It's a well-oiled American machine: A mass shooting is followed by a stock-market rally of the two publicly traded gunsmiths. Morbid as it may be, the response has mostly been rational. Citizens, worried for their safety and the imposition of more stringent ownership rules, stockpile guns.
The phenomenon just repeated itself with the murder of 49 innocent people in an Orlando nightclub by an AR-15-wielding madman citing Islamic State as inspiration. Shares of Smith & Wesson, the maker of a handgun that People magazine says belonged to the shooter, gained nearly 7 percent on Monday. Sturm Ruger's were up nearly 9 percent.
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The fear factor has been in evidence before. In the two months after the slaughter of 20 children and six teachers at Sandy Hook Elementary School in Connecticut, the number of National Instant Criminal Background Check System inquiries — a proxy for new gun sales — increased by 63 percent, to 5.3 million, from the same two months the year before.
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Those killings provoked a strong legislative response. Some states imposed restrictions, including on assault weapons like the one used in Orlando. A Senate proposal to impose background checks on nationwide sales of guns failed by a handful of votes, however. As that result became clear, gun sales dropped.
When a husband and wife inspired by Islamist militants killed 14 people in San Bernardino, California, toward the end of 2015, momentum swung again. According to the FBI, the number of background checks surged to a record 3.3 million last December, and has averaged more than 2 million a month since.
History suggests that Orlando should keep the trend going, but this time might be different. Issues of national security are running up against America's lax gun laws. The unparalleled ease of buying military-style weapons is enabling a form of DIY jihadism. The killers in the Florida and California massacres appear to have obtained theirs legally, and without any involvement of a caliphate.
The 9/11 hijackers exploited similar loopholes in America's slipshod transportation system. The response was to tighten them and make the system safer. It may be foolish to bet on U.S. legislators acting rationally on gun regulation. The simple investment thesis of going long gunmakers when tragedy strikes, however, is getting much riskier.
Commentary by Rob Cox, the Editor-in-Chief of Reuters BreakingViews. Follow him on Twitter @rob1cox.
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