Has a watch 'bubble' ever popped before in history?

[opzxkl]

It seems that some models in Patek and Rolex are becoming irrational: Patek 5711/5712's are selling ~2x their MSRP, even for the new Rolex Daytona going for around the same ~2x MSRP. Vintage rolex prices have shot up 2-3x in the past few years.

I haven't lived long enough to know this, but in the history of watches, has there ever been a bubble that popped and caused prices reverted back to MSRP? Is this tulip mania?

[enjoythemusic]

Yes, during the Asian crisis and of course .com bubble. As an example, the then current model (as i recall) Patek 3939H went for $179k at auction (application piece, around $400k or so retail). There are other examples, yet this one jogs my memory because, well, wanted it yet yet felt due to bubble burst it may be better to hold onto....

Best bet is to NOT BUY NOW and wait for the bubble burst.

[T3F]

I'm wondering the same thing. Up until maybe 6 months ago, I kept thinking that the bubble would pop and then everything would quickly fall back to where it was 2-3 years ago (MSRP or below on everything but the Daytona).

For Rolex, I can still see this happening, as it wouldn't take much. I think part of the reason certain models (e.g., the 116610LV) are popular is because people know they won't lose money buying them, so there's no real risk. However, if the economy takes a dive, people will think a lot harder about buying them, especially for a premium. This starts a cycle; once there's no premium, people who are next on the list from ADs will be more nervous about buying them, which will make them more available at ADs, which will further lower grey market price, etc.

No Rolex models other than the blue Sky-Dweller, Daytona, and BLRO are reliably commanding more than a $2k premium, and even those three very popular models are only commanding ~$6-7k premiums. The $2k is nothing and could evaporate in a matter of weeks, whereas the $6-7k will take longer and might be more likely to stabilize at ~$2-3k than fall all the way back to MSRP if demand doesn't increase.

The tricky one, for me, is the 5711. It's literally going for $20-25k over MSRP, and I just can't see that evaporating quickly. I can see a slower decrease in demand that takes place over a few years, but I'm having a hard time seeing a scenario where they are readily available from ADs as the were a few years ago. That being said, if prices can rise this much in a few years, they certainly can fall that much, so I'm probably wrong.

All of this is pure speculation; I'm too young to remember a watch bubble popping -- in fact, all I know is the bubble, as I didn't really get into collecting until recently.

[JJ WA]

Excellent question. I guess (ie. fear) there will be a point in time in which wearing wrist watches, even more so mechanical ones, may become as outdated as carrying a pocket watch today. By then, the demand for our now beloved watches will have sharply dropped. Granted, there will still be a few collector pieces (Nautilus? Daytona? Who knows...), but the vast majority of today's “collectible” watches may be even difficult to sell for 'any' price. Prices reflect supply/demand. I know this is an uncomfortable and inconvenient truth, and I do hope I am referring to the 22nd century...

[thomaspp]

bubble backs...

stella day-dates have actually come down a fair amount...

Ninas...

Big burst in frank muller...

But in my opinion, there is no real bubble in vintage Rolex and Patek which will continue to do well long-term (some things seemed to have softened over the summer but not significantly). These watches are special, iconic, forever cool and just not THAT many of them.

Current production Patek and limited editions made in big numbers is scary to see trading at multiples of retail price...

[tng11]

2008. Milgauss GV back in the days were going for more than 100% over retail. By 2010 you couldn't give them away. Same deal for the 5960P and 5980/1A back in those days going for 100% over retail.

[enjoythemusic]

SS on plastic band was 5167 was $17k usd lnib only a few years ago.

Bubble? Obviously.

[Codik]

The bubble won’t burst until the next global downturn. We’re many years away from one, I believe.

[tyler1980]

Originally Posted by Codik

The bubble won’t burst until the next global downturn. We’re many years away from one, I believe.

you are more optimistic than me. I hope you are right.

[tng11]

Originally Posted by Codik

The bubble won’t burst until the next global downturn. We’re many years away from one, I believe.

Predicting the next downturn is like trying to a catch a falling knife.

I have my own views on this. Thankfully now I'm buying pieces without regard to where the market will go on them, and I'm more comfortable with that instead of chasing after all the shiniest objects.

[OH2004]

Originally Posted by Codik

The bubble won’t burst until the next global downturn. We’re many years away from one, I believe.

At least in the US. Consumer spending is still strong . We'll see how the rest of the world does.

[GB-man]

Originally Posted by T3F

I'm wondering the same thing. Up until maybe 6 months ago, I kept thinking that the bubble would pop and then everything would quickly fall back to where it was 2-3 years ago (MSRP or below on everything but the Daytona).

For Rolex, I can still see this happening, as it wouldn't take much. I think part of the reason certain models (e.g., the 116610LV) are popular is because people know they won't lose money buying them, so there's no real risk. However, if the economy takes a dive, people will think a lot harder about buying them, especially for a premium. This starts a cycle; once there's no premium, people who are next on the list from ADs will be more nervous about buying them, which will make them more available at ADs, which will further lower grey market price, etc.

No Rolex models other than the blue Sky-Dweller, Daytona, and BLRO are reliably commanding more than a $2k premium, and even those three very popular models are only commanding ~$6-7k premiums. The $2k is nothing and could evaporate in a matter of weeks, whereas the $6-7k will take longer and might be more likely to stabilize at ~$2-3k than fall all the way back to MSRP if demand doesn't increase.

The tricky one, for me, is the 5711. It's literally going for $20-25k over MSRP, and I just can't see that evaporating quickly. I can see a slower decrease in demand that takes place over a few years, but I'm having a hard time seeing a scenario where they are readily available from ADs as the were a few years ago. That being said, if prices can rise this much in a few years, they certainly can fall that much, so I'm probably wrong.

All of this is pure speculation; I'm too young to remember a watch bubble popping -- in fact, all I know is the bubble, as I didn't really get into collecting until recently.

Three years ago the 116520 was not a hot watch at all. The blnr was the hottest rolex. I was buying my 116600 may 2015 and the dealer pulled a white daytona out from the safe and said it was mine if I wanted it (I had bought 1 prior watch, a blnr). I passed on it because they were going for 1k less on TRF!

I wish I had bought it and put it in the safe. Even worse the day the 116500 was announced, my patek AD who carries rolex offered me both white and black 116520s when I called. I passed

[RussW]

Originally Posted by JJ WA

Excellent question. I guess (ie. fear) there will be a point in time in which wearing wrist watches, even more so mechanical ones, may become as outdated as carrying a pocket watch today. By then, the demand for our now beloved watches will have sharply dropped. Granted, there will still be a few collector pieces (Nautilus? Daytona? Who knows...), but the vast majority of today's “collectible” watches may be even difficult to sell for 'any' price. Prices reflect supply/demand. I know this is an uncomfortable and inconvenient truth, and I do hope I am referring to the 22nd century...

You are spot on. Which is why Patek need to evolve. Watches like the 5524 and 5968 are exactly the sort of thing Patek needs to do.

[Superburrito]

The great recession 10 years ago hit tons of asset classes.

To me the good thing about a watch or other tangible fairly liquid asset is that you get to enjoy it even if its market value decreases. You can't say the same thing about an equity investment, for example. And whenever my investments decrease meaningfully in value, I always think "I should have intstead bought cars, watches, etc. because at least I would have something to show for it."

[bonovox]

The great recession really has me scratching my head at what's going on today. I can remember being in stores that had everything you could ever want including Patek - the original eye on the stars snoopy in cases and Omega willing to discount heavily on that piece, any Rolex aside from the SS Daytona was not a problem at all, etc...

"All ships rise with the tide." The global economy isn't so bad as others have said, thus demand is there to keep these prices up.

[jon_jon]

There was supposedly a Panerai bubble burst some time ago, although I don't follow that brand.

https://www.rolexforums.com/showthread.php?t=309123

[Jay (Eire)]

Originally Posted by jon_jon

There was supposedly a Panerai bubble burst some time ago, although I don't follow that brand.

https://www.rolexforums.com/showthread.php?t=309123

Indeed. My 360 was commanding $25-30k at one point, 4-5x retail. It's now maybe $10-12k. A Fiddy (127) well into the $20ks too (3-4x retail), now also in the $12k range. The much desired 232 was solidy 1.5-2x retail, now below. Many models were selling at a premium, the annual LE lineup was in super demand and prime flipper material.

Hype was at an all time high, production numbers while never low were much lower than today. Even 2008 and the financial crisis didn't really knock much wind out of those sails (for those pieces in the market at that time). But then the bubble burst.

I have no doubt a large part of the Rolex steel market will come back to earth. I'm not so certain about at least some of the Nautilus models, 5711/12 I think will remain strong unless Patek do something to alter supply materially.

Just my opinion. And you know what they say about opinions, they are like.....

[soundserious]

More devastating than any watch bubble was the Beanie Baby bubble. Dark times.

[Donjo]

Non-essential high dollar luxury items are among the first things to tank in a recession. There's a buying opportunity coming. I just don't know when.

[SL BRABUS]

Yes.....

I blame it on the "Fake Rich" that could not afford to keep their luxury goods....

Having said that Patek Philippe & Rolex learn something new & try not to make the same mistake....

That why they limit or control their SS sport watches supply just in case if there will be a financial crisis recession in the future......

[enjoythemusic]

Originally Posted by Superburrito

The great recession 10 years ago hit tons of asset classes.

To me the good thing about a watch or other tangible fairly liquid asset is that you get to enjoy it even if its market value decreases. You can't say the same thing about an equity investment, for example. And whenever my investments decrease meaningfully in value, I always think "I should have intstead bought cars, watches, etc. because at least I would have something to show for it."

Excellent point of the difference between 'paper / electronic / stock' investments and things of actual, tangible / inherent value. There are reasons why the truly wealthy tend to gravitate towards rare/important cars, certain musical instruments, known good art, etc. Evelyn de Rothschild said on a CNBC interview during the most recent RE/bank bubble/crash that if you want to be cautious, you hold onto your gold bars (note he said gold bars, not stock in GLD, miners, etc).

[idontlike_bandwagons]

Isn't the more important question why people only care for those particular brands and models (AP including)? I mean there are a lot more brands and good looking models with equal and even better quality out there! Isn't this sidedness lame for any true watch lover?

[Sam Philip]

In 2008 16610LVs were sitting on AD windows and Daytonas were available with a vey short wait. In 2008 I bought a 16610LV from an AD without any wait and couple of years later I got a Daytona after a 1 month wait. The current bubble will burst but I'm not sure when

I think 5711 prices may have plateaued as watchfinder has 4 5711 blue dials and those watches are not moving

[cascavel]

Originally Posted by soundserious

More devastating than any watch bubble was the Beanie Baby bubble. Dark times.

Amen. Took a lot of good people down with it.

[R!$]

what goes up, must come down

[yoast]

Originally Posted by tyler1980

you are more optimistic than me. I hope you are right.

+1

[idontlike_bandwagons]

Originally Posted by tng11

instead of chasing after all the shiniest objects.

Am I too stupid to understand this phrase or do I just don't know anything about horology? If I look at your Instagram, then all you do is "chasing" the shiniest objects...

[tng11]

Originally Posted by idontlike_bandwagons

Am I too stupid to understand this phrase or do I just don't know anything about horology? If I look at your Instagram, then all you do is "chasing" the shiniest objects...

Don't get me wrong... I do like shiny objects.

My recent acquisitions have been an Explorer I, CK2998 and Lange Saxonia Thin... the last is especially cold in a market like this, but I've been getting tons of enjoyment from it. These things are going for basement bargain prices and are getting lost in the noise of all the hype around other models.

[Calatrava r]

The demand now is for a very few types of SS pieces. Overall, the watch market is very soft and the bubble burst some time ago. Demand for watches continues to fall. Rolex, PP and AP sport steel are the only signs of life.We may not even have a Basel Fair in a few years.

[thomaspp]

Originally Posted by Calatrava r

The demand now is for a very few types of SS pieces. Overall, the watch market is very soft and the bubble burst some time ago. Demand for watches continues to fall. Rolex, PP and AP sport steel are the only signs of life.We may not even have a Basel Fair in a few years.

I will be sure to tell the Richard Mille crowd! Lol


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