When do you think secondary market prices will bottom out?

[brandrea]

Originally Posted by Zsprings

Not exactly, but it would be great to just go to an AD and buy the model watch we want without having to wait more than a couple of weeks ! Discounted,.... of course!

Discounts for a luxury brand is a bad look IMHO.

[Vince_76]

Originally Posted by BraveBold

I joined the forum last year, “post-hype”… got my “hype” Rolex in 2019, pre-hype. It was already trading at a 50%++ premium to msrp at that time (SS Daytona). For context had been interested in and buying watches for perhaps 15 years prior to getting my first Rolex.

When I saw prices rocket I knew it wouldn’t last. I don’t actively trade in/out of my collectibles so didn’t sell any watches. Same with other things I collect.

I also didn’t add anything that fell into a “hype” category. I didn’t entirely stop buying but added nothing people were speculating on.

That speculative sub-segment fell back and is (in my view) fully corrected today. There will be some further easing but would be surprised it anything dramatic. I imagine depleted savings for big swaths of the population here in the US will eventually become a real drag (hasn’t happened) but I think for Rolex that hit has already been felt, along some other aspirational luxury goods.

The tricky part is that any further macro erosion will support central bank aggression with rate reductions - restarting the cycle. So while we may not be at absolute bottom today it is likely we’re a) not far off and b) as likely to be in a boom cycle again in 24 months from now.

You’re drawing a 1:1 correlation to fed funds rates/liquidity/economic health and asset pricing for a trinket.

I think you’re forgetting a key part of the analysis - that watches as “investments” was the flavor of the month so to speak during COVID. But things fall out of fashion, and it’s becoming ever more apparent that flippers are getting squeezed out. So the demand is not linear. Once we get to a point where folks realize they’re losing money out the door. And we’re getting closer to that every day.

[OTX]

Originally Posted by brandrea

Discounts for a luxury brand is a bad look IMHO.

Absolutely!. I bought a Grand Seiko new from an AD for $7600 last year and sold it recently as I fell out of love with it. Sold it for almost a 50% loss and this thing had most of the warranty left and was in mint shape!. Left a sour taste in my mouth for the brand. It just cheapens the brand!. Only watch I buy new is Rolex as they hold really well. Discounting is disastrous for a brands prestige!. Look at Luis Vuitton. They refuse to discount anything even by 1% and if something doesn’t sell, it goes back to the factory and gets reused to make something else instead of selling it at a discount.

[GrailTime]

Judging by this sites For Sale forum, the prices are still ridiculously high.

P1sses me off a little when sellers on here want to price their watches at significantly over what the lower equivalent is on ebay or Chrono24. Especially given that most will be avoiding tax on the sale.

[GrailTime]

Originally Posted by OTX

Absolutely!. I bought a Grand Seiko new from an AD for $7600 last year and sold it recently as I fell out of love with it. Sold it for almost a 50% loss and this thing had most of the warranty left and was in mint shape!. Left a sour taste in my mouth for the brand. It just cheapens the brand!. Only watch I buy new is Rolex as they hold really well. Discounting is disastrous for a brands prestige!. Look at Luis Vuitton. They refuse to discount anything even by 1% and if something doesn’t sell, it goes back to the factory and gets reused to make something else instead of selling it at a discount.

50% is quite a loss. Which model did you buy?

But really, one should expect, in a normal environment, to take a loss on selling a watch you bought.

Rolex have a fine balancing act perform going forward. Their watches are still massively in demand, yet, they know that they could be selling double or triple the number of watches they do on a daily basis.

An AD told me very recently that only two or three watches are leaving their store a day.

The AD's, and im sure Rolex, would love to be selling far more watches, but what does this do to the desirability of the brand going forward?

You have to think they want to sell more, at the very least to quash the gray market.

[OTX]

Originally Posted by gaffs

50% is quite a loss. Which model did you buy?

But really, one should expect, in a normal environment, to take a loss on selling a watch you bought.

Rolex have a fine balancing act perform going forward. Their watches are still massively in demand, yet, they know that they could be selling double or triple the number of watches they do on a daily basis.

An AD told me very recently that only two or three watches are leaving their store a day.

The AD's, and im sure Rolex, would love to be selling far more watches, but what does this do to the desirability of the brand going forward?

You have to think they want to sell more, at the very least to quash the gray market.

It was a SBGE215. I expected a loss but not 50% and that was a private sale!. What’s worse is the highest gray dealer offer was 60 percent off what I paid. What made it hurt more is that it was only a few months old with most of the warranty remaining and was in new shape!.

Rolex historically has held their resale value pretty well and I’m sure Rolex will do everything they can to maintain that as it’s a very important part of the brands prestige. Usually, if one buys a non Rolex preowned, then you’ll probably break even as someone else took the initial hit. The GS was an impulse buy for me. I learned a very valuable lesson though. Only buy Rolex new…everything else pre owned.

[GrailTime]

Originally Posted by OTX

It was a SBGE215. I expected a loss but not 50% and that was a private sale!. What’s worse is the highest gray dealer offer was 60 percent off what I paid. What made it hurt more is that it was only a few months old with most of the warranty remaining and was in new shape!.

Rolex historically has held their resale value pretty well and I’m sure Rolex will do everything they can to maintain that as it’s a very important part of the brands prestige. Usually, if one buys a non Rolex preowned, then you’ll probably break even as someone else took the initial hit. The GS was an impulse buy for my. I learned a very valuable lesson though. Only buy Rolex new…everything else pre owned.

Agree with you there. I have a couple of used Omega's. Fantastic watches but I would rather let someone else take the depreciation hit.

[OTX]

Originally Posted by gaffs

Agree with you there. I have a couple of used Omega's. Fantastic watches but I would rather let someone else take the depreciation hit.

[Calatrava r]

Originally Posted by OTX

It was a SBGE215. I expected a loss but not 50% and that was a private sale!. What’s worse is the highest gray dealer offer was 60 percent off what I paid. What made it hurt more is that it was only a few months old with most of the warranty remaining and was in new shape!.

Rolex historically has held their resale value pretty well and I’m sure Rolex will do everything they can to maintain that as it’s a very important part of the brands prestige. Usually, if one buys a non Rolex preowned, then you’ll probably break even as someone else took the initial hit. The GS was an impulse buy for me. I learned a very valuable lesson though. Only buy Rolex new…everything else pre owned.

This is true on most brands. It’s why the cases are full up with them.

[Fleetlord]

Originally Posted by OTX

It was a SBGE215. I expected a loss but not 50% and that was a private sale!. What’s worse is the highest gray dealer offer was 60 percent off what I paid. What made it hurt more is that it was only a few months old with most of the warranty remaining and was in new shape!.

Rolex historically has held their resale value pretty well and I’m sure Rolex will do everything they can to maintain that as it’s a very important part of the brands prestige. Usually, if one buys a non Rolex preowned, then you’ll probably break even as someone else took the initial hit. The GS was an impulse buy for me. I learned a very valuable lesson though. Only buy Rolex new…everything else pre owned.

Honestly you are lucky that you actually sold the Grand Seiko

Grand Seiko has absolutely plummeted in value and desirability over the last few months.

I was under the weather the other day and and spent some time submitting some watches for sale on some well known preowned dealers sites to see what they are "buying". Grand Seiko is either a HARD PASS or TRADE ONLY. You cannot get a dealer to give you CASH for one. They will not take one in inventory for CASH.

I think except for a few top models, the dealers are 100% out of the GS business.

Rolex, while softening a bit on secondary market, this means that you may get paid less than retail for some models, but they more than likely will generate a cash offer. Other brands? Nah. Back to nobody wanting them again..

[OTX]

Originally Posted by Fleetlord

Honestly you are lucky that you actually sold the Grand Seiko

Grand Seiko has absolutely plummeted in value and desirability over the last few months.

I was under the weather the other day and and spent some time submitting some watches for sale on some well known preowned dealers sites to see what they are "buying". Grand Seiko is either a HARD PASS or TRADE ONLY. You cannot get a dealer to give you CASH for one. They will not take one in inventory for CASH.

I think except for a few top models, the dealers are 100% out of the GS business.

Rolex, while softening a bit on secondary market, this means that you may get paid less than retail for some models, but they more than likely will generate a cash offer. Other brands? Nah. Back to nobody wanting them again..

I’ve been in the watch game for a long time and that is the most I’ve ever lost on a watch. Damn my impulse lol. You are correct though, many dealers were just straight up not interested in buying it. I contacted 6 of them and only 2 made offers. The highest offer was $3000 which was shocking as I thought the watch being only a few months old and still has most of the warranty would get me more than that. Never again!. My butt still hurts from it 😁

[OTX]

Originally Posted by Calatrava r

This is true on most brands. It’s why the cases are full up with them.

True

[BraveBold]

Originally Posted by Vince_76

You’re drawing a 1:1 correlation to fed funds rates/liquidity/economic health and asset pricing for a trinket.

I think you’re forgetting a key part of the analysis - that watches as “investments” was the flavor of the month so to speak during COVID. But things fall out of fashion, and it’s becoming ever more apparent that flippers are getting squeezed out. So the demand is not linear. Once we get to a point where folks realize they’re losing money out the door. And we’re getting closer to that every day.

No, not drawing a 1:1 ratio - but know all too well that watches weren’t unique. They were one of many segments that were impacted.

Ultra speculative equities (SPACs, anything Cathie Wood endorsed), crypto, some watches, some cars, some cards, some comics, some coins, some stamps, some <insert additional segment here>) - all more than “linearly” impacted.

All those categories unwound. Sometimes carrying other assets down too far - savvy investors buy when others panic.

The watch market - Patek and AP in particular but also Rolex to a lesser degree, dropped sharply as well. But that unwind - it already knocked off the speculative flippers from AD waitlists. They are mostly not participating other than holding inventory. I mentioned the inventory overhang (or think I did) but that is unlikely to crater the market further. Why? Because the true excess demand has been there for a while… and global wealth has gone up more than production over the past few years. So fundamentals are strong.

I perversely wish the market would crater - but there are many others ready to pounce too. Remember, this is all dynamic and iterative, not static. If demand falls sharply overall, rates will follow. One won’t happen without the other and those trillions in short duration investments will flow right back in…

[cmc_tht]

Some had bottomed imo, i.e. the Batman

[APhound]

Originally Posted by cmc_tht

Some had bottomed imo, i.e. the Batman

Eh who knows. I feel like it wasn’t THAT long ago my local ad had one sitting there and I thought about it and decided it was too much money.
My friend bought a hulk that day and got a discount.

Sent from my iPhone using Tapatalk

[seabreeze]

Originally Posted by Fleetlord

Honestly you are lucky that you actually sold the Grand Seiko

Grand Seiko has absolutely plummeted in value and desirability over the last few months.

I was under the weather the other day and and spent some time submitting some watches for sale on some well known preowned dealers sites to see what they are "buying". Grand Seiko is either a HARD PASS or TRADE ONLY. You cannot get a dealer to give you CASH for one. They will not take one in inventory for CASH.

I think except for a few top models, the dealers are 100% out of the GS business.

Rolex, while softening a bit on secondary market, this means that you may get paid less than retail for some models, but they more than likely will generate a cash offer. Other brands? Nah. Back to nobody wanting them again..

This

[S’portEye]

Lot’s of people smarter than me on this thread. However, I firmly believe that we have not seen the bottom yet.

[Vince_76]

Originally Posted by BraveBold

No, not drawing a 1:1 ratio - but know all too well that watches weren’t unique. They were one of many segments that were impacted.

Ultra speculative equities (SPACs, anything Cathie Wood endorsed), crypto, some watches, some cars, some cards, some comics, some coins, some stamps, some <insert additional segment here>) - all more than “linearly” impacted.

All those categories unwound. Sometimes carrying other assets down too far - savvy investors buy when others panic.

The watch market - Patek and AP in particular but also Rolex to a lesser degree, dropped sharply as well. But that unwind - it already knocked off the speculative flippers from AD waitlists. They are mostly not participating other than holding inventory. I mentioned the inventory overhang (or think I did) but that is unlikely to crater the market further. Why? Because the true excess demand has been there for a while… and global wealth has gone up more than production over the past few years. So fundamentals are strong.

I perversely wish the market would crater - but there are many others ready to pounce too. Remember, this is all dynamic and iterative, not static. If demand falls sharply overall, rates will follow. One won’t happen without the other and those trillions in short duration investments will flow right back in…

“But that unwind - it already knocked off the speculative flippers from AD waitlists”. Not true. I literally just sold my submariner for $2000 profit. Stainless steel models trend downward, but there’s still a meaningful spread that has kept flippers incentivized. However, that trajectory is clear that it is heading towards aversion to the mean

“If demand falls sharply overall, rates will follow. One won’t happen without the other” again, not true. The fed does not adjust rate based on secondary watch market demand. If they did, that would be the exact one-to-one correlation that I was talking about which you are refuting. I can paint numerous scenarios, whereby demand decreases with fed funds rate remaining static, or at the very least elevated. The most salient example would be, and is, watches, falling out of “fashion” or “hype” or “investment” for certain cohorts.

No one has a crystal ball, but I think many are too quick to assume that the correlation between economic health, and watch prices (adjusted for inflation) are strongly correlated.

[cmc_tht]

Originally Posted by APhound

Eh who knows. I feel like it wasn’t THAT long ago my local ad had one sitting there and I thought about it and decided it was too much money.
My friend bought a hulk that day and got a discount.

Sent from my iPhone using Tapatalk

Those were the days...

[Hollie_Rollie]

Originally Posted by Vince_76

“But that unwind - it already knocked off the speculative flippers from AD waitlists”. Not true. I literally just sold my submariner for $2000 profit. Stainless steel models trend downward, but there’s still a meaningful spread that has kept flippers incentivized. However, that trajectory is clear that it is heading towards aversion to the mean

“If demand falls sharply overall, rates will follow. One won’t happen without the other” again, not true. The fed does not adjust rate based on secondary watch market demand. If they did, that would be the exact one-to-one correlation that I was talking about which you are refuting. I can paint numerous scenarios, whereby demand decreases with fed funds rate remaining static, or at the very least elevated. The most salient example would be, and is, watches, falling out of “fashion” or “hype” or “investment” for certain cohorts.

No one has a crystal ball, but I think many are too quick to assume that the correlation between economic health, and watch prices (adjusted for inflation) are strongly correlated.

Was the economy not doing well between 2012-2016?


Sent from my iPhone using Tapatalk

[superpop]

You guys are confusing a fashion trend with an economic trend. Fashion, Hype and FOMO have driven the price of Rolex up, with the flippers flooding in to make an easy buck. Rolex does not produce investment securities, they produce fashion baubles.

[avidflyer]

Originally Posted by superpop

You guys are confusing a fashion trend with an economic trend. Fashion, Hype and FOMO have driven the price of Rolex up, with the flippers flooding in to make an easy buck. Rolex does not produce investment securities, they produce fashion baubles.

And at least a million a year….soon to maybe two million….

[Vince_76]

Originally Posted by Hollie_Rollie

Was the economy not doing well between 2012-2016?


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Straw man argument. Again, the economy can do well while watches appreciate yet the latter is not dependent on the former.

Yes, economy did well ‘12 - ‘16, but Rolex was selling under retail, AP you were losing money out the door, etc. Asset pricing appreciated over this time, but watch market was relatively static adjusting for inflation.

[Ceriano]

Originally Posted by Vince_76

“But that unwind - it already knocked off the speculative flippers from AD waitlists”. Not true. I literally just sold my submariner for $2000 profit. Stainless steel models trend downward, but there’s still a meaningful spread that has kept flippers incentivized. However, that trajectory is clear that it is heading towards aversion to the mean

“If demand falls sharply overall, rates will follow. One won’t happen without the other” again, not true. The fed does not adjust rate based on secondary watch market demand. If they did, that would be the exact one-to-one correlation that I was talking about which you are refuting. I can paint numerous scenarios, whereby demand decreases with fed funds rate remaining static, or at the very least elevated. The most salient example would be, and is, watches, falling out of “fashion” or “hype” or “investment” for certain cohorts.

No one has a crystal ball, but I think many are too quick to assume that the correlation between economic health, and watch prices (adjusted for inflation) are strongly correlated.

That's a good profit margin for a sub. Did you sell it yourself or sold it to a grey dealer? I thought most grey dealers are now offering the MSRP or a little above assuming the watch is un-worn.

[Mystro]

Originally Posted by Ceriano

That's a good profit margin for a sub. Did you sell it yourself or sold it to a grey dealer? I thought most grey dealers are now offering the MSRP or a little above assuming the watch is un-worn.

Just traded a LVc back in. It depends on the condition of the watch and seller but a lot above msrp for a mint pre owned has been my experience.

Are trusted sellers are moving watches this past month. I personally watched one seller sell 5 pre owned BLNR on Jubilee for top dollar ($17.5-18k+) in under a week. Every watch sold in under 12 hours of it being posted. SS GMT market is absolutely ticking up.
That $17k-$21k is where all SS GMT’s are moving. BLRO above the $21K in that $23K range are not and are sitting. This is just a momentary snap shot of a slow time of year post Christmas in where we are.

[Vince_76]

Originally Posted by Ceriano

That's a good profit margin for a sub. Did you sell it yourself or sold it to a grey dealer? I thought most grey dealers are now offering the MSRP or a little above assuming the watch is un-worn.

Sold on MODA.

[supernova]

Originally Posted by Fleetlord

What is the expectation here? Rolex 20% below retail through greys and AD stuffed with watches to buy at will?

Ah those were the good old days. Not that long ago mind you... And I wouldn't be surprised if we go back to that although I do think will take a number of years.

[Ceriano]

Originally Posted by colonelpurple

Rolex will keep demand > supply by either pushing up prices or restricting supply. It is a private company, they can do whatever they want.

They will also try to up the focus on bi-metal and precious metal, where there is far more margin.

I read an interview with the had of Patek. He said they didn't make money from selling SS models. They only keep a few around for fans, but otherwise everything is going to precious metal. Obviously they are tiny compared to Rolex, but the sentiment is the same. The main difference is that Rolex sells enough watches to keep a margin for SS, and also knowing they are buoyed by enthusiasts who mostly like SS watches.

Watch the interview, don't listen!
I'm sure they make a pretty healthy margin on their $30K precious SS pieces too. They'll have to keep the supply tight so people spend money on their high margin PM pieces.

[MILGAUSS88]

The watch market will stop going lower when the Chinese economic markets start to recover.
The 2 biggest influences on the market where China and bitcoin.
Bitcoin isn't doing bad, so that leaves China.

[liberalclown]

Originally Posted by MILGAUSS88

The watch market will stop going lower when the Chinese economic markets start to recover.
The 2 biggest influences on the market where China and bitcoin.
Bitcoin isn't doing bad, so that leaves China.

I disagree, it's the monetary growth that drove the frenzy. Cash is scarce and the layoffs going around the world, either the production will drop to keep the prices stable, or the prices will continue to go down to increase the demand.