A Recession's Market Effect

[gluten]

For those of you that have been in this hobby for awhile, do recall what previous recessions did to the watch market? Has the current market hype been seen before, or are we in totally new territory?

While I understand it's pure speculation, I'm interested in gauging the downside.

[Pantheon]

in a recession people will pull back spending and instead of you begging the ADs to sell you a watch, they'll be calling you everyday begging you to buy a watch.

[1Zach1]

Do a search here in the Rolex section for “discount” and look at the threads pre-2015. You’ll see hundreds of them with people looking for the best way to get 20%+ off. ADs were overflowing with every model you can imagine. That’s how it was after the last recession.

[6538]

The good old days.

[BlueNote]

I’d rather not have a recession and have to deal with a continuing steel shortage than see a recession and have my portfolio take a hit. The latter would hurt more than the former does now.

[boogiebot]

Originally Posted by BlueNote

I’d rather not have a recession and have to deal with a continuing steel shortage than see a recession and have my portfolio take a hit. The latter would hurt more than the former does now.

I gotta agree with this.


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[Al1969]

Originally Posted by boogiebot

I gotta agree with this.


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2nd that.

[LordNewport]

Originally Posted by gluten

For those of you that have been in this hobby for awhile, do recall what previous recessions did to the watch market? Has the current market hype been seen before, or are we in totally new territory?

While I understand it's pure speculation, I'm interested in gauging the downside.

I suspect that if the chinese economy suffers greatly from the corona virus outbreak, there my be some softness but I doubt a major decline in prices..

[Fort Rolex]

Originally Posted by BlueNote

I’d rather not have a recession and have to deal with a continuing steel shortage than see a recession and have my portfolio take a hit. The latter would hurt more than the former does now.

This and only this

[JasonF]

I've lived through 3 recessions as "an adult" the first one around 1991 when I graduated college and it sucked trying to find a job.

Anyway, the last recession was a nasty one and many of my friends lost their jobs, businesses or marriages. Some lost all three. My company's revenue dropped over 50% and the only thing that saved my a** was that we lived below our means.

Anyway, the Rolex aspect of all of this is for many people the last thing on their mind is dropping discretionary funds on a luxury item. For some it's about survival and paying the bills.

I know the owner of our former local AD well and remember conversations in 2009 about challenges of him making payroll and rent and him lamenting that he didn't own his building and didn't have the resources at that time to try and buy it. This is a highly respected AD with a multi-state operation.

The business cycle has not been repealed and I'm willing to bet that the current exuberance will shift during the next downturn. There will always be enthusiasts who will pay for in-demand pieces, but the froth will be gone.

[Pantheon]

Originally Posted by BlueNote

I’d rather not have a recession and have to deal with a continuing steel shortage than see a recession and have my portfolio take a hit. The latter would hurt more than the former does now.

I don't care for a recession making it easier to buy watches. However though one of my businesses will actually boom during recessions.

[1665fan]

2008 was the real crash.....this is nothing compared to a housing crash.....can you live in your SS sport watch???? Hell no

[Doc Savage]

Originally Posted by BlueNote

I’d rather not have a recession and have to deal with a continuing steel shortage than see a recession and have my portfolio take a hit. The latter would hurt more than the former does now.

I agree. Unfortunately, it's coming. The stock market is incredibly overvalued right now. I've moved half into bonds.

[ilovethiscity]

Yeah do we all lose our money but get Panda Daytona’s for MSRP

[Bladeshot]

Originally Posted by BlueNote

I’d rather not have a recession and have to deal with a continuing steel shortage than see a recession and have my portfolio take a hit. The latter would hurt more than the former does now.

Absoutely! Me too. Not being able to find a Rolex at an AD is truly a first world “problem”. This is far better than the alternative.

I used to pick off 5-digit GMTs and Subs at $3.5k US. And I’m a late comer to this hobby of collecting and trading watches.

[mobster600]

A recession would be dismal. I would consider worrying about your personal finances rather then the Rolex market. A watch would be the last thing on my mind in a recession.

[newu5er]

Last recession, ADs were calling me to get on my list to buy from. Basically, I just took down sales associate names and what they were offering. If I purchased a watch that month, one of them would get the call.

[tacotaco]

Long game boys
Don’t panic
Buy the dips

[Zyfon]

Originally Posted by LordNewport

I suspect that if the chinese economy suffers greatly from the corona virus outbreak, there my be some softness but I doubt a major decline in prices..

Already seeing some decline in prices due to Corona here in Thailand. Gray sellers I've talked to aren't moving inventories as quickly as the past.

[Psijason]

Originally Posted by Pantheon

in a recession people will pull back spending and instead of you begging the ADs to sell you a watch, they'll be calling you everyday begging you to buy a watch.

Precisely correct!!!

[aleeboy]

In the previous recessions, debt was relatively expensive and assets were not worth anywhere near where they are today. Job loss could certainly result in the need for a fire sale of items such as Rolex and handbags.

In this day and age, debt is dirt cheap. With globalization and property with dollar ranges being a ticket to a visa, there is less incentive to need to sell your watches and other items as you can off load your properties or refinance since your assets can be used as "handsome" collateral.

There will be no effect. In fact, if the predatory layer wanted to, they could make Rolex even more scarce than they are today.

Just move along people. Again, I will say it was a good run.

[EEpro]

Originally Posted by tacotaco

Long game boys
Don’t panic
Buy the dips

Exactly.... and don't forget to keep some powder dry.

[Tha Baron]

Originally Posted by aleeboy

In the previous recessions, debt was relatively expensive and assets were not worth anywhere near where they are today. Job loss could certainly result in the need for a fire sale of items such as Rolex and handbags.

In this day and age, debt is dirt cheap. With globalization and property with dollar ranges being a ticket to a visa, there is less incentive to need to sell your watches and other items as you can off load your properties or refinance since your assets can be used as "handsome" collateral.

There will be no effect. In fact, if the predatory layer wanted to, they could make Rolex even more scarce than they are today.

Just move along people. Again, I will say it was a good run.

???? Not sure I follow. When a recession hits, lenders typically pull back. Borrowing money now may be cheap but that all changes if the economy tanks

[tla]

If you buy what you like, who cares where the market goes?

[aleeboy]

Originally Posted by Tha Baron

???? Not sure I follow. When a recession hits, lenders typically pull back. Borrowing money now may be cheap but that all changes if the economy tanks

That's why you have handsome collateral? You can sell or refinance. These are called options. Anyways, I hope you don't think prices and availability will improve? You obviously don't get the new business model.

Only Rolex can stop this with a direct model and extreme control/ checks on buyers - as I said, I'm happy to have seen the best of the watch world.

[mikea]

Originally Posted by aleeboy

That's why you have handsome collateral? You can sell or refinance. These are called options. Anyways, I hope you don't think prices and availability will improve? You obviously don't get the new business model.

Only Rolex can stop this with a direct model and extreme control/ checks on buyers - as I said, I'm happy to have seen the best of the watch world.

Respectfully disagree here. No new business model...it’s human behavior. Very predictable and hasn’t changed in the face of economic contraction. Prices will settle

[Dr. Robert]

Originally Posted by BlueNote

I’d rather not have a recession and have to deal with a continuing steel shortage than see a recession and have my portfolio take a hit. The latter would hurt more than the former does now.

I concur

[beshannon]

Originally Posted by gluten

For those of you that have been in this hobby for awhile, do recall what previous recessions did to the watch market? Has the current market hype been seen before, or are we in totally new territory?

While I understand it's pure speculation, I'm interested in gauging the downside.

How secure is your job? How much do you have in savings? How much financial pain can you endure for 12-18 months?

[wfitch]

If and/or when the WHO uses the description “pandemic” for the corona virus, and I certainly hope it never comes to that, we will see a recession.

[pickettt]

Originally Posted by beshannon

How secure is your job? How much do you have in savings? How much financial pain can you endure for 12-18 months?

Right. Nowhere in this equation is a watch or horology