SUBMARINER DATE 1973-2010 = 8.3% increase/YR

[BQueenan]

According to http://www.watchmasters.net/the-role...-wilsdorf.html

"Hans Wilsdorf's passion in life was his Rolex watch. He intended his watch to make the world a better place, through its uses, its accuracy and its beauty. He wanted his watch to be considered a symbol of achievement, not a symbol of status and became agitated if it was referred to as such. His watch was priced just out of reach of the middle-class man meaning, to earn one, one would have to contribute a bit more, work a little harder and reach a bit farther. A Rolex watch is generally significant of a major achievement in its wearer's life".

If true, the way the prices are increasing at a greater rate than either inflation or average salaries, means the modern company has lost sight of this simple goal. It was also one of the things that I admired about the brand (in conjunction with the charitable foundation).

[gimpex]

Originally Posted by BQueenan

According to http://www.watchmasters.net/the-role...-wilsdorf.html

"Hans Wilsdorf's passion in life was his Rolex watch. He intended his watch to make the world a better place, through its uses, its accuracy and its beauty. He wanted his watch to be considered a symbol of achievement, not a symbol of status and became agitated if it was referred to as such. His watch was priced just out of reach of the middle-class man meaning, to earn one, one would have to contribute a bit more, work a little harder and reach a bit farther. A Rolex watch is generally significant of a major achievement in its wearer's life".

If true, the way the prices are increasing at a greater rate than either inflation or average salaries, means the modern company has lost sight of this simple goal. It was also one of the things that I admired about the brand (in conjunction with the charitable foundation).

Pretty much fits

Symbol of achievement - tick
not a symbol of status - tick , there is other watches which do that better
priced out of middle class - tick , not everyone would get it even if they can theoratically afford it
work little harder etc - tick although all subjective
major achievement - tick . its a major achievement if you manage to get one

[chstoft]

Wow, interesting figures! Thx

[tulsaokusa]

Originally Posted by gimpex

Pretty much fits

Symbol of achievement - tick
not a symbol of status - tick , there is other watches which do that better
priced out of middle class - tick , not everyone would get it even if they can theoratically afford it
work little harder etc - tick although all subjective
major achievement - tick . its a major achievement if you manage to get one

All points above - tick

[aqa16610]

You know guys.. i think no matter how much you pay for a Rolex Sub ..at the end it is worth it;)

[moby33]

Originally Posted by Joey_V

If a SS Sub costs more than 10K in the future.... that is nuts. If it costs over 20K, I am never buying one again.

Then I guess a new SS Sub will be nuts in your eyes in less than 15 yrs time. Just assuming Rolex adjusts per average inflation, in a little under 15 yrs the watch will be over $10K. It's not if, just a matter of when. My guess: It will be at $10K+ in much less time than 15 yrs. There's always Tag...

[steubi1]

The time to buy a Sub is now, because in 20 years, nobody will wear mechanical watches anymore....

It's the last chance to get one!

Interesting figures BTW.

Tom

[16grandrolex]

well, I heard that people's salaries were also a lot lower back in the seventies. Say five grand was an average salary per year for a e.g. teacher or something.

[DJF881]

What you're seeing is a global boom in luxury goods in the 2000s. You'd see the same trend with Kiton suits or Louis Vuitton handbags. This is partially the consequence of the disproportionately-rising salaries of upper-level executives and the financial industry during the corresponding decade. The financial industry expanded tremendously during this decade as a percentage of US and EU GDP, and executive comp had a period of unprecedented expansion, both in absolute terms, and in terms relative to mean income.

Rolex has also been trying to position itself further up-market, and it's been doing so by racheting up prices, and trying to justify the new costs, somewhat, with the ceramic makeover.

Luxury goods focus on being scarce and somewhat exclusive, so when these companies see a spike in demand, they'll raise prices rather than increasing output. Rolex's price increases are natural in a market where the PPs and VCs were putting out $250k watches with ridiculous, useless complications to sell to guys who buy yachts and airplanes.

High-end products that are not considered luxury goods, like flat panel televisions, higher-end computers, upper-midlevel cars like Lexus, and food prices have not seen similar levels of inflation.

[powerfade]

Originally Posted by bayerische

This continuing would make the sub $12.500 in 2016. IMHO it's too much

I find it interesting that someone would consider $12,500 too much but think that i.e. $4500 is 'not too much'. Isn't a Rolex like other high end luxury items in that its pricing doesn't have anything to do with the 'usual' cost of manufacture/retail price ratio?

I read yesterday that Rolex is producing 2000 watches per day. Can someone confirm that? That is way higher than I would have guessed.

[tulsaokusa]

Originally Posted by 16grandrolex

well, I heard that people's salaries were also a lot lower back in the seventies. Say five grand was an average salary per year for a e.g. teacher or something.

1973 $7,580.16 - National Average Wage Index, USD

[tulsaokusa]

Originally Posted by powerfade

I find it interesting that someone would consider $12,500 too much but think that i.e. $4500 is 'not too much'. Isn't a Rolex like other high end luxury items in that its pricing doesn't have anything to do with the 'usual' cost of manufacture/retail price ratio?

I read yesterday that Rolex is producing 2000 watches per day. Can someone confirm that? That is way higher than I would have guessed.

Based on what I have read, that would be a minimum of 2000 watches/day.

[hhh007]

Originally Posted by Scandinavian

Can anybody tell me, when was the last time the prices of Rolex went down?

Ummm, the second you walk out of the AD with your new purchase.


People aren't seriously talking about buying a new Rolex as a future investment....are they??

[tulsaokusa]

Originally Posted by hhh007

People aren't seriously talking about buying a new Rolex as a future investment....are they??

The logic/argument/intent of this post is to stress the financial benefits of purchasing a Rolex ASAP (if one is in the financial position to do so), as opposed to waiting several years. The data supports the wisdom in purchasing a Rolex now. Later will potentially hurt your wallet more.

Something like that...



ASAP= somewhere between now and the next official price increase

[azkri]

Originally Posted by Maxtor

Based on your data I think the time to buy a Sub was 1973.

[azkri]

Originally Posted by Mockingbird

I'd rather buy in 1954.

Agree, but I can't get a 1973 model in 1954.....or could I?

[jeremyam]

Originally Posted by jason.mobi

Some of you SUB owners might find these #s of interest...


STAINLESS SUBMARINER DATE
retail price

1973 $385
1975 $470
1977 $585
1978 $875
1980 $950
1982 $1175
1984 $1325
1986 $1575
1988 $1975
1989 $2500
1992 $2850
1996 $3350
2004 $4250
2005 $4525
2006 $5175
2008 $5850
2009 $6000
2010 $7250
2010 $7375

8.3% AVG INCREASE PER YEAR
(since 1973)


PROJECTIONS
(based upon 8.3% historical average annual increase)

2015 $10987 [in 5 years]
2020 $16369 [in 10 years]
2025 $24388 [in 15 years]
2030 $36335 [in 20 years]

On a personal note, I think the time to buy a SubC is now.


Cheers...

Interesting and insightful. I'm curious about a couple of things, these items would help me better understand, as well as others, hopefully, the likely outcomes.

First, I was wondering your source. Secondly, are these inflation adjusted?

It reads like a prospectus, so I was wondering where the footnotes were:)

Thanks,

[jeremyam]

Originally Posted by DJF881

What you're seeing is a global boom in luxury goods in the 2000s. You'd see the same trend with Kiton suits or Louis Vuitton handbags. This is partially the consequence of the disproportionately-rising salaries of upper-level executives and the financial industry during the corresponding decade. The financial industry expanded tremendously during this decade as a percentage of US and EU GDP, and executive comp had a period of unprecedented expansion, both in absolute terms, and in terms relative to mean income.

Rolex has also been trying to position itself further up-market, and it's been doing so by racheting up prices, and trying to justify the new costs, somewhat, with the ceramic makeover.

Luxury goods focus on being scarce and somewhat exclusive, so when these companies see a spike in demand, they'll raise prices rather than increasing output. Rolex's price increases are natural in a market where the PPs and VCs were putting out $250k watches with ridiculous, useless complications to sell to guys who buy yachts and airplanes.

High-end products that are not considered luxury goods, like flat panel televisions, higher-end computers, upper-midlevel cars like Lexus, and food prices have not seen similar levels of inflation.

Thanks for the comments. You incorrectly attribute the boom in sales of luxury items witnessed in the 2000's to executive compensation and the financial industry. I would assert that this was just a small part. Why not mention the emerging market in China? What about all those who had stock and realized capital gains who bought luxury items? What about those who leverage their homes for cold hard cash? The continuation of overspending and little savings? Exec comp played a far smaller role than you think.

Your second paragraph:
"Rolex has also been trying to position itself further up-market, and it's been doing so by racheting up prices, and trying to justify the new costs, somewhat, with the ceramic makeover." - So for all those years prior to the release of ceramic, Rolex had what most would consider a model. You speak in business lingo so you must be familiar with a business model. Rolex has a business model where products increase with price frequently, like a schedule, this has been going on for a long time and has nothing to do with executive compensation more with protecting a brand and its customers.

we're dealing with supply and demand and one company's rather unique model to raise prices each year. salaries from those in the financial service industry, i work in wealth management, is sometimes high, those getting paid the big $$$ are few and far between. the pay distribution actually looks a lot like that across the US spectrum, with the top 10 percent getting 80 percent of the money set aside for salaries. there are top folks at my bank that make in a day what i make in a year... there are lots of folks like me, not so many like them.

the ability to purchase luxury items, i would consider a lexus a luxury item, is linked to liquidity and credit- of which both, have had a rough go recently. people lived beyond their means, this includes wealth bankers, ibankers, brokers, traders.....

[tulsaokusa]

Originally Posted by jeremyam

Interesting and insightful. I'm curious about a couple of things, these items would help me better understand, as well as others, hopefully, the likely outcomes.

First, I was wondering your source. Secondly, are these inflation adjusted?

It reads like a prospectus, so I was wondering where the footnotes were:)

Thanks,

Hi Jeremy... great questions...

Inflationary adjusted?

No.

The 2004-2010 numbers I pretty much knew from memory, as I'm quite sure most Sub owners on this forum would as well. For the 1973-1996 numbers, I consulted some historical ads as well as this link to help confirm such...

http://www.minus4plus6.com/PriceEvolution.htm

...thus far, all of the numbers have been spot-on accurate. If there are any retail prices listed that are incorrect... I'm sure TRF will speak up.

[tulsaokusa]

Originally Posted by jeremyam

Thanks for the comments. You incorrectly attribute the boom in sales of luxury items witnessed in the 2000's to executive compensation and the financial industry. I would assert that this was just a small part. Why not mention the emerging market in China? What about all those who had stock and realized capital gains who bought luxury items? What about those who leverage their homes for cold hard cash? The continuation of overspending and little savings? Exec comp played a far smaller role than you think.

Your second paragraph:
"Rolex has also been trying to position itself further up-market, and it's been doing so by racheting up prices, and trying to justify the new costs, somewhat, with the ceramic makeover." - So for all those years prior to the release of ceramic, Rolex had what most would consider a model. You speak in business lingo so you must be familiar with a business model. Rolex has a business model where products increase with price frequently, like a schedule, this has been going on for a long time and has nothing to do with executive compensation more with protecting a brand and its customers.

we're dealing with supply and demand and one company's rather unique model to raise prices each year. salaries from those in the financial service industry, i work in wealth management, is sometimes high, those getting paid the big $$$ are few and far between. the pay distribution actually looks a lot like that across the US spectrum, with the top 10 percent getting 80 percent of the money set aside for salaries. there are top folks at my bank that make in a day what i make in a year... there are lots of folks like me, not so many like them.

the ability to purchase luxury items, i would consider a lexus a luxury item, is linked to liquidity and credit- of which both, have had a rough go recently. people lived beyond their means, this includes wealth bankers, ibankers, brokers, traders.....

[jeremyam]

Originally Posted by jason.mobi

Hi Jeremy... great questions...

Inflationary adjusted?

No.

The 2004-2010 numbers I pretty much knew from memory, as I'm quite sure most Sub owners on this forum would as well. For the 1973-1996 numbers, I consulted some historical ads as well as this link to help confirm such...

http://www.minus4plus6.com/PriceEvolution.htm

...thus far, all of the numbers have been spot-on accurate. If there are any retail prices listed that are incorrect... I'm sure TRF will speak up.

sorry, i'm a numbers dork, so, that's great to see. thanks for the research and sharing your findings. of course, these are retail prices and not secondary market. do you think if you did this for secondary market the numbers would be similar, +/- 2 or 3 percent? this would help us better determine value of watches we currently own, subs in this case. appreciate this. worthwhile read and something to ponder.

[Jason101]

Wow! Thanks a lot, Jason.Mobi for this interesting table and for taking time to gather the figures. Very interesting indeed.

[Jannal]

Originally Posted by faingator

Wow! The price for a Sub Date has gone through the roof. The time to buy is now. Perhaps a pre-owned 16610. They probably give the best bang for the buck.

[Darlinboy]

Originally Posted by jason.mobi

Some of you SUB owners might find these #s of interest...


STAINLESS SUBMARINER DATE
retail price

1973 $385
1975 $470
1977 $585
1978 $875
1980 $950
1982 $1175
1984 $1325
1986 $1575
1988 $1975
1989 $2500
1992 $2850
1996 $3350
2004 $4250
2005 $4525
2006 $5175
2008 $5850
2009 $6000
2010 $7250
2010 $7375

8.3% AVG INCREASE PER YEAR
(since 1973)


PROJECTIONS
(based upon 8.3% historical average annual increase)

2015 $10987 [in 5 years]
2020 $16369 [in 10 years]
2025 $24388 [in 15 years]
2030 $36335 [in 20 years]

On a personal note, I think the time to buy a SubC is now.


Cheers...

Compared to average US earnings:
Year Index Sub Price % of income
1973 $7,580 $385 5.08%
1975 $8,631 $470 5.45%
1977 $9,779 $585 5.98%
1978 $10,556 $875 8.29%
1980 $12,513 $950 7.59%
1982 $14,531 $1,175 8.09%
1984 $16,135 $1,325 8.21%
1986 $17,322 $1,575 9.09%
1988 $19,334 $1,975 10.22%
1989 $20,100 $2,500 12.44%
1992 $22,935 $2,850 12.43%
1996 $25,914 $3,350 12.93%
2003 $34,065 $4,250 12.48%
2005 $36,953 $4,525 12.25%
2006 $38,651 $5,175 13.39%
2008 $41,335 $5,850 14.15%
2009 $40,712 $6,000 14.74%

Costs around 3X as much based on average earnings... and rising.

[travisb]

Glad I've already got mine and it's never leaving my collection.

[Strut99GT]

Originally Posted by Darlinboy

Costs around 3X as much based on average earnings... and rising.

That is obscene!

[Watch Professor]

Better return on a Rolex Sub Date than the stock market. Maybe I'll sell some stocks and buy another watch.

[karmatp]

Originally Posted by Evergreen

I tried on the new Sub C today. It was over 7K. The salesman said the large price increase was due to the ceramic bezel and the new glide lock clasp. It was an amazing watch, however I wish it was in the 5k range.

So true. I used to walk out of my local AD with Rolex sport watches for well under $4000, now they are just getting to steep for me. I did buy the new Sub C though, mainly because it destroys all those old models I used to walk out with. This is my last Rolex purchase, it was the most expensive but I will keep it for the rest of my life, then it will be my boy's watch.

If Rolex sport watches were still in the $3's or $4's, I would buy more, but the price they are at now, I will buy Panerai, Omega or Breitling to mix it up and not break the bank.

[Rebel]

Wow.

[paddy_crow]

For me, the time to buy a SubC is...

Never.