Am I right thinking this?

[Watchlover4789]

I don’t understand why ppl keep hoping and discussing rolex bubble to burst, I’m no expert in anything but my simple guess would be.. if the bubble burst prices crash, wouldn’t there be more rich ppl or people that can afford snapping up all those watches and thennn creating a demand and supply problem again? I think it only will burst unless nobody want rolex anymore.. what are your thoughts?

[Innocenti]

I think you have it spot on .
The market price is what enough people are willing to pay.

[Swearengen]

Doesn't it come down to why people want them? I would imagine most buyers aren't the WIS type and are buying because they believe they can sell it on to someone else at a profit sometime in the future. Eventually the price support will dwindle

[adawil2002]

Grey seller prices should crash, price gouging is reprehensible. New Rolexes at MSRP or no sale.

[teck21]

Won’t know till it happens.

My suspicion is AD demand has exploded to such an extent that any crash will still leave demand (being the willingness and ability to purchase) at ADs well in excess of supply, for the sports models if not all models.

Not so confident about grey market demand should a crash happen. The willingness and ability at current price levels might not be as strong.


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[LouG]

Originally Posted by adawil2002

Grey seller prices should crash, price gouging is reprehensible. New Rolexes at MSRP or no sale.

Rolex grey prices...?

I say lettem' crash.....

[Mr. K]

Originally Posted by adawil2002

Grey seller prices should crash, price gouging is reprehensible. New Rolexes at MSRP or no sale.

Consumers do not like paying 2 to 3 times MSRP. I get that. But, the market is the market.

I think of price gouging as more of pertaining to products that are necessities and the buyer has no choice but to buy it.

Watches are not a necessity.

The flip side, what is a gray dealer supposed to do? Sell all the watches at retail? That's not a good business practice. I think the people who are buying the watches at inflated prices have just as much a part to play in the inflated market as the sellers.

My hope is one day things will get back to normal and we can just buy watches. People who want and will appreciate the watch for the watch, and who will also wear it, will be able to walk into a dealer and buy one. But those days might be gone for a while if not forever.

[paxjedi]

The situation is also partly a result of the global supply chain problem.
Consumers in general, regardless of the commodity are buying more than the producers can supply.

Would be a very interesting economics case study in Business School.

(I am an economist).

[Mr. K]

Originally Posted by paxjedi

The situation is also partly a result of the global supply chain problem.
Consumers in general, regardless of the commodity are buying more than the producers can supply.

Would be a very interesting economics case study in Business School.

(I am an economist).

Good point, didn't even think about that

[bradastra]

It's probably less a "Rolex bubble" and more just a general "bubble." A lot of people are riding really high right now on crypto gains and home equity (not to mention a smaller number of people spending stimulus money or 'repurposing' PPP funds). Some substantial number of those people may find themselves pinched hard if their paper gains don't ultimately materialize when it counts. We will see. The first thing to go will probably be the $15K watch they couldn't actually afford. Then you have to also factor in the supply chain issues, and also the fact that so many people repurposed their vacation money for luxury good purchases when travel became difficult or impossible.

[georgekart]

I think there are two reasons market bursts: 1.A giant economic crisis. In which case most people who want those watches wouldn't be buying anyway so they won't benefit. 2. 2x increase in MSRP. Yes, pieces that are 3x MSRP currently might become available if MSRP becomes 2x what it currently is. However, I don't think that's what people who want the bubble to burst to happen either. At this point I think we're doomed.

[WatchNutcase]

Yes what you're saying makes sense if the only thing that crashes is Rolex, and nothing else.

But chances are that if Rolex prices were to crash, we would be seeing all kinds of assets crashing as well like real estate prices. Everything is in a bubble right now due to crazy amounts of money printing from the governments (inflation) during covid lockdowns.

[garyk]

Originally Posted by Watchlover4789

I don’t understand why ppl keep hoping and discussing rolex bubble to burst, I’m no expert in anything but my simple guess would be.. if the bubble burst prices crash, wouldn’t there be more rich ppl or people that can afford snapping up all those watches and thennn creating a demand and supply problem again? I think it only will burst unless nobody want rolex anymore.. what are your thoughts?

Economics 101, supply and demand.

[CarlOver]

If demand goes down for an extended period, resellers will lower prices. If no one bought watches from gray dealers from one month you would see aggressive price lowering. Sellers of all products need to move product to make money. If we had a 30% correction in the market, there might not be wealthy people buying up watches. They would be more concerned about other things.

[vengapat]

Thats exactly why its not a bubble :)

[garyk]

Originally Posted by CarlOver

If demand goes down for an extended period, resellers will lower prices. If no one bought watches from gray dealers from one month you would see aggressive price lowering. Sellers of all products need to move product to make money. If we had a 30% correction in the market, there might not be wealthy people buying up watches. They would be more concerned about other things.

Let her rip, I will snap up every discounted watch I can get my hands on...

[Solo118]

Demand for Rolex is highly unlikely to go down. And guess what, production for Rolex is also highly unlikely to go up (in a big way)

We are in it for the long haul unfortunately.

[Andad]

Wow, I can’t believe just how much I am learning on this thread.

[shaunylw]

Originally Posted by Solo118

Demand for Rolex is highly unlikely to go down. And guess what, production for Rolex is also highly unlikely to go up (in a big way)

We are in it for the long haul unfortunately.

Agreed. Even if we saw a huge decrease in price, which is highly unlikely, the group of folks that are still in line is huge. The demand would need to be much lower for it to have any effect. I could see RM, certain aps and certain Patek taking a hit, but a lot of that is due to dealers passing watches back and fourth.

[Cambo]

If this is a bubble, we are at the beginning of it. Seems like there is still some way to go. IMHO, I don't see prices dropping much from here, excepting some pieces.

[Dougiebaby]

Originally Posted by Watchlover4789

I don’t understand why ppl keep hoping and discussing rolex bubble to burst, I’m no expert in anything but my simple guess would be.. if the bubble burst prices crash, wouldn’t there be more rich ppl or people that can afford snapping up all those watches and thennn creating a demand and supply problem again? I think it only will burst unless nobody want rolex anymore.. what are your thoughts?

I believe the main motivation of the Rolex bubble burst crowd is either:

1. They hate all of the attention Rolex is getting — in summary jealously.

Or

2. They can’t get one and hope a bubble burst will give them access — in summary jealousy.

Both roads lead to one core underlying emotion … jealousy.


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[Kevingrr]

It will burst because that is what bubbles do. Impossible to say exactly how and when it will.

Rolex watches will still be good. Which is nice.

[Rogerab]

Sometimes things leak rather than burst. If there is weakness my guess is prices will leak lower rather than burst overall.

[copperjohn]

There will be no “Rolex bubble” that bursts. Rolex sells watches for what they sell it for, and won’t be dropping their prices. If you bought from an AD you are good to go.

The aftermarket may ‘burst’.

[1665fan]

Originally Posted by LouG

Rolex grey prices...?

I say lettem' crash.....

Agree

[1665fan]

Originally Posted by Dougiebaby

I believe the main motivation of the Rolex bubble burst crowd is either:

1. They hate all of the attention Rolex is getting — in summary jealously.

Or

2. They can’t get one and hope a bubble burst will give them access — in summary jealousy.

Both roads lead to one core underlying emotion … jealousy.


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I always think the same when someone starts a post knocking the Daytona lol….

[Laszlo]

The only way is to replace the fad with something else that’s hotter. Unfortunately there isn’t anything to steal that away from Rolex.

What would do it is if AP and/or Patek made a mass-produced SS sports watch (that’s bad ass) at the $10k price point that suddenly becomes the thing to have.

[inadeje]

Billions in surplus cash injected into the financial system creates a mass buying hysteria. Hysteria leads to lack of supply. Lack of supply leads to price appreciation.

Remove the cash injection and the ballon deflates, fast…

As the fed abandons quantitive easing allied to interest rate hikes, said double whammy will blow the bottom out of all inflated markets and speculation. Don’t try to catch a falling knife, or in our case buy at the top of these hysteria fueled markets, or there’ll be tears.

Economics 101

[Michael T]

Originally Posted by inadeje

Billions in surplus cash injected into the financial system creates a mass buying hysteria. Hysteria leads to lack of supply. Lack of supply leads to price appreciation.

Remove the cash injection and the ballon deflates, fast…

As the fed abandons quantitive easing allied to interest rate hikes, said double whammy will blow the bottom out of all inflated markets and speculation. Don’t try to catch a falling knife, or in our case buy at the top of these hysteria fueled markets, or there’ll be tears.

Economics 101

Agreed, I have been amazed by how many of my college educated friends, all with business degrees, have no comprehension of the unnatural amount of mortgages and bonds purchased by the Federal Reserve, and the potential downside from the cessation of purchases and subsequent unwind.

[donas]

I don't believe it will burst because there is not bubble. The price of Rolex went up and it's there to stay.