With recent momentum, including a strong 6% move on the March 30 session, Sturm Ruger (NYSE:RGR) is firmly in positive territory for the year. Anybody with an ounce of intellectual honesty and skepticism toward the present mores of the American public could have easily predicted that Ruger stock would rise.
While we certainly love our toilet paper, it shouldn’t be shocking that many Americans have opted for for guns and ammunition instead.
Rightfully so, we’re scared of what our neighbor will do in this unprecedented crisis. For those who can get out of their mental fog, they will immediately purchase firearms to protect their families. Thus, if you want to profit from the cynical play, I wouldn’t just stop at Ruger stock. Instead, you should diversify with names like American Outdoor Brands (NASDAQ:AOBC) and Vista Outdoor (NYSE:VSTO).
Admittedly, the present environment doesn’t seem that bad. Although more than three million Americans filed for unemployment benefits last week, the economic pain hasn’t quite hit home. After all, people are still doing normal stuff like walking their dogs or driving their cars, albeit less frequently.
But what happens if we have a natural disaster, for example? That will spike gun demand again in a hurry.
With Ruger Stock, It Pays to Be Cynical
One of the developments that has absolutely broken my heart is how quickly this country has turned on Americans of Asian descent. According to an FBI intelligence report, the federal agency predicts that hate crimes against Asian American communities will surge.
That is simply outrageous on so many levels. But for me, it proves that the American Dream is quickly falling into the gutter. According to the Pew Research Center, “Asian Americans are the highest-income, best-educated and fastest-growing racial group in the United States.” Frankly, their rise to the top should be viewed as a model for success not only by other communities of color, but also the white majority.
Don’t read too much into this. All I’m saying is that hard work, dedication to duty and playing by the rules should be rewarded. But suddenly, all that goodwill disappeared because a disease originated from China.
You see how quickly societal respect for the “model minority” forged over decades of loyal perseverance can evaporate? That’s why I have an incredibly difficult time trusting the American establishment. However, I do trust Ruger stock and its underlying product portfolio.
Ironically, President Trump, who has stoked paranoia and distrust toward Asians, has given the Asian American community a lifeline. Deeming the firearms industry an “essential service,” he has opened a self-defense opportunity for all interested Americans.
According to a deeply insightful NPR.org op-ed by Kat Chow, the model minority label has been used as a wedge to sow resentment between Asians and other communities of color. Now, that label is a dangerous liability.
As horrible as it might be to admit, for cynical investors, the greater truths behind our unfortunate social reality can be lead to profits, as seen with the success of Ruger stock this year.
Society Will Only Worsen
Underlining every Asian American success story is a question borne out of frustration: What the heck does America want from us?
The establishment has told us to study hard, get good jobs, contribute to society and not resolve disputes with violence: check, check, check and check. Given the enormous contributions that this community has delivered for the U.S., their treatment at the hands of a growing number of hate-filled individuals is nothing short of shameful.
But the frightening part is that we haven’t even seen the worst of the economic damage. Personally, my biggest fear for my family and for fellow Asian Americans is if we sustain lengthy periods of 32% unemployment.
When people lose their jobs, they go crazy — you don’t need to suffer from the novel coronavirus to understand this point. Now imagine 47 million Americans losing everything, with President Trump clearly defining who the enemy is.
My bullishness for Ruger stock is based on pure logical deduction. If Americans can’t control their temper against a completely innocent party when things are relatively normal, how much more violent and irrational will they be once the floor is ripped underneath them?
Honestly, I’m not 100% sure. But I’ll guarantee you this: I’m not going to find out unarmed.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.