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Originally Posted by 911AP
Where do you get AP is making 70k units a year? That isn't happening for a long while. 95% is not the RO either.
Ah but the key difference is supply. Back then supply was extremely high. Think of it as today's housing market. With interest rates increasing month after next the same thing should be happening. It should collapse. But it's not. It's pulling back definitely. But with housing supply still at all time low's it's not going to create a collapse like 2008.
The AP market today is the same. The supply is still too low. Rolex is difference. Rolex makes 1 million watches a year which is why a lot of the watches are back at retail now. RM didn't change in price AT ALL. The reason is there is barely any supply.
But time will tell who is right in this debate. It's easy for me and anyone arguing the opposite to be a keyboard warrior and fight. Time will tell....As I said, let's wait till interest rates stop increasing to see what happens next and revisit this conversation.
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Prices in the secondary market will 100% come down. They already have. When borrowing costs go to 6%+ in the next few years, these so called grey dealers who levered themselves up on cheap interest will have to start liquidating their inventory as the cost to service the debt is just too much for them to handle.
Interest rates to stop increasing? Why does that matter and also, when do you suppose that's going to happen? The Fed has signaled they will increase to over 4% by the end of this year and probably higher in 2023, and on top of that, have stated they have the resolve to hold it for enough time to kill inflation. In short, they are willing to cripple the economy to bring down inflation.
What do you think that will do to any asset class, let alone an asset class that is highly discretionary, and where valuations are made up of perceived value and not fundamentals?
By the time the Fed decides to decrease rates again, which will probably be 2-3 years from now at minimum, the secondary watch market will be sufficiently destroyed where this conversation you want to have won't even matter.