Rolex as an Investment

[Lt.Arclight]

Rolex manufactures around 2000 watches during a business day.And it looks like they will be making them for some time to come... They hold their value well-but that isn't or shouldn't be the reason you buy a wristwatch.

There has been times the used market isn't as strong as it is now. Don't justify a luxury purchase as an investment. In fact admit that you want a Rolex and purchased it to treat yourself with something nice.

I've been collecting watches since 1981 and there has been times that it is VERY hard to sell a top tier watch. I bought my first BNIB Rolex from an AD, a black dial Explorer II- it costs me $875 plus tax. Now that is close to what you'll spend to have it completely serviced. Rolex as an investment ? Hardly.

DiamondJack's post is 100% "on the money".

[Singslinger]

Originally Posted by jay1988

Should you buy it as an investment ? No. You don't see people shoving stocks and stacking their shelves with DSSDs.

However as a luxury item it does appreciate well. That's all that can really be said about it. It holds its value extremely well and if you keep it in good condition you could probably make a bit of money of it in 5 years because of price increases.

Would I invest in it by buying hundreds of them ? No but the great thing about a Rolex is you can always sell it without taking too much of a loss which makes it a good luxury item to acquire.

Absolutely right. If you were to look solely at the percentage return, then yes it looks like a good investment.

But 1) the present secondhand sale price (assuming the watch is sold) isn't sufficient to replace the watch with a new one and 2) it only makes financial sense - to me at least - if the owner buys 10-20 of these watches and sells the whole lot if the price does rise. I seriously doubt anyone would do this.

In other words, to qualify as a good investment to me, percentage return isn't enough - the absolute figure is equally, if not more, important.

[Citizenrich]

Originally Posted by DiamondJack

An investment (in conventional terms) should produce an income.... so stocks, shares, bonds, commercial or rental property, deposit accounts etc etc.

Everything else is purely a speculative gamble on future value....... There is nothing to say a watch or a piece of jewellery or even something like a classic car won't make you a good return on your initial outlay but you are kidding yourself if you believe you are making an investment whenever you buy something that is non income producing......

Now clearly, if you trade watches at a sufficient volume, you are then moving into the realms of a commercial enterprise.... hopefully based on sensible financial foundations. If you were a company, you would pay out dividends to investors based upon that profitability.

But would you invest in a company that just bought watches for the directors to wear...... and they told you they would sell them one day in the future to make a profit I rest my case.......

My excellent B school education and some dude named Warren from Omaha have a different definition of an investment than you do.

There are all sorts of ways to put capital to work and many, if not most, of those
produce or carry no current income.

[Citizenrich]

To answer the original question: any successful passive investment has to do with price and timing.

[Citizenrich]

Originally Posted by Singslinger

Absolutely right. If you were to look solely at the percentage return, then yes it looks like a good investment.

But 1) the present secondhand sale price (assuming the watch is sold) isn't sufficient to replace the watch with a new one and 2) it only makes financial sense - to me at least - if the owner buys 10-20 of these watches and sells the whole lot if the price does rise. I seriously doubt anyone would do this.

In other words, to qualify as a good investment to me, percentage return isn't enough - the absolute figure is equally, if not more, important.

Many investment partnerships; more commonly referred to as hedge funds, invest in collectible goods. Replacement cost would be no consideration.

[blue lion]

I justified my purchase by thinking that I could sell it whenever for generally what I paid for it.

[knapp8297]

Bingo....I justified everyone of my Rolex purchases
Knowing I could sell them for what I bought them for +/-.

[Aventura]

Originally Posted by AH0RSEY

... take a car for example, that would have almost certainly LOST 50% in those 4 years...

so anything on the plus side is a bonus .... even if it 'makes' 10% that's nice, but really I suspect people don't buy rolex for investment, rather its enjoyment.

IMHO watch investing is a different league I suspect and is pretty risky for those without the ability to win and lose on trades over time. But I'm sure its fun!!!

Good!! It's true. Excellent comment.
Regards.
Aventura.