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8 June 2022, 11:16 AM | #1 |
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Will Pateks keep dropping?
Hey just wanted to gauge the experts on the matter.
We own a bunch of rare Pateks (I would say we have seen a 20-35% for most pieces). Do you guys think the market will keep dropping? |
8 June 2022, 11:18 AM | #2 | |
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Probably because people have other concerns now and they were at stupid prices before. Sent from my iPhone using Tapatalk |
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8 June 2022, 11:24 AM | #3 |
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I think they will, especially the Nautilus & Aquanaut. Nothing is moving right now, Royal Oak's have tanked also.
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8 June 2022, 11:27 AM | #4 | |
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Since this morning, both the treasury secretary and World Bank have said they believe inflation will continue to persist over a prolonged period. I think watch prices will continue their decline and at an increased manner especially for those references that experienced explosive gains (hype models). The cost of fuel, food, housing, and basic life essentials are making many recalibrate their spending habits. |
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8 June 2022, 12:00 PM | #5 | |
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rolexes should be most impacted because people were actually buying them on credit lol |
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8 June 2022, 12:08 PM | #6 | |
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There’s a good majority of over leveraged dealers and individuals who are holding hype Patek references. It’s not a small percentage. Patek won’t be immune to continued price declines once all those try to offload at the same time. It’s not exempt from market fundamentals. The fact a dealer came on here inquiring is telling. No offense to OP. |
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8 June 2022, 07:08 PM | #7 |
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9 June 2022, 12:16 AM | #8 | |
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I can't say I am not all that surprised that a grey dealer doesn't know the market they conduct business in, and thus they are coming on here to gather more market data. Extrapolate that to the broader grey market if I may, and I begin to wonder how many of these dealers have little to no idea what they are doing. (No offense OP.) To the OP, I hope you didn't lever up and you get out of this somewhat unscathed. |
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9 June 2022, 12:39 AM | #9 | |
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23 June 2022, 09:50 AM | #10 | |
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Not many people will bring cash to buy rolex. In Mexico, it’s actually illegal due to money laundering Sent from my iPhone using Tapatalk |
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23 June 2022, 10:12 AM | #11 |
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24 June 2022, 11:16 AM | #12 |
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23 June 2022, 10:15 AM | #13 |
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i didn't mean credit in that way. i would 100% always swipe a rolex and have in the past simply for the free points. i was referring to people swiping them then paying it off with interest, doing buy now pay later, or even taking loans out (because of the investment narrative) while not actually being able to afford them
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8 June 2022, 05:23 PM | #14 | |
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This is so mind blowing that i think there is no safe place to hide, just ensure portfolio is not overleveraged, ideally lower your counterparty risks (bank failures) and then just ride through the storm.. where watch prices will be once the clowds lighten up in a few years, who knows
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8 June 2022, 12:19 PM | #15 |
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interesting to see if the revenge shopping in Chinese market helps as some big cities like Shanghai and Beijing have the lockdown removed partly
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8 June 2022, 01:06 PM | #16 |
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The Chinese economy is in a different, much worse place than the first lockdowns. Capital outflows are accelerating and the Chinese govt is lowering interest rates and moving forward spending, basically going the opposite direction of all the other countries that are tightening. There will be no revenge shopping this time.
All speculative or appreciation based 'investments" are falling, even property is cooling. The watch market is going to keep falling until inflation and interest rates stabilize which won't happen probably till next year totally separate from any potential recession. For decades pre-owned watches traded at a fraction of MSRP, there's no reason not to expect the market will revert to the mean, especially with every watch brand having boosted production capabilities over the last few years of the bubble. There is more production capability than there ever has been and it is cranking along as the market falls through the floor. Unless those pateks are rare AF AND significant I would sell now. Market may come back but it could be years and in the interim you'd be better off in cash to put towards real I vestments when the market does start to turn around. |
8 June 2022, 08:18 PM | #17 |
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Going where or how are they doing this? I thought getting money out of China was rather difficult.
I remember reading all the stories about Chinese buying up properties in the US/Canada/Australia/..., is this still going on then? Somehow I can't imagine these ridiculous wealthy Chinese would stop buying, since the important thing is to get money out of the country. Buy a 5 million property, even if it loses 500k in the current market it doesn't matter since that's the cost to get this done. So they are unaffected? |
8 June 2022, 11:37 PM | #18 | |
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The big money moving is at the corp / institutional level, most western countries are tightening policy and raising interest rates while China is doing the opposite, loosening credit and lowering interest rates, so there's been a natural move to pull investment from China to EUR/USD zones as the relative return becomes more favorable. That's not politics or speculation, that's just normal boring asset allocation. Additionally, the 0 covid policies and arbitrary market controls make China practically uninvestible killing capital inflows of foreign investment. No one wants to buy China bonds with the recent defaults. This is forcing China to be more dependent on internal growth vs foreign investment at a time when their housing market is going bust and covid lockdowns froze their economy. It doesn't help that China has been uncertain about their position on the war and if there's an escalation no one wants to pour money into a country that could get hit with sanctions. It isn't the end of the world, I'm just saying this lockdown is different. In 2020 China went into lockdowns as a strong economy, in 2022 they went into harsher lockdowns on richer regions with a weaker economy so I wouldn't expect the revenge spending to hit the same way as it did last time. |
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8 June 2022, 11:56 PM | #19 | |
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8 June 2022, 01:26 PM | #20 |
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Yes
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8 June 2022, 01:30 PM | #21 |
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Here's hoping I can buy 3800s for $20k again.
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8 June 2022, 02:05 PM | #22 |
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i figure the grey market insanity was more related to the bitcoin market and once that took a big hit overleveraged dealers had to dump inventory. everyone colluding to limit stock couldnt hold out anymore. timing seemed to coincide with that but ive been wrong many times.
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8 June 2022, 03:09 PM | #23 | |
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It's no coincidence there was a sudden influx of young guys who were also into trading cards and NFTs always talking about maximizing value and leveraging up. These guys were not true watch lovers but in it as a game to make money. |
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23 June 2022, 10:10 PM | #24 | |
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Everyone loves an idea to get rich quick Sent from my iPhone using Tapatalk |
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8 June 2022, 03:31 PM | #25 |
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Depends what you mean by rare, rare vintage models continue to make record prices at auction but the highly inflated modern Nautilus and Aquanaut (in my opinion) will keep dropping.
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8 June 2022, 04:36 PM | #26 |
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Anything discontinued is a ‘safe’ place IMO. It’s all these new releases that have been super hyped to 3-5x MSRP that are tanking.
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8 June 2022, 05:01 PM | #27 |
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8 June 2022, 04:41 PM | #28 |
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the watch, the sport watch raise too crazy in the past year......people who have enough knowledge or clear mind should know this is just a bubble
what's go up, must go down Rolex produce 1 million every year, it is reasonable to buy a daytona for HKD4xx,xxx? should go to see a doctor |
8 June 2022, 05:40 PM | #29 |
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I suspect luxury goods in general are going to drop further this year, and keep going down into next year.
A local AD had the best year in history, last year, during the pandemic. They attributed the great year(s) to COVID, specifically that people had money to burn and not much to spend it on - given travel limitations. So disposable income normally spent on luxury travel was redirected to jewelry. While travel isn't back where it's used to be, its certainly bounced back. On top of that, the pressures on global supply chains seem to be easing somewhat, which is going to mean supply becomes less constrained than it has over the past couple of years. And then of course we have inflation, which is also going to put a little but of downward pressure on demand for luxury goods. Maybe not as much as the other factors re: Patek, but certainly some impact will be seen. And then there's the impending recession.... So - in short, I suspect we'll continue to see a softening of demand which should put downward pressure on Patek and other luxury goods pricing. |
8 June 2022, 05:50 PM | #30 | |
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We have decades of history to look at what watch prices did. Then we have a unique period between say April 2020 to March 2022. During that unique period we have multiple abnormal factors at play (money being pumped into the market, free money being handed out to people, very limited discretionary spend options, extreme wealth creation from stocks and bitcoin etc etc). I have no idea why someone would see that 2 year period with abnormal factors as more indicative of future trends, compared to the decades of history that preceded it. The multiple factors that led to the watch bubble are being unwound, and new factors that are a headwind to luxury item prices (inflation, cost of living, interest rates) have entered the room. As such I'd expect mean reversion, and then some. |
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