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5.24.2017 Free Investment Newsletter Bookmark

The .380


I knew it would happen, it always happens. Over the weekend while talking “off topics” in my last article, I had mentioned I had changed my personal concealed carry gun from a Ruger LCP to a Barretta Pico. It is chambered in .380. I should have started counting the seconds after it was sent, because I knew someone would write in and give me noise about carrying a .380 for self defense.  This was the first and most colorful of them. (exactly as I received it for special effect)



You don’t know much about guns do you? There is a reason the cops use .40s and 9 MM and not silly little 380s. your not going to stop anybody with that, you need a real bullet with stopping power. Stick to the economy, you don’t know what you are talking about with guns.


Well how about that? I’m not in the business of trying to embarrass people, so I’ll try my best to keep on an even keel here.  I’m also not in the bragging business, it just doesn’t seem fitting. However, I’ll let a few facts surface and then we’ll get to the meat of the issue.


Do I know anything about guns? More than  most. Why? Because while you might not know it, I’m a silent partner in a company that does nothing else than train people in gun fighting. From the basics of shooting, to getting your concealed carry license to high end tactical handgun and rifle. We’ve trained police, SWAT, Highway patrol, and thousands of “regular folk”. Our lead trainer is an ex sniper out of the military. Our other trainers have years of tactical defense training.


Even if just a little bit of what they teach rubbed off on me, I’d know more than most of you. But I can say that a lot more than a little bit got on me. I’m not them, I don’t profess to be. But you can’t be around that many people of that quality for so many years and not learn a few things. Without trying to sound boastful, I’ve sent more lead downrange than probably anyone you’ll ever meet.


But that doesn’t mean I know everything, I don’t. But I do know what I do know and one thing I know is that there’s more digital ink spilled concerning what’s the best self-defense round than almost any other topic.  EVERYONE has an opinion about it. Some of them are fairly sound, some of them are stupid. But trust me, they all have one.


I guess the author of that little note didn’t read all of the little article I had penned. I said I’d much rather have my 9MM than my .380. But if I won’t go through the machinations needed to carry the bigger weapon, and I leave it at home…what good is that? None. Remember folks, the best carry gun is the gun you WILL carry. All the time. Every day. One that you’re comfortable with.


Another issue with the author is that he mentions the “cops” don’t use .380. Well, no they don’t. But maybe you hadn’t noticed, they’re allowed to carry out in the open, in wonderful holsters that are OUTSIDE the waistband, not inside with the barrel poking your privates.  If I was allowed open carry, then I too would be carrying a Glock 19 9MM.  I’m not allowed open Carry in Florida.


Moving along, I don’t want to get too graphic and inside baseball here, but let’s chat for a second about those words that everyone has heard “stopping power.” What is it? Does it exist?  Yes it does, but probably not how you think.


The three main ways a human stops functioning from a gun shot is 1) if the shot hits a really important area, such as the face/brain/spine. 2) from stress shock ( people have died from wounds that should not have killed them, yet the impact imparted so much shock to their system, they locked up)  3) blood loss that lowers your blood pressure until you pass out.


To give you an idea about how differently people react to things, here’s an article about a Navy Seal that was shot 27 times. Not only did he live, he killed three of the bad guys in Iraq while being shot.



Remember Trayvon Martin and Zimmerman? Martin was shot 1 time, and died. The human body is an amazing machine and reacts differently.


But one thing we know from law enforcement, and our military trainers is that ammo alone is not what you should depend on to stop an attacker. Some of these people smoking bath salts have shown superhuman strength. In other words “shot placement” is at least… if not much more important than what ammo you use.


I never want to fire my gun in self defense. If I have to hurl a bullet towards someone it means 1) something really terrible has or was to happen, and 2) there’s a gaggle of Lawyers just waiting to parachute down on me with lawsuits. 3) it’s going to cost big dollars, and finally… it’s often life changing.


That said, IF that situation ever arises, I want to be confident that I can stop the threat. So what does one do if you can’t comfortably conceal the  glock 19 in a tee shirt and shorts? You go smaller, you get the RIGHT ammo and you train. You put in range time, you put in simulator time. You learn muscle memory.


The advances in ammunition over the years has been truly amazing. The science behind “stopping” bad guys has evolved. One of the biggest problems one faces in a self defense situation is “over penetration”. Few people think about this until their trainer mentions it, but you take a high powered 9 MM, it can sail right through a person and kill the little kid 50 feet behind him. Ooops. There’s a problem.


So the science now is to send a lighter “bullet” with insane velocity ( speed) , that wallops its target with all that energy, expends that energy on impact ( doesn’t go through the other side and kill children) and fragments off into little pieces, each creating a wound channel (inducing bleeding) that quickly drops the attackers blood pressure to where he drops. That folks is the “new” stopping power.


Is a .380 capable of this? Absolutely. In fact, the ammo I use (for self defense) was created for the military by a man that lives just up the road from me.  It is without a doubt the single best man stopping ammo on the planet. Even in .380 this stuff will fly faster, hit harder, stop quicker, splinter further than anything ever made. It’s called Liberty Civil Defense.  ( note, don’t listen to the youtube reviews showing it in comparison to other ammo into ballistic gel. Please don’t. They all whine that it doesn’t have the penetration of the other rounds. Well DUH, it’s designed that way so it doesn’t go through your bad guy and kill grandma down the street!)


The arguments will never end. Ever. All you can do is make up your own mind. For me it’s quite easy, I have the right gun, the right ammo, I train religiously, and I will indeed stop the threat.  No need for cannons.


Okay? Good.


The Market…


Monday and Tuesday we continued the bounce that began Thursday;  after the 400 point down day a week ago. By the end of the day Tuesday the S&P was just 4 points shy of the all time high close of 2402.  So that Wednesday event was indeed a “one day wonder”. They walked it all back.


As the market powered back up to wedge itself at the highs, there was no lack of poor news. Mortgage applications fell, existing home sales fell, TIF and LOW missed earnings, the Richmond Fed report was supposed to be + 16, it came in + 1, etc. etc.  As you all know, except for rewarding companies that beat their estimates, it cares not one bit about economic fundamentals.


Today the futures were green ahead of the open and that did indeed translate into a bit of a green open. But what a session it was…can you say boring? Yes,  it was FOMC “minutes” day, and they were all looking forward to that event in the afternoon. But for the trading hours ahead of that, you could say that indeed paint actually dries faster than the market was moving. At 1 pm, we had a whopping 15 million shares of the SPY traded. That’s Christmas eve volume, maybe less.


Heading into the FOMC minutes release we had the DOW up 37, the S&P up 2, and the NASDAQ up 9.   When the minutes hit, it was pretty clear that they’re still on track to hike in June. Most members felt more tightening appropriate “soon” Yet there was “just enough” gunk in there that gives them cover if they decide not to.  There’s always that “data dependent” language.


They also mentioned that they feel there’s a decent plan in the works to start “normalizing” their balance sheet. As you might know, they’ve got 4 trillion on their balance sheet, that they say they want to work off.  That was a bit surprising, because most people thought they wouldn’t start harping on that until later in the year.


So what was the reaction? There was none. Not at first anyway. We went up a smidge, we went down a smidge and 12 minutes later, we were exactly where we were before the release. But as time went on, for what ever reason they got more comfy with the minutes and for the first time all day, we had “tied” the all time high close at 2402.


Heading into the final stretch, I noticed at 3:30 that the S&P had inched up to 2403. All they needed was 2402, and they had it. As the final bell rang, we had “done it”. We had a spanking new all time high close on the S&P.  We rang the bell at 2404, two points higher than the previous all time high.


We have left the realm of reality, and you have to understand that. Today Mr. Shiller of the Case/Shiller research team came on CNBC and suggested that one of his ratio models hit 45 back in the 90’s and if that happened today, the market would be 50% higher from here. Could that happen? I imagine it can. It isn’t hard to move stocks when all you have to do is print money and buy them. Central banks print money.


Think of it like this. Back on March 1 we put in an all time high on the S&P.  Then we spent Almost 3 months trading sideways. Now we’ve put in another all time high. Where did the “new money” come from to drive us to this new high?  Some from selling bonds for instance, certainly. But unless the money supply expands, money that’s already in circulation has to “leave” something to go into something else. What’s it leaving?


So we put in a new all time high. We pulled off that miracle, NOT on a flood of new volume, with people clamoring to get in the door. The SPY, which is so very popular because you don’t have to choose any individual stocks, should have been flooded with people piling in…right?  Well, not so much. We had 40 million shares traded.


Just as a for instance… last Wednesday on the big sell off, we traded 172 million. Monday as the market was moving back toward the old highs, we did 68 million. Tuesday 48 million…and today on a clear break to new highs…. Just 40 million.


Is that important to note? IF this was a normal market, HELL YEAH. Big volumes down and smaller volume break outs is textbook taboo. But again, this isn’t a normal market.


IF we hold above 2402 on a closing basis for a few days, you can sort of make the case that we’re entering a new leg higher. But just know that On March 1 when we made a new all time high, it lasted one day and we spent two and a half months to try it again.  Then on May 15th we did it again, setting a high…only to fall for 400 DOW points thereafter. So, we simply need to see if today is going to stall out and once again we fade lower.

The big picture trend for many months has been “trade sideways for a couple months and blast higher”. Then “trade sideways again for a couple months and blast higher. Well, we’ve traded sideways since March 1. Lets see if we get the next blast higher.  If we do, we’ll latch onto it.  Good luck out there!

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