Insanity! Where does it stop?

[Mendota]

Originally Posted by SubMillennial

these aren't end users buying these, just resellers from other resellers

That is exactly what fueled the tulip mania. It was resellers buying tulip options, not even the actual bulbs because they hadn't even been grown yet. The banks were lending on the tulip options, so resellers would buy the tulip options and levered themselves up 10:1. Then they would turn around and sell the option to another flipper. The original party then paid back their loan and kept the profit. The next party had often times already gone to the same bank and levered up 10:1 themselves for that same option, so they had to find a 3rd party now to sell to, repay the loan, and walk away with profit. Sometimes the same option traded hands 10 times in a single day, with all of the buyers using 10:1 leverage and scalping profits each time. It wasn't until the first bank saw this and said no, we are taking away the leverage, that the rest of the banks also took away the leverage and the music stopped playing.

On top of that everyone couldn't conduct their normal, routine businesses because the Black Plague was sweeping through Europe at the time and Holland was getting hit. The Black Plague virus pandemic created a situation of easy money with the banks and bored/desperate merchants, all wanting to trade and make easy profits with these tulip options.

To quote the venerable Yogi Berra, it's Deja Vu all over again!

[Xerxes77]

We discuss nothing here…..till people rich or not will pay the price on grey market craziness never stop……

[Atone]

Originally Posted by Pw92676

Mods: seriously can a sub forum be made for threads like this. It’s becoming cumbersome to find five of these then finally a thread with pics and watch info.

Nothing wrong with this speculation/investment talk, but that’s not what TRF what it is. It’s a disservice to this fine forum to morph into <insert another less-fun forum name here>.

this is the first time in many moons i've headed into the rolex sub-forum. i see i haven't missed anything. back to general discussion . . . lol

[garyk]

Originally Posted by JohnGingerwood

I just don't understand why people that can spend that much on a steel watch do not get gold.

Totally. I will never understand this.

[Sothy]

Originally Posted by absoluteczech

Ask someone that bought a house in 2007/8 the same question. It goes up until it doesn't.

Are houses cheaper in SoCal now than they were in 07/08? I’m not from there, but I was under the impression that they’re much more expensive now than even back then? I can totally see watch prices decreasing in the (near) future for several years. But 10 years after that? I’m not so sure. Who knows of course, but although many of us would have preferred to have gotten a house in 2010 vs 2008, 2008 prices are still lower than 2021 prices where I am from. But watches aren’t houses, hence why I have no idea what will happen...

[rolexperfect]

insanity? did you see how the green 5711 is worth 10x MSRP? why should the Daytona stop raising then?

[swish77]

Originally Posted by JohnGingerwood

I just dont understand why people that can spend that much on a steel watch do not get gold.

The material from which a watch is made is irrelevant. We're not dealing in gold bars or bulk stainless steel. They are very different watches in SS or gold, and each have their own and different appeal based on design, feel and weight, among other details.

Also, I'll point out that an all-gold Daytona is about $20K more on the secondary market, give or take a grand or two.

[BillA]

Very often on this forum topics do repeat.
They repeat because of recent experience when one shops for a watch or something just comes to mind.
For the intolerant and people who find these threads repetitive….move on, you have nothing to add to this thread.

[teck21]

Originally Posted by Jmbarrack

This is exactly it. For more than you think, a 40k Daytona is a drop in the bucket for them. Now with the rise in it's popularity, it's just being brought to their attention and they're buying these pieces without so much of a care in the world.

The fast rise of crypto millionaires is also a major cause. Many at this point are playing with house money --- For them, this is just another lower-risk asset class to park money in.

It is easy and fun to attribute it to the new crypto rich.

It is worth remembering though that they represent only a tiny fraction of the world’s financial assets, and held by an even smaller fraction of the world’s population.

The true driver of mass wealth has always been, and will always be real estate.


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[teck21]

Originally Posted by SubMillennial

these aren't end users buying these, just resellers from other resellers

So the resellers from other resellers sell them to yet other resellers?

After that?

What a stupid argument.


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[teck21]

Originally Posted by Mendota

That is exactly what fueled the tulip mania. It was resellers buying tulip options, not even the actual bulbs because they hadn't even been grown yet. The banks were lending on the tulip options, so resellers would buy the tulip options and levered themselves up 10:1. Then they would turn around and sell the option to another flipper. The original party then paid back their loan and kept the profit. The next party had often times already gone to the same bank and levered up 10:1 themselves for that same option, so they had to find a 3rd party now to sell to, repay the loan, and walk away with profit. Sometimes the same option traded hands 10 times in a single day, with all of the buyers using 10:1 leverage and scalping profits each time. It wasn't until the first bank saw this and said no, we are taking away the leverage, that the rest of the banks also took away the leverage and the music stopped playing.

On top of that everyone couldn't conduct their normal, routine businesses because the Black Plague was sweeping through Europe at the time and Holland was getting hit. The Black Plague virus pandemic created a situation of easy money with the banks and bored/desperate merchants, all wanting to trade and make easy profits with these tulip options.

To quote the venerable Yogi Berra, it's Deja Vu all over again!

There is no end to the supply of tulips.


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[Jmbarrack]

Originally Posted by teck21

It is easy and fun to attribute it to the new crypto rich.

It is worth remembering though that they represent only a tiny fraction of the world’s financial assets, and held by an even smaller fraction of the world’s population.

The true driver of mass wealth has always been, and will always be real estate.


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Yes, very true.

But these crypto rich guys are mostly young and big into hype and social media. That’s what’s fueling the majority of this fire.


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[joejet]

Originally Posted by Jmbarrack

Yes, very true.

But these crypto rich guys are mostly young and big into hype and social media. That’s what’s fueling the majority of this fire.


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Yep
+
the amount of watch content now on youtube there must be 5-6 hours a week of new content just on watches + many many hours on chats about watches. a few years ago there was virtually nothing.

[teck21]

Originally Posted by Jmbarrack

Yes, very true.

But these crypto rich guys are mostly young and big into hype and social media. That’s what’s fueling the majority of this fire.


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Possibly, but we don’t have the figures to know for sure, they are definitely the most conspicuous though.


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[Jmbarrack]

Originally Posted by joejet

Yep
+
the amount of watch content now on youtube there must be 5-6 hours a week of new content just on watches + many many hours on chats about watches. a few years ago there was virtually nothing.

Yes, you’re inundated. Couple that with retargeting and you look at watch once and you’ll see it in ads on every site you see


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[teck21]

Originally Posted by Jmbarrack

Yes, you’re inundated. Couple that with retargeting and you look at watch once and you’ll see it in ads on every site you see


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Can’t disagree that there’s insanity there.

The thing is what happens when the insanity ends/bubble bursts/deflates/whatever.

Odds are Rolex demand will still settle at a new base that is far far above supply, and in fact climb again some time after insanity ends/bubble bursts/deflates/whatever.

That does sound like real estate. Or the stock market.

There’s no better time to get into Rolex, than anytime one can.


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[jacky_lai]

Originally Posted by Calatrava r

It seems to be working just fine at the moment for the parties involved. Rolex could increase Daytona production at anytime which would drop the used market values.

Well, Rolex could decrease Dayton production and/or increase their price at anytime to support their values.

Everything goes both ways.

[jacky_lai]

Originally Posted by Oxfordian

The reason why the prices are what they are is because people buy at that price.

If no one bought the watch at this price then the price would fall.

Hope this helps.

I just got a second hand black dial for $32K. You'll never get a chance to buy one from AD for retail price. Sorry to say, but that's the reality.

[RealMadrid1988]

Originally Posted by SubMillennial

these aren't end users buying these, just resellers from other resellers

This is just patently false. Just last week someone came on here and their first post was an incoming white Daytona purchased (for them as a gift) on the gray market at $40k.

There are undoubtedly countless others who are also buying and too afraid to admit it because of all of the posts (like those in this thread) calling them stupid.

[beshannon]

Originally Posted by BillA

Do people have this kind of money to burn?

Yes

[Beto737]

Originally Posted by teck21

There’s no better time to get into Rolex, than anytime one can.


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I was recently told that to compete in Daytona market today, takes upwards of $300-400k spend history. I think they were trying to tell me something…

[RolexSimon]

Originally Posted by BillA

Price of a SS Daytona ranges between $38K to $42K, grey dealers, for a watch with an msrp of $13,150.

Where does it end? Is this insanity? Do people have this kind of money to burn? I just don’t get it.

End rant.

That is the base RRP price for a SS PP and there's a queue a mile long too. Grey double that for them too......

[gerry100]

dont know, but it will be a surprise for many

[horseShu]

in summary, here are OP's options:

a. pay the market premium
b. play the AD games and hope for the best
c. go for another brand
d. do nothing and wait for the market to change

notice that ranting is not one of the options. that's because it doesn't really do anything.

[alllexandru]

Originally Posted by alllexandru

funny how 99% of people dont give a ..... on watches Daytona included, it is all in our twisted wis life
move on, it is what it is, let them pay thats fine.

Hate to quote myself

[Mendota]

Originally Posted by teck21

There is no end to the supply of tulips.


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Not to veer completely off topic, and this is a completely separate conversation, but there literally was a finite supply of bulbs. In fact, there weren't even any at all. It was all options trading (futures) with the intention for the last man standing to ultimately take possession of the actual bulb, but nobody wanted the actual bulb. They just wanted to flip the option and take their sliver. If you haven't case studied what happened or grown tulips yourself, they take ~12 years to cultivate and are incredibly fragile and finicky, plus they have to come from the mother bulb. They weren't native to Holland, either, so they were imported into the country not long before the excess. That's a big part of what happened because they were new and rare. So yes, there absolutely was a limited supply which, combined with freely flowing capital with leverage, combined with scalping and FOMO, plus a pandemic, created the mother of all bubbles.

I'm not saying this is the same. I'm just saying it's fascinating and ironic how many similarities there are, including a raging pandemic.

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[grimps]

Originally Posted by telesquire

Doesn't seem that many buyers for them at these prices right now here in the UK. If they were such hot property the grey dealers wouldn't have so many in stock. Even your smaller grey seems to have five or six Daytona out of a stock of 40 Rolex. I saw one larger London based bricks n mortar grey dealer before with 57 of them, they only have the one store too.
Rolex stock in general at these dealers seems to sit about for quite some time. I saw one well known grey before with a meteroite dial PM GMT that shows up as being first advertised in May on his Instagram page.....Whoopee! Hardly flying off the shelves!

Most grey dealers would offer you 23000 pounds for a white dial Daytona tomorrow , they wouldn't have 50 in their store if they didn't think they'd be able to sell them or they'd continue to go up in value

[teck21]

Originally Posted by Mendota

Not to veer completely off topic, and this is a completely separate conversation, but there literally was a finite supply of bulbs. In fact, there weren't even any at all. It was all options trading (futures) with the intention for the last man standing to ultimately take possession of the actual bulb, but nobody wanted the actual bulb. They just wanted to flip the option and take their sliver. If you haven't case studied what happened or grown tulips yourself, they take ~12 years to cultivate and are incredibly fragile and finicky, plus they have to come from the mother bulb. They weren't native to Holland, either, so they were imported into the country not long before the excess. That's a big part of what happened because they were new and rare. So yes, there absolutely was a limited supply which, combined with freely flowing capital with leverage, combined with scalping and FOMO, plus a pandemic, created the mother of all bubbles.

I'm not saying this is the same. I'm just saying it's fascinating and ironic how many similarities there are, including a raging pandemic.

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The other poster’s supposition is that the entire market for Rolex watches was based on the constant reselling of the watch, like tulips.

There is no end user for the watch. Or the tulip. It exists simply to be sold to the greater fool.

You seemed to agree.


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[subdownunder]

I have a local watch dealer who has been in business for over twenty years. He gets a lot of stock from SE Asian suppliers and local loyal customers.

Currently he has about 8 Daytona's in various configurations and age in stock and he hasn't sold one for over 8 months.

The last sale he had was to my friend a black dial late 2020 model without any wear for $27K (asking price was $32,000)

This tells me that dealers have stock but there are few buyers and the asking prices are highly inflated compared to the discounted prices that can be negotiated.

This is a personal observation and it may vary across markets, but until Chrono24 and others offer real price discovery based on sale prices this conversation will always be subjective.

[zengineer]

Originally Posted by mfnj

Here's how it could stop (but it will never happen). Rolex severs relationships with all AD's and only sells through Rolex owned Boutiques and online. Only way you can purchase a watch is through Rolex which means no more watches for the greys! Demand might still exceed supply but then it might be a level playing field unless Rolex wants to play the games AD's are currently playing with VIP's and the "back room" stuff. As I said, will never happen!

You will still have a significant percentage of buyers who will flip to grey dealers as long as market prices hold since the supply/ demand imbalance still exists.

Either make more watches or live with today's situation. ADs aren't the issue and luxury brands don't maintain their status by selling online like some bed sheet start up company.

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