The Rolex Price Inflation... One Market Explanation

[subdownunder]

I think we all agree that Rolex price growth are beginning to look like the Tulip Bulb Boom.
Now, even undesirable models of the past are inflating.

We discuss many possible reasons for this, but given that the secondary market is relatively small (relative to other markets) and there are only a few bigger players in the grey market maybe a classic market manipulation can take place.

Lets take the example of the OP turquoise (or any sports Rolex)... a relatively undesirable model until now.

A few factors do work in the OP's favour making it the ideal watch for this Market manipulation.
1. Its a Rolex

2. Its not too common

3. It has somehow been associated with Tiffanys (and by default subconsciously with the PP Nautilus)

4. Dealers were able to buy stock at a relatively inexpensive price.

Now here's the how to manipulate the market.......

1. Say a few dealers own a examples of this model maybe at a book value of $10k and given there is only a relative few examples of this watch they want to inflate the price by causing hysteria and hype in the market.

2. They list them for $15K then slowly remove the listings one by one giving the impression they sold.

3. They slowly re-list the same watches at $20K and again slowly withdraw them.

4. They then re-list these at $30K then $35K then $40k slowly withdrawing them each time.
,
5. Suddenly the $30K watch look really inexpensive and to the punter, there appears a big profit is to be made and a fear of missing out ensues.

6. The dealers, through forums and You Tube channels etc. encourage their influencers to break the exciting news about the desirability, rarity and spectacular price increases.

7. Dealers cash out with huge profits.

8. The naive are left holding an overpriced watch.

A TULIP BULB MANIA.

Is this Fantasy or Reality?

Frankly, given what I know about markets after 45 years I cannot rule it out.

Your thoughts.....

[dpt.calvin]

This conspiracy theory is nothing new and has been discussed ad nauseam.

[gerry100]

Tulip supply was easily multiplied.

Rolex supply cant be

[enjoythemusic]

I blame Willy Wonka...

Or aliens

attachment-Willy-Wonka.jpg

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[enjoythemusic]

Ask yourself, what would Arn Anderson do?

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[Bmcg]

There are certainly some unusual things occurring that would support this theory

[Feb_29]

It's not as complicated. Aside of OP41 in torques color is a beautiful watch.

1. It's a Rolex
2. Color of the dial
3. Celebrities start wearing this watch (huge factor in anything not only in this case, really)

That's it IMO

[enjoythemusic]

Plan Of Action

[JR16]

Originally Posted by dpt.calvin

This conspiracy theory is nothing new and has been discussed ad nauseam.

Agree, this has been going on for a few years and discussed to death on TRF. Nothing to see here.


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[geoffreyis]

Move along folks.

[Airane]

I wouldn't say the current market is 'apples-to-apples' to the Tulip bubble because the tulips were bought intentionally on the speculation that they can sell it later for a profit. Although the grey market dealers buy and sell watches for profit, a majority of people buy Rolexes because they love them and intend to keep them.

All transactions require sellers and buyers.

The 'market value' is defined as the general price that is high enough for the sellers to relieve their goods yet the price is low enough for the purchase the good.

I don't disagree with your 'scam' but there are 2 other variables that you should consider:

Variable#1

People at their current job are now working from home which decreases their living expenses (thus generally increasing the $ willing to spend on luxury purchases)

People who lost their jobs and found new ones most likely got a substantial pay increase from their job transition (thus generally increasing the $ willing to spend on luxury purchases)

The stock market rebounded (thus the original group of rolex purchasers have returned to luxury purchases)

Variables#2

Global supply chain is still highly impacted due to covid. For example, what used to have a 8 week lead time now has a 18-20 week lead time. Delays in global supply chain decrease the supply thus increases the demand.

I state the items above in order to accurately explain my theory on the high prices: Prices are only going to increase if people are willing to purchase the increased price. Period.

These sellers can artificially create scarcity and value but it's only going to work if there are buyers. Clearly there's an increase of new buyers and current buyers with the spare cash to increase their bid.

[Bmcg]

It will solve itself

[malba2366]

People with various interests will look for reasons that the Rolex Mania is different than the Tulip Mania but they are essentially he same phenomenon and will end the same way - the only difference being that the hard floor for Rolex prices will be 10-30% below MSRP for most models and they won't go to almost 0.

[bmrk]

The memes in the thread are so funny

[enjoythemusic]

Originally Posted by malba2366

...the only difference being that the hard floor for Rolex prices will be 10-30% below MSRP for most models and they won't go to almost 0.

Well said as a Rolex, car, home... has intrinsic value. Perhaps the real question is what's the hard floor for....

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[EEpro]

The dealers here don't hold OPs slowly removing and relisting and hoping for appreciation. They churn and burn a 20-30% spread as fast as possible as they buy from flippers just under market and sell at market or test just over-market pricing.

This theory of yours has been debunked regarding Daytonas multiple times here where a forum member eventually confesses to being the insane $20k buyer. The oh my god you're stupid $30k buyer .. etc.

They really are selling them to actual people who don't want to play the AD game. I was a flamed moronic hype beast who was slated to "lose my a$$" on my $20,500 white Daytona in Jan 2020.

Same thing today just higher price.

[WilsdorfNDavis]

Originally Posted by enjoythemusic

I blame Willy Wonka...

Or aliens

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Attachment 1269358

[enjoythemusic]

^^^ good call

[amanbra]

The tiff was relatively undesirable until now? What? Yeah stopped reading after that but yeah okay…

[teck21]

Originally Posted by EEpro

The dealers here don't hold OPs slowly removing and relisting and hoping for appreciation. They churn and burn a 20-30% spread as fast as possible as they buy from flippers just under market and sell at market or test just over-market pricing.

This theory of yours has been debunked regarding Daytonas multiple times here where a forum member eventually confesses to being the insane $20k buyer. The oh my god you're stupid $30k buyer .. etc.

They really are selling them to actual people who don't want to play the AD game. I was a flamed moronic hype beast who was slated to "lose my a$$" on my $20,500 white Daytona in Jan 2020.

Same thing today just higher price.

That’s the way it is.

The middlemen have no incentive to be ‘manipulating’ Rolex prices upwards.

Unless they get them direct from ADs at msrp which is a separate conspiracy theory altogether.

Simple logic suggest that both are nonsense, but jealousy often manifests in mysterious ways.


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[inadeje]

Originally Posted by Airane

I wouldn't say the current market is 'apples-to-apples' to the Tulip bubble because the tulips were bought intentionally on the speculation that they can sell it later for a profit. Although the grey market dealers buy and sell watches for profit, a majority of people buy Rolexes because they love them and intend to keep them.

All transactions require sellers and buyers.

The 'market value' is defined as the general price that is high enough for the sellers to relieve their goods yet the price is low enough for the purchase the good.

I don't disagree with your 'scam' but there are 2 other variables that you should consider:

Variable#1

People at their current job are now working from home which decreases their living expenses (thus generally increasing the $ willing to spend on luxury purchases)

People who lost their jobs and found new ones most likely got a substantial pay increase from their job transition (thus generally increasing the $ willing to spend on luxury purchases)

The stock market rebounded (thus the original group of rolex purchasers have returned to luxury purchases)

Variables#2

Global supply chain is still highly impacted due to covid. For example, what used to have a 8 week lead time now has a 18-20 week lead time. Delays in global supply chain decrease the supply thus increases the demand.

I state the items above in order to accurately explain my theory on the high prices: Prices are only going to increase if people are willing to purchase the increased price. Period.

These sellers can artificially create scarcity and value but it's only going to work if there are buyers. Clearly there's an increase of new buyers and current buyers with the spare cash to increase their bid.

This ^^^^^

[RoRoRo]

I’ll make it easier for you…

…it’s the cheapest Rolex to buy

[zengineer]

I highly doubt most grey dealers are organized enough to form an actual conspiracy, but they really don't need to be. Social media creates demand. Demand drives price when supply is limited.

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[Xtralarg]

Originally Posted by zengineer

I highly doubt most grey dealers are organized enough to form an actual conspiracy, but they really don't need to be. Social media creates demand. Demand drives price when supply is limited.

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Dealer groups exist. They control the market. Its a relively small network.

[alphadweller]

It's undeniable to me there is market manipulation, just like in other non-supervised markets, cryptocurrencies and NFTs for example. There's a lot of pump and dump going on. Some punters are and will be left holding the bag.

[zengineer]

Originally Posted by Xtralarg

Dealer groups exist. They control the market. Its a relively small network.

I recognize that is how watches arevtraded at the wholesale level. I'm just not convinced that the outright orchestrated manipulation of specific references actually takes place. Regardless, it still takes someone with 50k who just can't live without a white Daytona.

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[Xtralarg]

FOMO + hype + cheap money = Crazy prices so it seems