Why Rolex will emerge unscathed from this downturn

[TexEd]

Originally Posted by rolexpure

I dont think anyone is saying Rolex is going under MSRP but it is 100% going to be dropping a SIGNIFICANT amount of money from the current gray dealer prices. I'm talking 40-50% drops over the next 6 months. We are already at 15-20% drops in all the classifieds groups I'm in.

I also dont believe we will be going back to 2016/2017 prices BUT...........what we have seen in the last 12 months is just utter ridiculous and NEVER going to be sustainable.

Not for luxury veblin goods that provide absolutely ZERO benefit to anyone's life except for the hobby aspect.

No way will prices drop 40-50% in the next 6 months. In fact, I believe there will be zero drop.

[IamJacky]

Nice write up and I agree for the most part.

Fundamentally it always comes back to supply and demand. While we're seeing a market price correction, some may interpret it as a downturn or even a crash, but IMO it's just demand and supply meeting its equilibrium pricing.

Those who bought at high prices but to keep and wear (such as myself) may feel a slight sting, but that sting is nothing compare to the dread of not having the dream watch on our wrists.

It's those who bought with the investment attitude trying to make a quick buck that will suffer and start panic selling, which is why we're seeing all these price correction IMO.

[slus]

So many value and downturn threads. Rolex will continue being Rolex long after the IG boys go back to flipping sneakers or whatever is next. There was never a time in my life that buying a Rolex wasn't an aspiration or marker of success and celebration for a lot of people, that isn't going to change. Rolex controls the brand well.

[temporarychicken]

Nobody has a clue where prices are going next.

I can guarantee this though:

They will either go up, down, or maybe stay the same.

[kvbesq]

Fiat currencies are being printed an unprecedented rate leading to staggering real inflation and currency devaluations. Cryptocurrencies have the potential to be regulated out of existence and, regardless, are subject to power-grid/internet control issues. Rolex prices will certainly fluctuate but, at this time, production constraints prevent Rolex from overproduction thus keeping the pricing somewhat stable. In many circles, Rolex has become a form of currency like gold and used as a hedge. I think most people on this forum are truly "watch lovers" and when watches are discussed we are thinking from that perspective. The reality of the situation is that many watch buyers these days are not watch aficionados - they are just "investors" hedging a few bets. In this context Rolex pricing becomes very unpredictable.

[inadeje]

Originally Posted by kvbesq

Fiat currencies are being printed an unprecedented rate leading to staggering real inflation and currency devaluations. Cryptocurrencies have the potential to be regulated out of existence and, regardless, are subject to power-grid/internet control issues. Rolex prices will certainly fluctuate but, at this time, production constraints prevent Rolex from overproduction thus keeping the pricing somewhat stable. In many circles, Rolex has become a form of currency like gold and used as a hedge. I think most people on this forum are truly "watch lovers" and when watches are discussed we are thinking from that perspective. The reality of the situation is that many watch buyers these days are not watch aficionados - they are just "investors" hedging a few bets. In this context Rolex pricing becomes very unpredictable.

Excellent comments and observations. BTW, welcome to the Forum

[WalterE]

Originally Posted by 77T

Shifting gears…
Here is something I think deserves observation. If Rolex leadership was bullish about continued high demand then they’d maybe increase production. But they don’t seem to be raising that aspect. Being as conservative as they are, I think they never expected it to continue - nor be as resilient in the face of other headwinds.

To think that Rolex was THE DISRUPTOR and innovator when it took over the market decades ago, and now it is considered (one of) the most conservative brand out there...

[francoamerican]

Originally Posted by kvbesq

Fiat currencies are being printed an unprecedented rate leading to staggering real inflation and currency devaluations. Cryptocurrencies have the potential to be regulated out of existence and, regardless, are subject to power-grid/internet control issues. Rolex prices will certainly fluctuate but, at this time, production constraints prevent Rolex from overproduction thus keeping the pricing somewhat stable. In many circles, Rolex has become a form of currency like gold and used as a hedge. I think most people on this forum are truly "watch lovers" and when watches are discussed we are thinking from that perspective. The reality of the situation is that many watch buyers these days are not watch aficionados - they are just "investors" hedging a few bets. In this context Rolex pricing becomes very unpredictable.

It's odd to me that the laws of supply demand only seem to be invoked for some things and not others. Free floating currencies in developed economies are priced based on supply and demand just like wrist watches.

People who have millions of dollars in gold and alternative investments as a hedge against millions more dollars in equities hold most of that in securities, not in safety deposits or in mattresses. If they like watches they buy Rolexes as toys or as hobby assets, but they are not expecting to pay for travel housing education and property with them.

Really every argument for buying a rolex as an assets (brand and size and persistence) is 10 fold for just buying apple stock and not worrying about scratching it.

[Onikage]

I feel drunk reading this. From Rolex being elevated to levels of recognition rivalling Patek Philippe, Audemars Piguet and Vacheron Constantine when 99% of people have no idea what at least two of those are to Rolex being conservative. The latter has left me particularly tipsy..

[dubins930]

“Unquenchable thirst”

[Onikage]

Originally Posted by dubins930

“Unquenchable thirst”

I think that did it actually.

[avidflyer]

Originally Posted by Onikage

I feel drunk reading this. From Rolex being elevated to levels of recognition rivalling Patek Philippe, Audemars Piguet and Vacheron Constantine when 99% of people have no idea what at least two of those are to Rolex being conservative. The latter has left me particularly tipsy..

agreed....its out of control

[SubMillennial]

There were people here who thought BLROs would reach 50k, SS Daytona's 100k, and we'd never see a DJ on the shelf again.

No pity for the bagholders. But my scorn will be reserved for the petty tyrant sales associates who act like they are god's gift for selling you a Datejust and treat any prospective buyers like trash

[Podmornica]

THE ADS WILL BE BEGGING!

Soon, we will have our own waiting lists for those gents!

[amh]

Fact : Rolex is a marketing machine, much like red bull. Did you know that red bull doesn't even make their own soda? Currently running the best formula 1 team on the planet.

[inadeje]

Originally Posted by amh

Fact : Rolex is a marketing machine, much like red bull. Did you know that red bull doesn't even make their own soda? Currently running the best formula 1 team on the planet.

I didn’t know that. I know when it was founded they did make their own. When did it change?

[Tools]

"Rolex" will be just fine, and it will be a long time before their prices need to be adjusted at all. They continue to sell everything that they make and that is unlikely to vary much at all.

The speculators and flippers dealing in newer Rolex may be in for an awakening as the unsustainable asking prices correct. The true collector pieces aren't likely to change much at all.

[77T]

Originally Posted by amh

Fact : Rolex is a marketing machine, much like red bull. Did you know that red bull doesn't even make their own soda? Currently running the best formula 1 team on the planet.

I didn’t see the story…when did Red Bull buy Ferrari?

You DID mean Ferrari, right? You DO know they ARE the BEST F1 team on the planet…for ALL time.

Tifosi all agree on that.


Sent from my iPhone using Tapatalk Pro

[rolexpure]

Originally Posted by TexEd

No way will prices drop 40-50% in the next 6 months. In fact, I believe there will be zero drop.

Well you better get back into your little cave because we are already at 20%+ drops across the board.

[inadeje]

Originally Posted by TexEd

No way will prices drop 40-50% in the next 6 months. In fact, I believe there will be zero drop.

I concur

[superpop]

These threads are getting pretty old. We are talking about a mass produced fashion bauble, not a security. Reminds me of the beanie baby hype back in the 90's.

[Chris]

Originally Posted by Tools

"Rolex" will be just fine, and it will be a long time before their prices need to be adjusted at all. They continue to sell everything that they make and that is unlikely to vary much at all.

The speculators and flippers dealing in newer Rolex may be in for an awakening as the unsustainable asking prices correct. The true collector pieces aren't likely to change much at all.

[Golfbone]

Rolex men's sport watches over time have been a good long term investment provided that you bought them at MSRP or less. I think that will continue to be the case. If you paid above that used or from Grey than all bets are off and I think that is as it should be. As far as folks predicting a bloodbath in the stock market and a tanking of most securities in general....I've heard these predictions for the last decade at least and the people who make them have been wrong all along. Back in 2008 when we did have a huge drop I didn't hear too many people predicting it. If you make plans listening to these guys now you'd be as ill advised as you would have been last year, the year before and the years before that when they were dead wrong. We do not know the future.

[Watch This]

Originally Posted by SubMillennial

There were people here who thought BLROs would reach 50k, SS Daytona's 100k, and we'd never see a DJ on the shelf again.

No pity for the bagholders. But my scorn will be reserved for the petty tyrant sales associates who act like they are god's gift for selling you a Datejust and treat any prospective buyers like trash

yep

[Rolexatlast]

Originally Posted by HHIslander

Every Rolex is sold before it is made. I don't see that ever changing anytime soon. It would take a public image disaster of colossal proportions for them to see any huge reduction in demand.

I would suggest the vast majority of demand is from people buying, or trying to buy, because they expect value to increase. If that changes, then those buyers will disappear and Rolex will be where Omega are.

[Jack T]

The premise of this thread is nonsense; what conceivable reason would anyone have for wondering is Rolex will be alright after some theoretical, yet to be realized downturn. All the hype, the soaring grey market prices, the voracious demand hasn’t really done all that much for Rolex’s bottom line. They sell all their watches at wholesale prices to their AD distributors, just like they have for 100 years. Maybe an occasional price increase here and there, but that’s about it.

And about having a place among the so called holy trinity? Don’t be ridiculous. The true aficionado, or general watch fan knows better, and the newbies/wannabes don’t have a clue.

[Chris]

Originally Posted by Jack T

The premise of this thread is nonsense; what conceivable reason would anyone have for wondering is Rolex will be alright after some theoretical, yet to be realized downturn. All the hype, the soaring grey market prices, the voracious demand hasn’t really done all that much for Rolex’s bottom line. They sell all their watches at wholesale prices to their AD distributors, just like they have for 100 years. Maybe an occasional price increase here and there, but that’s about it.

And about having a place among the so called holy trinity? Don’t be ridiculous. The true aficionado, or general watch fan knows better, and the newbies/wannabes don’t have a clue.

[inadeje]

Originally Posted by Jack T

The premise of this thread is nonsense; what conceivable reason would anyone have for wondering is Rolex will be alright after some theoretical, yet to be realized downturn. All the hype, the soaring grey market prices, the voracious demand hasn’t really done all that much for Rolex’s bottom line. They sell all their watches at wholesale prices to their AD distributors, just like they have for 100 years. Maybe an occasional price increase here and there, but that’s about it.

And about having a place among the so called holy trinity? Don’t be ridiculous. The true aficionado, or general watch fan knows better, and the newbies/wannabes don’t have a clue.

I plead the 1st and 14th Amendments simultaneously

[Time Out]

Originally Posted by SubMillennial

No pity for the bagholders. But my scorn will be reserved for the petty tyrant sales associates who act like they are god's gift for selling you a Datejust and treat any prospective buyers like trash

Ohhhhhhhhhhhhh yeessssssssssss...

Every dog has its day and the sun has set on SA's.

[RolexNewbie23]

I'm about to purchase an entry level Rolex and I'm grateful to see this info!! Thanks for sharing!