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As Gun Debate Heats Up, So Could Opportunities in Security

17 January 2013 in Trading Ideas

President Obama’s Wednesday (January 16) speech called on Congress to toughen America’s gun laws. Central to the debate concerning the second amendment to the constitution, is a widely held belief that we live in a dangerous world. It’s this notion that led to the development of the Guns, Guards and Gates motif.

And even if access to guns is limited by virtue of upcoming laws the fact is, most Americans believe that crime is increasing. According to a recent Gallup poll on the subject, since 2001 the percentage of Americans who believe crime is worsening is increasing, while those who believe it is waning are decreasing. This represents the reversal of a more positive trend that began in 1989.

It seems the presence of the gun debate front and center in the nation’s dialog has, in and of itself, increased interest in firearms and personal security. Earlier in January, Politico reported an “unprecedented spike” in NRA membership (though Politico’s source was the NRA itself). Meanwhile shares of gun maker Sturm Ruger (RGR) have surged recently, while Smith & Wesson (SWHC) have declined since December. One possible reason is Sturm Ruger has lower exposure to what may be classified as assault rifles Barron’s reported on Wednesday.

Both gun makers are two of the 12 stocks that appear in the Guns, Guards and Gates motif, which had a 27.3% one year return.

View the Guns, Guards and Gates motif.

Performance data was as of 01/17/2013. Performance data and returns are based on past performance and are not representative of results an investor could expect to achieve. Returns of individual motifs do not take into consideration certain fees and/or commissions, corporate actions, or other activity that can affect the return an investor could expect to incur. The performance results attempt to follow a standardized and consistent methodology for performance reporting. While we believe the performance data is gathered from reliable sources, the information that generates performance results uses historical data that we believe to be accurate but has not been validated and may contain errors in pricing or other conditions. Reference to return of index does not imply its performance is comparable to a motif, but rather serves to provide a reference point. For detailed information on how we calculate returns, please visit www.motifinvesting.com.