rights. For example, in 2009, he signed bills allowing Americans to carry loaded weapons into national parks and to carry firearms in their checked baggage on Amtrak trains. The NRA’s Arulanandam says that the reason Obama hasn’t been successful in getting gun-control measures passed is that he is trying to sell a premise that “defies common sense.” “People want to be able to keep themselves and their families safe,” he says.

8. “Sometimes we aren’t ‘pro-gun’ enough.”
Pro-regulation legislators aren’t the only parties who can face pressure from gun-rights supporters: Sometimes, the gun industry itself feels the sting. In the 1990s, for example, gun-control supporters, in conjunction with the Clinton administration and some city mayors, launched a series of lawsuits against the gun industry. In 2000, gun manufacturer Smith & Wesson decided to settle some of those claims and made an agreement with the government to submit to more regulation. The result: Some members of the gun industry encouraged consumers to boycott Smith & Wesson. The company’s sales plummeted, and the gun manufacturer ended up distancing itself from the previous settlement.
Boycotts have been effective for the gun-rights lobby more recently, too. Last year, a number of members of the gun industry boycotted the weeklong Eastern Sports and Outdoor Show, in part because it decided to ban modern sporting rifles (these are AR-15-style semi-automatic guns) from the show; the show wound up being cancelled that year. The NRA’s Arulanandam says that this is an “example of the whole outdoor community banding together and standing up for the rights of law-abiding citizens.”

9. “We sell guns to people you might not want us to.”
Federally licensed gun dealers are required to run their customers through the FBI’s criminal background check system before a sale: That system will catch people who have a criminal record or, in some cases, a history of mental-health problems. But there is no law that prohibits businesses from selling guns to individuals on the so-called terrorism watch list, which contains an estimated 875,000 names of people the government thinks might be terrorists, including suspected members of al Qaeda and other terrorist organizations. “Even if they are deemed too dangerous to fly on planes, suspected terrorists can buy guns,” says attorney Jonathan Lowy, the director of the Legal Action Project for the Brady Center to Prevent Gun Violence.
And, indeed, these suspects do buy guns: Data from the Government Accountability Office showed that between February 2004 and February 2010, people on the terrorism watch list tried to buy guns and explosives more than 1,200 times and were successful 91% of the time. (The number could be even higher, because buying a gun from a private seller or at a gun show doesn’t require a background check.)
While all federally licensed firearms dealers have to check all people trying to buy guns through the FBI’s National Instant Criminal Background Check System database — and that database does check gun buyers against the terrorism watch list — the gun dealer never sees any alert that the person is a suspected terrorist (though the government is alerted that this person is trying to buy a gun). Sometimes those on the terrorism watch list are allowed by the government to buy guns, for reasons that the government has kept confidential.
Some experts note that just because someone is on the terrorism list doesn’t mean he is a terrorist: Indeed, this is only a list of “suspected” terrorists, and sometimes the government gets it wrong, in that the person is not a terrorist at all or the government has the person mistaken for someone else. Some gun-rights advocates have used those facts as an argument against legislation that would bar people on the watch list from purchasing firearms.


May 20, 2014, 12:03 p.m. EDT

Paranoia has its limits as gun sales slump

Opinion: Enthusiasts are saying with their wallets that gun laws won’t change


By Steve Goldstein, MarketWatch


Bloomberg
Guns sit on display at a Dick's Sporting Goods Inc. store in Paramus, N.J.


WASHINGTON (MarketWatch) — Dick’s Sporting Goods issued a profit warning Tuesday, and the biggest concern from management is over golf equipment. But that’s not the only reason the sporting-goods retailer is struggling.
The firm DKS +0.37%  also warned over its hunting division, and on a conference call, management made it clear what’s going on.
Here’s what COO Joe Schmidt told investors: “We had anticipated this category to be below last year as did others in the space but we underestimated the decline. We all knew the significant increase in sales during the past couple of years was temporary and driven by concern for both legislative action that would broadly change our gun laws.”
Put another way: paranoia has its limits as a driver of gun sales. Background checks — a proxy for sales — jumped 19% in 2012 and rose another 8% in 2013, according to the FBI’s National Instant Criminal, Background Check System.
But there’s a different story in 2014. Background checks plummeted by a third in January — and even as some of that decline was weather related, there hasn’t been a catch-up since then. Background checks were up just 1% from February to April. Taken together, background checks are down 9% this year.
No wonder, then, that Cabela’s CAB -5.04%  — another retailer of guns — saw its shares slump by around 5%. Of the publicly traded gun makers, Sturm, Ruger RGR -3.23%  also was lower, though interestingly, Smith & Wesson SWHC +0.66%  was up, helped by a brokerage upgrade due to market-share gains.
President Barack Obama famously said on the campaign trail that people in small towns cling to either guns or religion. Under his administration, the right to cling is untainted, his efforts for fairly mild legislative action are dead in Congress, and there’s little interest from his administration in taking executive action.
The Newtown, Conn., school shooting in 2012 shocked a nation but did not lead to a consensus on what to do about it. And by now even the most concerned of gun enthusiasts has concluded there’s nothing to fear.