Over the past decade, patient investors benefited greatly from one of the longest economic expansions in U.S. history, using stocks, gold and even cryptocurrency as vehicles of profit. A few of them even used machine guns.
Yes, machine guns. Not the readily available, semi-automatic rifles that have figured so tragically in recent mass shootings, igniting a national furor over gun laws. We’re talking about actual machine guns, which are about as far from the local gun store inventory as you can get, and much more difficult to buy. A machine gun typically shoots about 600 to 800 rounds a minute, while the Bushmaster AR-15 will fire about 45 rounds a minute, depending on how fast you pull the trigger. Fully automatic firearms are often depicted in movies, but in real life they’re a rare commodity except to members of the military.
Some of the hoops a buyer must navigate to get one mirror what some proponents of tougher gun laws would like for all firearms. But the red tape has also helped make machine guns the ultimate collector’s item, with some having doubled in value over the past 10 years.
Frank Goepfert is one of the biggest machine gun merchants in America. From a 100-plus-acre ranch he shares with his wife, son and German shorthair puppy in rural Jasper, Missouri, he runs a small empire of automatic weapons. Inside a tornado-proof vault, dozens of automatic firearms worth millions of dollars hang on the walls. There are Tommy guns, M2 Brownings, Uzis, a Sterling submachine gun and AK-47 assault rifles, the most popular machine gun in the world.
Goepfert, 47, who regularly sports a leather jacket and a black Stetson, says his company, Midwest Tactical Inc., sold as many as 500 machine guns in 2017, averaging thousands of dollars each. He’s made enough money to purchase two planes and even a tank.
His best customer, a technology company executive, spent $1.6 million on guns last year, while an oil and farming tycoon dropped $1.2 million, he says. By Goepfert’s tally, he has 20 clients who each have spent more than $200,000 on his wares. He declined to identify them, citing privacy considerations. And while the government keeps a record of automatic weapons, it’s not public. That may make Goepfert one of the best sources of information outside the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives when it comes to who has a machine gun in America.
There are “a fixed amount” of such weapons, says ATF Special Agent Joshua Jackson. “Demand has caused the value of these firearms to increase.”
In 1986, President Ronald Reagan signed an act effectively banning civilians from purchasing new machine guns. Suddenly, most of those already out there became a lot more valuable (Goepfert says there were 250,000 at the time). Today, the exact number left isn’t known, though one industry expert put it at 182,000.
Some of Midwest Tactical’s best-selling models have climbed in value by tens of thousands of dollars since Goepfert and his wife Joy, 45, started the company. According to data collected by the Machine Gun Price Guide, which uses information from dealers, auctions and gun shows, the cost of a Tommy gun (the Thompson M1) went from about $9,000 in 2004 to almost $27,000 last July—a 200 percent increase. The Heckler & Koch MP5 soared 250 percent, from almost $12,000 in 2003 to $42,000. Meanwhile, the MAC10, technically a “machine pistol,” more than doubled in price from 2011 to 2017, to more than $8,000.
Many machine guns held by civilians are war relics brought home by GIs, going back to World War II. Goepfert says he once heard of a wealthy widow who—hating her late husband’s collection—let the ATF destroy it. Such firearms need regular attention or they will disintegrate, and Goepfert counts on sellers who don’t want the hassle. The delicate nature of machine guns also helps increase their value. The more guns fall apart, the more valuable those that remain become.
When Goepfert switches from purchaser to salesman, his job falls somewhere between gun dealer, money manager and antiquities expert.
“We work with a lot of buyers that, you know—they’ll tell us what they’re wanting to collect or invest in and then we go out and try to actually locate a good quality item for them,” he says. “So we work with them and kind of coach them a lot of times.” In addition to making sure the desired firearm is in stock, Goepfert says will pull its price history so a buyer has an idea of what kind of return they will see.
In the past, the machine gun industry saw upticks in sales when the stock market experienced a downturn. “I’ve actually had people pull out of the stock market or real estate when that was going on, and they’ll say, ‘I want to put my money in something different, something a little bit safer,’” he says. “They might not invest $1 million in machine guns, but part of their investment will probably go there.” One exception was when the price of oil tanked. Midwest Tactical experienced a slide in sales, he says, because many of his clients work in the energy sector.
Goepfert didn’t set out to become the king of machine gun collectors. He just didn’t want to work for anyone else. “We really had no money—he couldn’t keep a job,” recalls Joy, who started dating Frank when they were teenagers sharing a high school locker. Eventually, he took up landscaping and built his own business, then tired of the physically demanding work. Looking around for something else, Frank turned to machine guns.
At first, he just wanted to own one. So in 2005, he looked into how he could get his hands on a machine gun legally—specifically his preferred firearm, an AC556, referred to by aficionados as the “buzzsaw.” It wasn’t easy, but it was worth the trouble, Goepfert says. A few weeks after buying it, someone offered him $1,000 more than he had paid.
At about the same time, he was pursuing another firearms-related hobby: building silencers, though he ultimately exited that market because it was too time-consuming. There was a residual benefit, though. “It kind of helped me develop a network,” he says. By 2008, when the financial crisis hit, Goepfert was cleaning out dealers who were closing up shop and developing relationships with older collectors looking to part with their guns. “We would have people call that they were hit by the recession, maybe they lost their job or business wasn’t as good as it had been, so they’d want to sell their machine guns” Goepfert says.
Recognizing how much care the guns require, Goepfert says he rarely makes purchases that require repairs. Very old guns are often left untouched by his staff of six, since changing them in any way could decrease their value. Some are so delicate that the act of firing them could cause damage.
Goepfert had carved out a profitable niche—one that would become much more lucrative when he started marketing his guns on the internet. His websites are now the first Google result for machine gun sales, and his business is a top 10 seller on Gun Broker, the nation’s largest online firearms auction marketplace. Midwest Tactical recently purchased SubGuns.com, a forum and classified-listing website, which Goepfert operates alongside MachineGunCentral.com. The web now generates 99 percent of Midwest Tactical’s sales, he says.
The ATF defines a machine gun as “any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot without manual reloading, by a single function of the trigger.” Actual machine guns rarely figure in criminal acts, in part because buying one is such a burdensome, expensive and paperwork-heavy process.
The National Firearms Act of 1934 slapped a $200 transfer tax on them, the equivalent of $3,773 in 2018 dollars. In addition to machine guns, the act regulated silencers and shotguns with barrels less than 18 inches long. Then came the Gun Control Act of 1968, which further expanded thedefinition of a machine gun. About two decades later, the Firearm Owners’ Protection Act effectively banned newly manufactured machine guns from being purchased by civilians at all.
Since then, machine guns that can be sold legally are referred to as transferrable, meaning they were previously registered with the National Firearm Registration and Transfer Record, according to the ATF. Machine guns that weren’t registered—but should have been—are illegal to possess.
Buying an AR-15 is as easy as visiting your local gun dealer and getting a background check. Buying a firearm from its current owner is even easier. A machine gun, however, is far from an impulse buy: The paperwork can take months, with many hurdles along the way that can stop the process.
Machine gun buyers have to go through a local, federally licensed dealer who must first take delivery, charging a fee of up to $200. Such dealers are required to fill out paperwork transferring the weapon to them and submit it to the ATF. “That paperwork is everything,” Joy Goepfert says. “That is the license for the gun. That gun really is not valuable without that paperwork.”
Barring any mistakes, that initial process can take as long as a month. Once complete, Frank Goepfert says, the buyer has to make an appointment with local law enforcement and fill out a fingerprint card for submission to the ATF. Additionally, the buyer needs to fill out a certificate of compliance. After that, a buyer has to show up again at the local gun dealer, fill out further paperwork, pay the $200 transfer tax, and ship the whole file to the ATF. Upon receipt, the agency will begin a background check and examine the paperwork. This process can take six months.
In some cases, these machine guns aren’t fired by their new owners—or even taken out of their cases. A few never even reach the buyer, staying in the dealer’s hands until the price appreciates enough to sell it. Machine guns serve purely as an investment tool for anyone willing to endure the requisite bureaucratic obstacles—an extreme version of requirements gun law advocates seek for more common types of firearms.
Eventually—unless the statutes controlling machine guns change—legal sales will become increasingly rare as their numbers inexorably shrink over time. In the meantime, those still circulating will likely keep getting more valuable.
(Michael R. Bloomberg, founder of Bloomberg News parent Bloomberg LP, is a donor to groups that support gun control, including Everytown for Gun Safety.)
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