Rolex prices won’t decrease with a global crisis

[TankTom]

Originally Posted by terrywoods

Family is more important than ever in times like this

Most people won’t care about a watch in this crisis

What ever your wealth is this the time to buy when others around you are losing everything

This makes no sense. How does buying a watch make any difference to people out there who are losing their jobs? Should we all live miserable lives even if we don’t need to just because some people are losing their jobs?

[TankTom]

I love it how people come out with claims such as ‘family is most important’ and expect to be hailed as the next Martin Luther king. Thanks for stating the obvious to us all.

[MTdweller]

Originally Posted by NYG1121

Everything goes down in this sort of downturn. Stocks, real estate.. basically anything that is valuable except cash. For all of these assets, don’t sell unless you have to. Ride it out and you will come out ahead

Agreed.

[ap1]

Originally Posted by Rori

Wait and see.
PS: this crisis is not a normal one, this is unprecedented and so the graph will be.


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Correct. Your 30 years of history don’t really include this black swan event

[Calatrava r]

Originally Posted by peterpl

Problem with your analysis is that NEVER in the past have basic SS models demanded such premiums and its pretty much across the entire board.

Yes the market for Rolex wont drop to $2000 a piece but the ludacris premiums for hyped models will 100000% come down.

Agree. However, how much they drop really depends on the supply chain and Rolex's desire to maintain the scarcity of certain models.

[Michael V]

Originally Posted by dmash

What are you thinking? I think $14-15k

I just see too much support after it gets there, I think the $10k estimates are quite extreme

I have heard estimates it will fall to 7k. I will be investing heavily at that point.

[dmash]

Originally Posted by Michael V

I have heard estimates it will fall to 7k. I will be investing heavily at that point.

That’s backtracking over 20 years, I don’t think that’s really even possible without the country collapsing. Not just a recession, but a literal collapse.

I already invested a bit at 20k/30% drop and think I shot too soon. I’ll tier another buy if we get to $15k, if we go below that I’ll just have to ride it out and hope for the best.

[No SUBctitute]

Originally Posted by Valedictorian

the price delta between grey and MSRP will narrow down (as happened during the financial crisis almost a decade ago) but is still likely to remain several thousands of dollars above retail.

The sub grey makes price has always been above MSRP? I don't think so. The VAST majority of references' grey market prices have been below MSRP.

Originally Posted by socalwatchcollector

The watch market has never collapsed and never will. It's a luxury item.

Are you sure? Supercars take a hit during bad economic times.

Originally Posted by Cwillis0001

I just want a brand new Submariner for my 40th birthday. I guess I'm just one of those old school pre-craze style customers, the kind that always wanted a Rolex as a gift to himself that will be kept forever.

Now is the time to beat the bushes and see if you can score one! Good luck!

[Roger Lococco]

Originally Posted by dmash

That’s backtracking over 20 years, I don’t think that’s really even possible without the country collapsing. Not just a recession, but a literal collapse.

I already invested a bit at 20k/30% drop and think I shot too soon. I’ll tier another buy if we get to $15k, if we go below that I’ll just have to ride it out and hope for the best.

Did the same thing. Put in a bunch of my cash at 30% down - my original pre-virus strategy was to average down at 10%, 20%, and 30%, but the virus risk made me rethink that. It will probably go lower, but you're never going to catch it at the exact bottom.

[dmash]

Originally Posted by Roger Lococco

Did the same thing. Put in a bunch of my cash at 30% down - my original pre-virus strategy was to average down at 10%, 20%, and 30%, but the virus risk made me rethink that. It will probably go lower, but you're never going to catch it at the exact bottom.

I’m not a financial guru by any means, but some friends a lot smarter than me advised me this way. $14k would have us at the same % down as the 2008 crisis, and they were all in agreement that there’s going to be a ton of support there, even with a horrible market.

I’ll invest the rest of my money when it goes down $5k or up $5k either one. I’ll be happy in a few years either way.

[jaychief]

Everything goes down in this sort of downturn. Stocks, real estate.. basically anything that is valuable except cash. For all of these assets, don’t sell unless you have to. Ride it out and you will come out ahead

THIS...........

[904VT]

Originally Posted by Valedictorian

Hello everyone

I saw a few posts speculating that grey market prices for Rolex watches might decrease over time and I wanted to share a representative graph that may convince you of the opposite. Historically, prices have stalled during the 2008-2009 financial crisis but kept climbing steadily afterwards. There are no dips in the time series (as opposed to Patek, which did correct their already exuberant MSRP downwards, but that’s a story for another time).

That being said, I’m aware the blue line in this chart only displays the MSRP of the (then) most popular SS model (i.e. Sub ND) but the point is that grey market dealers closely monitor this data on an almost daily basis, in combination with the prevalent market demand, to set their ludicrous prices.

Even when market demand slows down, the price delta between grey and MSRP will narrow down (as happened during the financial crisis almost a decade ago) but is still likely to remain several thousands of dollars above retail. Case in point is the new BLNR. When it first came out, some grey market dealers listed them for USD 23k in the first few weeks. However, they quickly corrected their asking price to a level below that of the BLRO when they realized the latter was still more desirable. The fact that the Rolex manufacture has now closed down until further notice won’t help from an availability standpoint either.

In summary, I agree with some of the views that I have read around here about the probability of grey market dealers to adopt a strategy of hoarding the sought-after SS pieces for better days, both to keep their already (or so-called?) modest profit levels intact as well as to avoid sending out the - in their views at least - wrong signal that market demand is on the verge of collapsing.

Data chart courtesy of ablogtowatch.com

One comment from my perspective is that Rolex was introducing new 6 digit models during the last crisis in 08-09 and recovery, so that must be taken into consideration. New models allow Rolex to take supply to a slow drip and why you then saw secondary prices align. New models reinvigorate demand. We’ll see what Rolex has in mind but imo they will be just fine with another introduction looming, the 126610

The days of GMT Masters in the $15k-$20k range is done though imo. Only room for Daytonas and Sky Ds in an allocation product strategy for the long-term.

[socalwatchcollector]

[QUOTE=No SUBctitute;10476310



Are you sure? Supercars take a hit during bad economic times.


I agree with you on the cars but as a watch collector for the past 30 years I am confident with my statement. Patek, AP, and Rolex aren't going anywhere. You may be able to get really good deals when all the dust settles but you will always have your money there. For example- They aren't going to be selling 6 digit submariners for $4k or $5k. I could see them drop to 7k again on the grey market but if you bought at MSRP on most of those 3 brands you will be fine. Some may argue this but watches are not investments. I personally don't care if my watches lose or gain a few thousand. I buy them because it's a hobby and I enjoy them as should others IMO

[kieselguhr]

Originally Posted by socalwatchcollector

I personally don't care if my watches lose or gain a few thousand. I buy them because it's a hobby and I enjoy them as should others IMO

People who just got into watches within the past couple years are likely associating watches with value proposition. They are either naive or vaguely aware of a time when luxury watches, even Rolex professional models largely exchanged hands at 30-40% below MSRP for years. I suspect the reason for anticipating massive market value drop in Rolex watches is because of a presumed opportunity to profit in the near future. I cannot imagine any other reason why anyone would drop money on watches considering the current situation otherwise.

I understand your sentiment as I too believe that watches should just be enjoyed instead of hawked around as a form of commodity but this pastime has become more of an avocation these days.

[socalwatchcollector]

Originally Posted by kieselguhr

People who just got into watches within the past couple years are likely associating watches with value proposition. They are either naive or vaguely aware of a time when luxury watches, even Rolex largely exchanged hands at 30-40% below MSRP for years. I suspect the reason for anticipating massive market value drop in Rolex watches is because of a presumed opportunity to profit in the near future. I cannot imagine any other reason why anyone would drop money on watches considering the current situation otherwise.

I understand your sentiment as I too believe that watches should just be enjoyed instead of hawked around as a form of commodity but this pastime has become more of an avocation these days.

+1 I don't understand why people are wanting to buy a watch and take a risk that they may make a few thousand on at best. These are mass produced watches that most talk about on here. It's more work and risk than it's worth. Would be wiser to just enjoy the watch and use that time to focus on other more profitable ventures. IMO.

[dmash]

[QUOTE=socalwatchcollector;10476415][QUOTE=No SUBctitute;10476310



Are you sure? Supercars take a hit during bad economic times.


I agree with you on the cars but as a watch collector for the past 30 years I am confident with my statement. Patek, AP, and Rolex aren't going anywhere. You may be able to get really good deals when all the dust settles but you will always have your money there. For example- They aren't going to be selling 6 digit submariners for $4k or $5k. I could see them drop to 7k again on the grey market but if you bought at MSRP on most of those 3 brands you will be fine. Some may argue this but watches are not investments. I personally don't care if my watches lose or gain a few thousand. I buy them because it's a hobby and I enjoy them as should others IMO [/QUOTE]

Nobody is saying that. Everybody is only arguing against ‘will they be MSRP/slightly under or stay inflated’. Not a single poster on this board thinks a new sub will sell for 50% under retail or something ludicrous

[dmash]

Originally Posted by kieselguhr

People who just got into watches within the past couple years are likely associating watches with value proposition. They are either naive or vaguely aware of a time when luxury watches, even Rolex professional models largely exchanged hands at 30-40% below MSRP for years. I suspect the reason for anticipating massive market value drop in Rolex watches is because of a presumed opportunity to profit in the near future. I cannot imagine any other reason why anyone would drop money on watches considering the current situation otherwise.

I understand your sentiment as I too believe that watches should just be enjoyed instead of hawked around as a form of commodity but this pastime has become more of an avocation these days.

10000% agree.

And we’re not discussing twenty years ago, this was as recent as 5 years ago. Lol a black sub? I didn’t even try and could get 15% off.

[terrywoods]

Originally Posted by TankTom

This makes no sense. How does buying a watch make any difference to people out there who are losing their jobs? Should we all live miserable lives even if we don’t need to just because some people are losing their jobs?

I’m entitled my own opinion just as you are

It’s more than people losing jobs if you’ve not watched the news

[bonovox]

I must be old. I lived through the dot com bubble and 2008. If you think Rolex prices aren't heading under retail at a theater near you soon, well, keep hoping. Sure, wealthy people won't sell, but an entirely different demographic of watch owner will start to sell soon and that will create an avalanche of supply with unequaled demand.

[GB-man]

Originally Posted by bonovox

I must be old. I lived through the dot com bubble and 2008. If you think Rolex prices aren't heading under retail at a theater near you soon, well, keep hoping. Sure, wealthy people won't sell, but an entirely different demographic of watch owner will start to sell soon and that will create an avalanche of supply with unequaled demand.

While I agree generally that hardly qualifies you as old

21 year olds have as well

[georgekart]

There are so many factors right now that we don't know what's going to happen. Rolex could close factories until the end of the year, decreasing the supply. Assuming the demand is not cut by a factor of 10, the prices will keep going up. But at the same time, many businesses may close down if the quarantine continues for half a year. Thus lowering the demand drastically. So many factors at play that we don't know. Maybe in a month, this will all be basically almost fully in the past in terms of the amount of infected people and all the economy will be back to normal soon, so the prices will fall a bit shortly, but then start going up and catch up with current prices in a couple more months. I think if anyone of us knew with 100% certainty what would happen and how, he wouldn't be speculating what'll happen now and will make a lot of money by the time this blows over.

[Yess]

Originally Posted by terrywoods

Family is more important than ever in times like this

Most people won’t care about a watch in this crisis

What ever your wealth is this the time to buy when others around you are losing everything

Yes - in fact I would argue that there is no better time.

The reason some are losing everything, partly, is because people aren't buying. While I fully appreciate that governments have shut down stores, many continue to operate online.

Now is the time to buy as much as you can afford to keep businesses open and to lessen the terrible loss of jobs. I encourage you all, if it is within your means, to continue buying products, and support your local grocery stores, and restaurants, and local shops - many of who will still deliver even though their storefront is closed.

If you can afford to buy a watch, buy it - don't flaunt it, but your watch purchase may mean that seller gets to pay their mortgage for another month and that might be enough to get them through to the other side of this. It applies to everything and anything in these hard times - not just watches!

[Bosscheto]

Originally Posted by georgekart

There are so many factors right now that we don't know what's going to happen. Rolex could close factories until the end of the year, decreasing the supply. Assuming the demand is not cut by a factor of 10, the prices will keep going up. But at the same time, many businesses may close down if the quarantine continues for half a year. Thus lowering the demand drastically. So many factors at play that we don't know. Maybe in a month, this will all be basically almost fully in the past in terms of the amount of infected people and all the economy will be back to normal soon, so the prices will fall a bit shortly, but then start going up and catch up with current prices in a couple more months. I think if anyone of us knew with 100% certainty what would happen and how, he wouldn't be speculating what'll happen now and will make a lot of money by the time this blows over.

It takes 6-8 weeks per continent. Europe has not peaked yet, US are behind. So now China is clean, but cannot do much business with the rest of the world, not to get infected. When Europe is clean in 8 weeks (super optimistic) US will not be clean, so we cannot do business with them. Do this in watches, so Rolex will wipe massive chunks of its revenues, keep the same fixed cost - salaries, R&D etc, not have the cash from the useless Baselworld and keep the same strategy??? And also, sell watches to people who lack money, and the least of their worries is watches.

Let's be honest, flipping is over.

[Xerxes77]

I think from start we must separate Rolex buyers in Watch lovers and Watch flippers.
Around 5 years ago people buy a watch because they love that watch or to celebrate something or for what reason you want...... but from 2018 I saw only people who are interestedof the value of the watch when they want to sell it or only interested how much they will make easy money if they sell the watch.
In this condition mostly AD start to speculate the moment and also start to decide who can get a “hot” watch and who not. Unfortunately most AD decide to sell the “hot” watch only to big spenders and also they start a business relation with grey market.
I hope they don’t think we are all stupid when they tell us how hard they receive watch from Rolex and how long it’s the waiting list when we see post on social media with grey dealers who have 10 Hulk, 20 Pepsi, 10 Daytona......
In this condition we(the watch lovers) need to stay and listen from Rolex AD what model watch we can buy and what model watch can’t buying because are very “hot”!
So, from the beginning in my humble opinion the demand for Rolex watch will remain buy will buy at MRSP the “hot” pieces and rest of the models with discounts.
Why? Because if that lists existed now 60% on the people on the list will not buy because not have where to sell and other because this situation who will make the customer to think twice when buy a luxury watch!
Also Rolex it’s a luxury watch but remain an affordable watch for many customers because the MRSP price it’s fair and you receive a very good luxury watch for a decent price.
Unfortunately we can’t predict what will be 3 or 5 mouths from now. Maybe the demand will be higher or maybe the demand will go down and the grey market not sell the watch who they have in stock and AD will start to give a call to real customers.
But what must be taken care because like I read on previous post the situation it’s bad and will be months till we defeat Covid-19.
I am doctor specialist in Public Health and believe me I know what I talk about. This situation will be in control in my opinion in best scenario around October. Yes will be periods without many numbers of cases but the fight with coronavirus it’s long and far to be finished.
We must forget what happened in the past.
All in all I think the watch market will be healthy again!
IMO

[ndrs63]

It all depends on how deep the recession/depression will be. With a GDP shrinking at 30% rate I doubt your theory holds. Rolex can certainly scale back production, however, just like other companies, will have to keep around its resources or risk losing valuable skills. Keeping the lights on requires production of a number of pieces, including the “unicorns”, as they also need to stay ahead of the competition. Not to mention R&D, which involves high costs.
Just my 2 cents


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[T-Bag]

I have bigger worries than the Rolex market but it’s a nice diversion. I expect the stock market to drop below 15k under the best of circumstances.I literally almost bought a black SkyDweller about three weeks ago at $19k. I would have resented that watch for the rest of my life. Hard to bond with a watch that you lost thousands on even if you love it. Close call

[YYZed]

Originally Posted by Xerxes77

I think from start we must separate Rolex buyers in Watch lovers and Watch flippers.
IMO

At least in the US, there's also a subcategory of materialists (watches, cars... I'm looking at you SoCal) that majorly overextend during times of prosperity. Consumer debt here is off the charts. 72-80 month car loans at 6% are not uncommon here. Many who have no business spending $9k+ on a watch have bought Rolex with the mindset they deserve "the best" and, "Hey, I could always sell it for a profit in a pinch. I can't lose."

If this economic course is protracted, I can't imagine Rolex would be unscathed. They're luxury timepieces that some argue are overpriced at MSRP.

[GGGMT]

Originally Posted by bonovox

I must be old. I lived through the dot com bubble and 2008. If you think Rolex prices aren't heading under retail at a theater near you soon, well, keep hoping. Sure, wealthy people won't sell, but an entirely different demographic of watch owner will start to sell soon and that will create an avalanche of supply with unequaled demand.

Well said. I feel like you and I are a couple of boomers on this forum!


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[mmaggi]

Certain models (be it Rolex or non-Rolex) will fall in price. No question.

Will a used BLNR come down to MSRP of a new one? I don't know. It remains to be seen.

[newu5er]

Originally Posted by YYZed

At least in the US, there's also a subcategory of materialists (watches, cars... I'm looking at you SoCal) that majorly overextend during times of prosperity. Consumer debt here is off the charts. 72-80 month car loans at 6% are not uncommon here. Many who have no business spending $9k+ on a watch have bought Rolex with the mindset they deserve "the best" and, "Hey, I could always sell it for a profit in a pinch. I can't lose."

If this economic course is protracted, I can't imagine Rolex would be unscathed. They're luxury timepieces that some argue are overpriced at MSRP.

This is what I've been saying. There are levels to everything and some folks play when they shouldn't. But hey, if your mortgage is 50% of your take home and you have a 72% on your car, seems like the next step in disaster is to pick up a Rolex because like you said, they deserve it.