RIP vintage Rolex hobby?

[psv]

I've been discussing this with a few fellow watch enthusiasts, it seems to me that prices of the "desirable" vintage Rolex pieces (Daytona, Sea-Dwellers, Explorer, Submariners, GMT, Milgauss etc) have now firmly moved into a territory where they are no longer available for regular hobby collectors.

I know some people will say it is just market pricing, but ever since a bunch of taste makers and trend-setters got into vintage Rolex the last couple of years, and these people generated a demand from the bored ultra-rich class, the prices have left this atmosphere. Sadly, a great many of these buyers don't really care about the industry or history, it has just become a cool thing to have, or yet another investment vehicle, very few watches get worn and enjoyed.

Market pricing seems to be controlled by a surprisingly few number of people. Talented and skillful operators like Andrew Shear brings top-quality pieces to market, but also do so by offering watches at premium prices, often over 25% higher than what one would expect. Who can blame them, because their is a segment of buyers that doesn't really care if they pay e.g. $11,000 or $16,000 for a minty 1665, so why not maximize profit? The downside for the community is that it creates comps and drive the inflation of prices into outer space.

So rest in piece vintage Rolex collecting. I enjoyed the times when I was offered 1655's for $400; the years a minty Sub was $2-3K tops, or even quite recently when an unpolished 16660 was less than $6,000. I guess it is time to start learning about and collecting certain Omegas, Heurers and Breitlings instead. The race has certainly already begun there too but at least one has a chance of getting a nice piece for under $5,000.

Thoughts/comments?

[Puffy]

I smell a bubble!

Getting into Omegas and Heuers seem like a good hedge. Or fine wine.

[joe100]

Originally Posted by Puffy

I smell a bubble!

Getting into Omegas and Heuers seem like a good hedge. Or fine wine.

I hope it is a bubble.

The think that will kill it once and for all, is the fact parts are becoming more scarce every day.

[joe100]

I completely agree.

I used to have a DRSD before the big price shift and countless Subs, GMTs etc. it got to the point where it wasn't worth it to have a watch worth that much strapped to my wrist daily. At least not to me.

I've shifted away from the sport models and into the AK, Date, DJs where reasonable prices can still be seen. Omega offers some good bargains still but they're climbing too. I recently purchased an unmolested SM30, serviced, and a period bracelet. Still reasonable but quite a bit more than I'd have paid 3 years ago

[HERITAGE82]

I agree with your assessment and must say that the fad of wearing vintage (and NATO's for that matter) has kind of put me off. I remember when I would spot a person wearing a Vintage Rolex and they were either one of two people:

1) a collector or enthusiast that I could enjoy talking watches with (or)

2) an older person who bought the watch decades ago and just see's it as his/her timepiece

NOW you see vintage Rolex (and vintage watches in general) on so many different people that are following the trend it has tainted my view of my once loved hobby. Also, as you stated the prices have followed the demand and risen to a point where average people (myself included) are being pushed out of the market.

I am just glad that I have my collection at a point where I am very happy and no longer feel the "need" to keep buying pieces. There are always going to be vintage watches I "desire" but I am thankful to have owned and currently one pieces that have fulfilled my cravings.

My

[Max72]

It happens in every hobby that can be turned into a business. I saw it happen in my other hobby, WWII militaria collecting, few celebrities getting involved, a bit of publicity then speculators moved in buying scarce items, rising the prices and turn those items into "rare"... no interest for History whatsoever... just flipping stuff over to make a profit; Internet can be a valuable instrument to the committed collector but also helps bridging the gaps making the speculators job easier and mainstream by amplifying the offering to a wider odience. I guess Rolex being a luxury item first and a collectible for some had its days numbered as a niche hobby....

[enhamhale]

I do fully agree with this topic, here in uk the vintage market is also overtaken the new prices making it expensive to collect and have a hobby making the ultimate watch some times double the new price . Also there seems to be this consensus of a vintage watch being in near mint condition after 30-40 years old . After a good moan I'm still looking

[mrewright]

It is truly a sad turn of events for genuine hobbyists that many of the more desirable rare pieces have become quite difficult to afford.

[kanikune]

To say about Omega: They are shutting parts distribution for the independents, that will effect on the overhaul costs and in that way rises the overall prices - one would think. The demand might also die or suffer at least.

[JohnBaker3]

The same thing happend to vintage Porsches not so long ago.

When I left the military in 1975, I drove by a used car lot in Southern California. There sat a lovely 356 Speedster, black on black, nicely restored.

$5500 cash would have purchased her....sadly it is now but a fond memory....

And yes, the good quality vintage submariner has gone the same route. Some of it is inflation, but the other is spurned on by people with more money than us and need a place to park it...

[nsumner]

Originally Posted by JohnBaker3

The same thing happend to vintage Porsches not so long ago.

When I left the military in 1975, I drove by a used car lot in Southern California. There sat a lovely 356 Speedster, black on black, nicely restored.

$5500 cash would have purchased her....sadly it is now but a fond memory....

And yes, the good quality vintage submariner has gone the same route. Some of it is inflation, but the other is spurned on by people with more money than us and need a place to park it...

Very right. You could have also bought a 1973 911 rs for around $10,000, that's car's about 250k today.

[mdw3]

Originally Posted by nsumner

Very right. You could have also bought a 1973 911 rs for around $10,000, that's car's about 250k today.

I think you may have been asleep for the past 7 years or so. A no stories touring car (that's right, a road version) is now pushing $750,000. Lightweight will run way over $1M.

As an aside, this months Sports Car Market has a detailed feature about the current state of the market that contributors here might find interesting. The complaints made are common to every other collecting field, but so it shall be, I believe. This market has matured.

Michael

[Max72]

Better find my "new" RED 1680 asap...

[shane0mack]

I agree with most of the sentiments here, unfortunately. As someone who's not very wealthy, I can't even think about touching anything gilt or with red letters on the dial. I think my go-forward strategy will be to focus on certain movements. I wouldn't mind chasing V72s or 321s, etc. There is still value to be found with off-brands or off-references carrying the same movements as venerable pieces like Daytonas and Speedys.

[Kingair]

Checked out a 1966 swb for a friend a few days ago

275,000.00

Even the 912 are going up in price . . . month after month

The Porsche nobody wanted . . .

The Datsun 240Z . . .

Same thing

Amazing

HAGOne

Sent from my SM-N900T using Tapatalk

[FTX I]

Great thread Patrick. Will be nice to follow this one.

[Alexus]

IMHO I think there is no bubble.
The Demand from Asia etc. is so huge... it's never gona be cheaper...maybe some dents but in general up up up....

[psv]

I agree that I don't believe there is a bubble. It is like real-estate prices in NYC upper east-side, or vintage Porsches, etc. There might be some small corrections during economic downturns but the prices are just going to keep on going up. Which is a double kill-joy because it was one thing to wear that fun vintage watch you got for $3,000 on a daily basis, but when vintage piece is worth $25K, $50K or over $100K??? It will stay locked away in a vault.

[lhanddds]

I purchased most of what I have after the crash in 08/09. It might take something like that to correct the market again. Don't really want to see that happen but I don't really like buying at inflated prices either. There will probably be more time between purchases as I don't really like many modern watches.


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[springer]

I really don't see the "doom and gloom" regarding vintage Rolex. If you go back just 10 years and look at the prices for the new watches and then fast forward to today, they've doubled in price. Respectively, vintage has appreciated also. Look around, prices today have escalated substantially from five to ten years ago - no matter what you collect or purchase.

One thing that I have noticed with the vintage Rolex watches is that the nice examples offered for sale have dried up substantially the past year or two. When this occurs, supply and demand dictates prices.

[JohnBaker3]

Originally Posted by springer

One thing that I have noticed with the vintage Rolex watches is that the nice examples offered for sale have dried up substantially the past year or two. When this occurs, supply and demand dictates prices.

+1

Amazingly, the vintage Rolex market may be the ONLY market out there that ISN'T manipulated by the boys on Wall Street...

Every other headline lately has been about LIBOR, FX, gold, silver, equitities and the relentless High Frequency Trading....

I guess it is refreshing to see something behave on the free market ideas of "supply and demand".....

You go Rolex!

[psv]

Originally Posted by JohnBaker3

+1

Amazingly, the vintage Rolex market may be the ONLY market out there that ISN'T manipulated by the boys on Wall Street...

Every other headline lately has been about LIBOR, FX, gold, silver, equitities and the relentless High Frequency Trading....

I guess it is refreshing to see something behave on the free market ideas of "supply and demand".....

You go Rolex!

Almost John, a large part of new money/buyers are if not trust fund babies but bankers so they are certainly influencing the demand, ergo the prices.

Hence, I'm not crying foul or do away with free markets, I'm simply making the observation that prices of vintage Rolex have now gone beyond the levels of normal hobbyist to be able to get any quality pieces.

[JohnBaker3]

Originally Posted by psv

Almost John, a large part of new money/buyers are if not trust fund babies but bankers so they are certainly influencing the demand, ergo the prices.

RATS !

We just can't seem to catch a break from those criminals in 3 piece suits!

[QueueCumber]

Originally Posted by JohnBaker3

+1

Amazingly, the vintage Rolex market may be the ONLY market out there that ISN'T manipulated by the boys on Wall Street...

Every other headline lately has been about LIBOR, FX, gold, silver, equitities and the relentless High Frequency Trading....

I guess it is refreshing to see something behave on the free market ideas of "supply and demand".....

You go Rolex!

Originally Posted by psv

Almost John, a large part of new money/buyers are if not trust fund babies but bankers so they are certainly influencing the demand, ergo the prices.

Hence, I'm not crying foul or do away with free markets, I'm simply making the observation that prices of vintage Rolex have now gone beyond the levels of normal hobbyist to be able to get any quality pieces.

http://www.bloomberg.com/news/2012-0...n-in-fund.html

[Puffy]

Originally Posted by JohnBaker3

Amazingly, the vintage Rolex market may be the ONLY market out there that ISN'T manipulated by the boys on Wall Street...

Actually John, not true, there are watch funds out there that have been around for years and they can indeed be cooked up to be more than what they are to still remain within the rules.

Debt needs to be underwritten and we're back to Wall St and the Square Mile. "We'll underwrite and this is what we want funds to be priced at to offer ~x return".

And now the UK FCA says the UCIS funds can only be marketed to investors with approx £250k to throw at them.

Article below published today.

Watch funds offer investment in limited editions

Watches, in common with other “passion” investments such as art and wine, do not behave like ordinary commodities. Value can be hard to ascribe, and sales depend on a small number of potential buyers.
Those buyers tend to be collectors, a pursuit that comes with risks attached.

Justin Koullapis, co-founder and director of Watch Club, a vintage retailer, says: “Watches are artefacts with subjective attributes; it’s not just a numbers game. There are reasons why ugly watches don’t increase in price. It’s difficult to strip out emotion.”
Nevertheless, a report published this year by private bank Coutts found that fine watches had risen in value 176 per cent since 2005. With UK base rates stuck at 0.5 per cent, some investors see watches as an alluring prospect.
There are a select few funds on offer. One of the best known is Precious Time, run by Elite Advisers and established in 2010 by Alfredo Paramico, an Italian banker and watch collector. The fund had a reported €23.6m under management at the end of 2012 – representing 500 watches.
The Watch Fund operates on similar lines. It is run by Dominic Khoo, a former Antiquorum and Spink valuation expert, and has offices in Geneva, Hong Kong and Singapore. For $250,000 or more, investors can buy into the fund and receive a personal portfolio of watches of equivalent value.
Mr Khoo says the fund offers the ability to acquire “queue-cutting watches and extreme limited editions”. It has 30 investors with a total of $25m in more than 100 watches.
Most investors receive and wear the timepieces, although as Mr Khoo says: “We once faced the situation of a client who asked us to video ourselves putting the watches in a safe-deposit box and FedEx-ing them the key.”
The watch fund concept is becoming more common, as investors recognise the potential value of a pristine watch stored safely.
London-based retailer Watchfinder, with 12 years’ experience buying and selling used watches, is considering setting up a fund. “We have people ring us up and ask us to buy three or four of a certain watch and put them in the safe with the box and papers,” says Lloyd Amsdon, co-founder. “Then they ring up after two or three years and say: ‘Right, I want to get out of that; find me something else.’
“We had a Patek Philippe that the customer bought for £300,000 and sold 18 months later for £425,000 without ever wearing it.”
When it comes to assets, two brands come up time and again: Rolex and Patek Philippe. But the funds buy other brands, and experts have their own ideas about which is currently undervalued.
For Mr Koullapis, it is 1950s Breitling Navitimers. However, this is not a market given to surprises.
“[Most] watches are not investment grade,” says Mr Khoo. “We sift through thousands of watches monthly to arrive at our purchases.”
With the top end of the market ruled by Patek Philippes and Rolexes, the future of watch funds could lie further down, at a level where short-term gains on a wider range of watches might be possible, and trades are common enough for pricing information to come into the market.
Watchfinder’s fund would work along such lines, says Mr Amsdon, offering investors the chance to buy into a portfolio with just a few thousand pounds and for their money to be invested in models from Bremont to Bulgari.
This year, unregulated collective investment schemes (UCIS investments) such as funds investing in watches, wines or stamps, had new restrictions applied. The UK Financial Conduct Authority has ruled that schemes can be marketed only to investors with either annual incomes of more than £100,000 or with more than £250,000 to invest.
It remains to be seen what impact this will have on initiatives such as that proposed by Watchfinder.
-------------------------------------------
Performance: How they compare
What do returns on watch funds look like and how much do they cost?
Elite Advisers’ Precious Time fund claims an annual average return of 15 per cent, but recently it has returned closer to 12 per cent. Watch Fund says its investors expect 20-30 per cent returns after a period of two to three years, and that it has averaged 10-15 per cent annually.
Watchfinder’s inventory has grown in value by 6.6 per cent a year on average.
By comparison, the fine wine investment market has returned an average growth of 12.1 per cent for the past 25 years.
Fund management fees vary, but are generally high. Precious Time charges a fee of 2.5 per cent and takes a cut of 20 per cent if profit exceeds 5 per cent.
At Watch Fund, investors part with 5 per cent as a purchase fee. If they leave the fund, they pay 10 per cent of their profit or 5 per cent of the total sale price, whichever is higher.
Watchfinder expects to charge clients a performance fee of about 10 per cent.

[Tudor Fan]

Originally Posted by JohnBaker3

+1

Amazingly, the vintage Rolex market may be the ONLY market out there that ISN'T manipulated by the boys on Wall Street...

...well, who's bonuses do you think are buying those over $100k vintage Daytonas and $50k big crowns? Same with classic cars. Last year the best performing investment sector of them all. Vintage watches and cars, art from established artists, precious metals, high end real estates are all forms of hedging agains the looming economic collapse...

Until that happens prices - all prices - will go up. After, all bets are off.

[Cortezthekiller]

Originally Posted by Tudor Fan

...well, who's bonuses do you think are buying those over $100k vintage Daytonas and $50k big crowns? Same with classic cars. Last year the best performing investment sector of them all. Vintage watches and cars, art from established artists, precious metals, high end real estates are all forms of hedging agains the looming economic collapse...

Until that happens prices - all prices - will go up. After, all bets are off.

Indeed, as equity bubbles inflate so go the collectible markets. Unfortunately on the other side, collectibles are much less liquid and are usually sold at a deep loss in trying times. Rough for those late to the game or cash poor.

[Tudor Fan]

Originally Posted by Cortezthekiller

Indeed, as equity bubbles inflate so go the collectible markets. Unfortunately on the other side, collectibles are much less liquid and are usually sold at a deep loss in trying times. Rough for those late to the game or cash poor.

True.

[Bk100]

I agree ....

I paid list , $6100 , for a 116520 Daytona from an AD in 2001 , I think it was ...........it's now $12K list ....... Vintage prices follow new prices....

-bk

Originally Posted by springer

I really don't see the "doom and gloom" regarding vintage Rolex. If you go back just 10 years and look at the prices for the new watches and then fast forward to today, they've doubled in price. Respectively, vintage has appreciated also. Look around, prices today have escalated substantially from five to ten years ago - no matter what you collect or purchase.

One thing that I have noticed with the vintage Rolex watches is that the nice examples offered for sale have dried up substantially the past year or two. When this occurs, supply and demand dictates prices.

[BNA/LION]

Agree the prices are going up. The big money is in the game, maybe not as collectors but as investors or someone who wants to be seen with a pricey, rare or hard to get watch.

There are definitely a handful of sellers around the world and on watch forums just like this who have made buying/marking up/selling watches their job or primary source of income. The sellers who are marking things up outrageously and supply/demand are all responsible for this Vintage Rolex situation.