True collectors and the tanking Rolex market

[Calatrava r]

A frequent question on the forum is who actually buys used watches at 3x retail? I doubt the folks who pay these prices are concerned about losing a little money. High-end custom-made suits are now 20K, all that money is forever gone. Classy restaurant meals for two are easily 2K many places with wine. People are paying 25K and much more market adjustments to buy sports cars. These folks simply pay to play, and they can easily afford it. I doubt they are in it for the investment angle. I would not worry about anybody getting hurt if the market for everything softens. Nothing goes up forever. Everything corrects. If you think you got hurt paying a premium, you did not understand the cyclical nature of life, the nature of luxury goods demand and probably could not afford the item in the first place.

[rolexpatek363]

Originally Posted by rolex16

Funny, because I bought at MSRP and stand to lose a lot of this same notional $ if the market goes down, yet I hope it happens. How do you explain that?

It's very hard to explain your thinking, is it some sort of "flex", as in "I'm so rich that I can afford to lose large amounts of money without the slightest worry"? How would you feel if your house was suddenly devalued/became unsaleable?

[rolex16]

Originally Posted by DonLee

if fewer people sold watches to grey dealers, then grey market prices would be even higher, given less supply.

if people NEVER bought from grey dealers, then their only chance of getting a watch is through AD, both situations end with it being even harder for people to get a watch.

I know people just like to blame everything on grey dealers but so many people don't understand the logic behind the economics.

One primary issue is the flippers clogging waitlists and reselling to greys. The lack of availability at the AD for normal customers due to this causes secondary market prices to rise. The greys appear to then sell amongst themselves, hoard the inventory and release slowly, etc. further driving up prices artificially, hence the outrageous amounts. If people stop buying from greys, they stop buying from flippers, and this whole house of cards comes down.

[rolex16]

Originally Posted by rolexpatek363

It's very hard to explain your thinking, is it some sort of "flex", as in "I'm so rich that I can afford to lose large amounts of money without the slightest worry"? How would you feel if your house was suddenly devalued/became unsaleable?

If you truly love watches, you don't care...right?

[Wahlberg]

Originally Posted by JSolution

The only people who are hoping so must be people that can’t afford to buy the watches at current market prices, which tells me that really they even with another 20 percent drop that means you really are over stretching and shouldn’t be buying them anyway.

A couple of years ago people weren't aware what you were wearing, nowadays everyone knows because of instagram and the prices of those watches. I like to walk around without having a target on my back.

I gained a lot on my watches, do I want more, sure. But I rather want it to be normal again. Too many people got into watches because of the wrong reasons and flippers ruined the market as well etc.

[ronricks]

Originally Posted by DonLee

if fewer people sold watches to grey dealers, then grey market prices would be even higher, given less supply.

if people NEVER bought from grey dealers, then their only chance of getting a watch is through AD, both situations end with it being even harder for people to get a watch.

I know people just like to blame everything on grey dealers but so many people don't understand the logic behind the economics.

If nobody buys from Grey’s they will have to lower prices significantly. Most Grey’s are over leveraged with stock. Most aren’t buying any Rolex or are only doing consignment or both right now. They are worried. I’m not ‘blaming’ anything on Grey Dealers. They can’t afford to sit on stock they overbought on for long. The AD’s are a separate issue all together. The watch market is softening no matter what sunshine pumpers on here are saying. Lots of denial from people who look at watches as just investments or money. Watches aren’t a casino.

Not buying from Grey Dealers will not make watches more scarce. It makes them plentiful.

[Watcheroo]

I was around well before and will be around well after this madness.


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[David001]

Originally Posted by S.Explorer

An alternative view is that people are not wishing for economic collapse but a return to normality.

No relentless money printing / devaluation of currency, no hyper inflation, reasonable return on cash savings, reasonable reseller pricing, etc. We wouldn't have so many flippers seeking immediate gains.

Yes, that's all I see.

I hope to see a return to the previous decades of sensible watch collecting that I have enjoyed over four decades and I don't think it's ok to have to put up with abuse just for pointing out the facts that prices are dropping.

[rolexpatek363]

Originally Posted by rolex16

If you truly love watches, you don't care...right?

Well, there's an FPJ I want, which is currently >£150k. I'm reasonably comfortable on a stellar pension with no debts, but at the same time I am far from mega-rich and simply can't afford to spend that sort of money on a watch, no matter how much I "truly love" it. So, at a certain level, cost/value has to be a consideration. Rolex & PP are the two brands historically least likely to devalue over the long term, and that is quite rightly a selling point.

Don't tell me none of the above factors into each watch-buying decision you make, unless you're a billionaire, in which case it's all loose change.

[huncho]

Originally Posted by francoamerican

Amazon stock is now flat from May 2020 to April 2022. Daytona up 75%. Makes sense?

Markets have to have many public transactions daily to have good price discovery. Wild to think the public equity markets would be less efficient than watch markets to people on here

If there are good rational fundamentals for these watches now, they must have wildly undervalued by markets prior to 2021. It can’t have been both rational then and rational now - not enough fundamentals have changed in this ~2 year period.

apple stock is up 110-150% from may 2020. you can pick and choose stocks to fit any narrative and i don't really think you can compare the two but i was just saying that the covid crash caused a fire sale that dumped many stocks 50-75%, so it would take something crazy to do the same for watches. let's be real, the stock market isn't at all rational either. it's much more efficient because it has billions of transactions, but it still has its own manipulation and speculation. we printed trillions of dollars, it would not make sense for watches to stay the same price when they're an asset

also most stocks are now down 50-80% in 5-6 months again so if anything were to take these prices back it should be the current economic situation. all we can do is wait and see though, will be interesting

[rolex16]

Originally Posted by rolexpatek363

Well, there's an FPJ I want, which is currently >£150k. I'm reasonably comfortable on a stellar pension with no debts, but at the same time I am far from mega-rich and simply can't afford to spend that sort of money on a watch, no matter how much I "truly love" it. So, at a certain level, cost/value has to be a consideration. Rolex & PP are the two brands historically least likely to devalue over the long term, and that is quite rightly a selling point.

Don't tell me none of the above factors into each watch-buying decision you make, unless you're a billionaire, in which case it's all loose change.

I totally agree with you. That has been my point all along. Wouldn't you love the market to return to reasonable levels so you could buy that FPJ, even if it meant losing those notional gains on the watches you already own (notional gains which would not matter if you love the watches and don't intend to sell or view them as investments)? How does the ever rising market help you get to that FPJ? I don't think it really does.

[Bizcut1]

Good medicinal weed. A staple of Rolex collectors....

You guys need to be sharing.

[rolexpatek363]

Originally Posted by rolex16

I totally agree with you. That has been my point all along. Wouldn't you love the market to return to reasonable levels so you could buy that FPJ, even if it meant losing those notional gains on the watches you already own (notional gains which would not matter if you love the watches and don't intend to sell or view them as investments)? How does the ever rising market help you get to that FPJ? I don't think it really does.

The one thing which bothers me is that I can no longer wear my 5712 in public without feeling conspicuous and potentially vulnerable. A boxer was robbed in the street recently for a lower-value watch. So, it needs to go at some point. Only hyper-rich people can afford watches in this price bracket, and I am led to believe that they are less affected by recession than us mere mortals. Hence I think this >£100k segment of the watch market will continue to rise in the future, despite adverse economic conditions for normal people.

I've long since given up all hope of getting that FPJ. You can't always get whatever you want, whenever you want it.

[1665fan]

Originally Posted by Watcheroo

I was around well before and will be around well after this madness.


Sent from my iPhone using Tapatalk

+1……..Insta clowns all over this forum now

[rolex16]

Originally Posted by rolexpatek363

The one thing which bothers me is that I can no longer wear my 5712 in public without feeling conspicuous and potentially vulnerable.

I understand this, and it is very unfortunate. The 5712 is a beautiful piece. Hard to believe the boxer got beat up, but seems to be happening more and more to athletes (who have $ and nice watches). I think an F1 driver was robbed in the street after the Euro finals. Awful!

[interestedinwatches]

Originally Posted by JSolution

So to put it into context, let’s say you bought yourself a Rolex submariner 126610ln at current market price, without checking let’s say this figure is £13k now you’re buying with the intention to wear, let’s say you should have already factored in to lose ten per cent when you sell it, now you have scratched it you have lost what maybe a further £1k? All secondary market watches have been polished to look like new anyway (unless they are new) which bring me back to my original point, if you’re concerned about losing an extra grand because you have scratched it, in my opinion, you can’t afford it.

That's not the point I'm making -- the point I'm making is that the watches have been valued to be so high in the market and they kept trending to go even higher and higher, that people don't want to scratch them even if they have a ton of money in the bank, because they're looked at as investment pieces rather than watches to wear. Why damage an investment, even if you're a millionaire?

And my other points still stand.

[francoamerican]

Originally Posted by huncho

apple stock is up 110-150% from may 2020. you can pick and choose stocks to fit any narrative and i don't really think you can compare the two but i was just saying that the covid crash caused a fire sale that dumped many stocks 50-75%, so it would take something crazy to do the same for watches. let's be real, the stock market isn't at all rational either. it's much more efficient because it has billions of transactions, but it still has its own manipulation and speculation. we printed trillions of dollars, it would not make sense for watches to stay the same price when they're an asset

also most stocks are now down 50-80% in 5-6 months again so if anything were to take these prices back it should be the current economic situation. all we can do is wait and see though, will be interesting

securites markets are substantially more efficient and rational than wristwatch markets. That’s my point. Apple is a much better buy than a Daytona. Unless you’re in a small group that can occasionally buy one at MSRP and even then big deal, you're up a whole 25k that you won’t choose to realize anyway and if you did after tax and bid ask spread you’d have net gain of 12k if you live in California . Please do not believe wrist watches are a good store of wealth or are uncorrelated assets.

Supply and demand applies to equity markets just as it does for currency markets and watches. The money printing narratives are largely reductionist and misleading. The USD has increased relative the Swiss franc, for example, by about 5% due to a return to modest but still historically low interest rates in the US.

[huncho]

Originally Posted by francoamerican

securites markets are substantially more efficient and rational than wristwatch markets. That’s my point. Apple is a much better buy than a Daytona. Unless you’re in a small group that can occasionally buy one at MSRP and even then big deal, you're up a whole 25k that you won’t choose to realize anyway and if you did after tax and bid ask spread you’d have net gain of 12k if you live in California . Please do not believe wrist watches are a good store of wealth or are uncorrelated assets.

Supply and demand applies to equity markets just as it does for currency markets and watches. The money printing narratives are largely reductionist and misleading. The USD has increased relative the Swiss franc, for example, by about 5% due to a return to modest but still historically low interest rates in the US.

i don't believe either. i bought mine because i genuinely wanted them and that's why i'm not selling them at the top either. just saying i'm not surprised prices went up, obviously i'm surprised and amazed they went up this much but with everything that happened the last 2 years it was inevitable that there would be premiums. of course buying a stock is better than a daytona at 35k, one is an investment and the other is gambling. but we're talking overall price of premiums going up due to demand, wealth creation, social media and inflation and what it would now take to bring them down 80% to msrp

[Donkos]

Watches are not the main thing in our lives, so worry about them.

[DonLee]

Originally Posted by rolex16

One primary issue is the flippers clogging waitlists and reselling to greys. The lack of availability at the AD for normal customers due to this causes secondary market prices to rise. The greys appear to then sell amongst themselves, hoard the inventory and release slowly, etc. further driving up prices artificially, hence the outrageous amounts. If people stop buying from greys, they stop buying from flippers, and this whole house of cards comes down.

flippers clog wait list because the prices of watches on grey market is higher than retail. If people weren't allowed to flip their watches, then the grey market will rise even more, which makes more people want to buy from AD. This is what's happening with the AP model right now cuz they can easily track who has sold their new watch, and people know they will be blacklisted if they flipped

[InsDawg]

Originally Posted by David001

If you're holding millions of dollars worth of stock and it 'only' loses 50% of it's value, then what do you think that will do to the market?

Once the value drops beyond a certain point then it's a compounding effect and the curve gets a lot steeper, just like it did on the way up.

I think that if the market drops 50% or even 35%, a dealer would be really squeezed and even functionally bankrupt. It all depends on what they bought the inventory at. So if a dealer has $10m in stock, purchased at say $6.5m or $7m, especially assuming there might be a middle man involved in some cases, and it drops by 40 or 50%, they are done. Especially if they financed any of their inventory.

[InsDawg]

Originally Posted by JSolution

Really nice collection - mine is similar and also all bought grey - I’m not losing sleep over prices as like you I’ve built a collection to enjoy, however if and I mean IF I wanted to sell my platinum Daytona which I could of sold for £200k or so a month or two ago, I would now be closer to £150k I don’t not see this as a positive and want it to further come down - as an owner. If I were lusting after pieces I can’t afford I’m sure I would be in the other camp.

Well there are some people that defy your logic which is that they can't afford to buy, and I know one intimately, that absolutely can afford to purchase, but simply think the current pricing levels are ridicules and can't bring themselves to pay $18k for a new Sub. They are the ones happy about some normalization. You didn't account for those people. I happen to be one.

[Ensign]

Originally Posted by interestedinwatches

Because it would be nice to actually walk around with a watch on your wrist without alerting potential thieves that they can score a shit ton of money by robbing you.

Yup. I’m in Los Angeles. Forget about enjoying your Rolex outdoors or in public venues. Didn’t used to be like that.

[rolex16]

Originally Posted by DonLee

flippers clog wait list because the prices of watches on grey market is higher than retail. If people weren't allowed to flip their watches, then the grey market will rise even more, which makes more people want to buy from AD. This is what's happening with the AP model right now cuz they can easily track who has sold their new watch, and people know they will be blacklisted if they flipped

Maybe I'm not understanding your point. My point wasn't whether flippers are allowed to, it was whether they no longer choose to because greys are no longer willing to buy from them because they are overstocked.

[huncho]

Originally Posted by interestedinwatches

Because it would be nice to actually not have to wait years if not infinitely long for a piece at the AD.

Because it would be nice to enjoy the watches for what they are rather than investment pieces.

Because it would be nice to accidentally scratch a watch because that is what they are and not worry about the price tanking.

Because it would be nice to actually walk around with a watch on your wrist without alerting potential thieves that they can score a shit ton of money by robbing you.

not being able to safely wear them is the worst part now but if prices fall to msrp these people still know they're expensive watches, and now they know how to spot them all easier. at the end of the day even a pepsi retails at 9k which is more than enough to be a target. eliminate premiums on gold rolexes/APs/pateks and they're still 25k+. the problem is that before all this most people didn't know how to identify these models, now everyone knows what a rolex looks like and people that are targeting others can spot any of these watches from a mile away. there will be money in it for them no matter what

agree with the rest of your points but i wouldn't want the entire economy to collapse and people to lose all their money for that to happen

[dnpina]

Im naive I suppose. Who's getting robbed for their watch? Is it a crime on the rise?

Sent from my Pixel 6 using Tapatalk

[amh]

Originally Posted by Ensign

Yup. I’m in Los Angeles. Forget about enjoying your Rolex outdoors or in public venues. Didn’t used to be like that.

Originally Posted by dnpina

Im naive I suppose. Who's getting robbed for their watch? Is it a crime on the rise?

Sent from my Pixel 6 using Tapatalk

I'm naive as well in that case. If it gets to the point of fearing for my life then these watches are something I need to get rid of.

"Do things that make you feel better, not things that make you feel worse."

[epicurus]

Originally Posted by dnpina

Im naive I suppose. Who's getting robbed for their watch? Is it a crime on the rise?

Sent from my Pixel 6 using Tapatalk

Youre not naive....youre in Texas. Enjoy your watch my brother.

[lear60man]

Originally Posted by Ensign

Yup. I’m in Los Angeles. Forget about enjoying your Rolex outdoors or in public venues. Didn’t used to be like that.

Start carrying or move. And yes I know your Sheriff doesnt hand out CCW's like he should be. LA needs a bilge pump.

[Ichiran]

Originally Posted by David001

I have a decent collection too, but as I said before, you could throw my whole collection into the river and it wouldn't affect me financially, I'd just mourn the loss of my watches.

Looking forward to you contributing in non-price and non-market collapse type of threads then. Let's talk watches or your watch collection in the other threads.