Rolex price correction

[Juclaq]

There is going to be a Rolex price correction in 2019. There is no way this is sustainable. You are looking at pre-owned steel sports selling above MSRP. I can understand if the watches were discontinued models. However, we are looking at mass produced watches like a Sub or a SD. The following are why I know Rolex price correction is coming:

1. As much as Rolex makes us believe there is a shortage, Rolex is a still mass produced.
2. Lot of people have bought Rolex SS on speculation. If there is a price correction, I see alot of them dumping stock
3. All things run in cycles. Stocks, economy and even watches. Panerai were popular 5 years ago. Like Rolex, used Panerai were sold above retail.

I was in a market for another Rolex but I decided not to purchase it. All the speculations and rumors remind me of the housing bubble in 2008. I saw that coming and i waited after the bubble pop before purchasing properties. I see the same thing here. I am going to wait

[milwins]

lol nah

[Soarer]

Hmm. This is ROLEX you are talking buddy.

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[rominvicta]

Lol

[VicLeChic]

Dream on.

[harvey]

Surprised you can’t see the comments coming lol


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[schoolboy]

Time will tell.


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[tyler1980]

Originally Posted by Juclaq

There is going to be a Rolex price correction in 2019. There is no way this is sustainable. You are looking at pre-owned steel sports selling above MSRP. I can understand if the watches were discontinued models. However, we are looking at mass produced watches like a Sub or a SD. The following are why I know Rolex price correction is coming:

1. As much as Rolex makes us believe there is a shortage, Rolex is a still mass produced.
2. Lot of people have bought Rolex SS on speculation. If there is a price correction, I see alot of them dumping stock
3. All things run in cycles. Stocks, economy and even watches. Panerai were popular 5 years ago. Like Rolex, used Panerai were sold above retail.

I was in a market for another Rolex but I decided not to purchase it. All the speculations and rumors remind me of the housing bubble in 2008. I saw that coming and i waited after the bubble pop before purchasing properties. I see the same thing here. I am going to wait

the housing bubble brought down financial markets. Financial markets taking a huge hit is what made the bubble pop. A Rolex bubble wont do that.

You can predict a financial market collapse and that could have an effect on Rolex prices, but as long as people are making money its going to continue.

BTW if you timed the housing market so well, why are you still into SS Rolex? Surely it should be a 5711 discussion now

[T3F]

Couldn't agree more, although I differ some on the cause of the watch bubble. I was thinking about starting a thread on this earlier today, but thought I would get slammed by other members, and, well, it appears that's what's happening to you.

I wanted to get some hard numbers on the bubble, so I looked through old classified posts for a bunch models earlier today and found the following price increases over a roughly 18-month period:
-116610LV up 50%
-116500LN up 30%
-116710BLNR up 40%
-116610LN up 30%
-Patek Philippe 5711 up 100%
-Audemars Piguet 15400 and 15202 up 50%

This is absolutely ridiculous growth over a short period of time, and those that think we're not in a bubble or that this is sustainable are deluding themselves.

My take is that the watch bubble, more than anything, is fueled by the hot economy. I agree that a lot of people (probably the majority) are either buying due to speculation or because they got sucked into the hype and figured they could sell it for a profit even if they ended up not liking it (I'm going to call these the "opportunists"). At the same time, though, a lot of these people are able to (or are at least willing to) buy these watches in the first place because of the good economy.

When it starts to crack -- and it will -- watches, a luxury good, will suddenly become less important and experience a sharp fall in demand. At the same time, supply will increase due to the speculators and opportunists offloading their watches. Most of these watches -- I'd guess all but the 116500 and the 5711 -- will be able to be bought from an AD with no wait (and a reasonable wait for the 116500 and 5711), meaning that resellers will have to fall substantially below MSRP to find willing buyers.

Much of this can happen in a matter of weeks, and I think all of it can happen within a few months if the downturn is of reasonable proportion. Prices for some of these watches -- notably, the 116610LV, 116710BLNR, and 116500LN -- appear to have already fallen about 5-10% in the last month or two, and nothing's even happened in the market.

A lot of you might think I'm a lunatic, a pessimist, or both, but this story has played out countless times in countless markets. There's crazy growth, everyone seems to be benefitting, it seems like it could never possibly end, everyone finds ways to justify how this will be the "new norm" and how the market never will or could return to previous levels, etc. One minute, everything's going as well as it possibly could be, the next, you're upside-down in free-fall trying to figure out what the hell happened and how you can save yourself.

I hope I am wrong, as this won't benefit me at all -- I own 4 of the examples I used above, and will soon own a few more. Unfortunately, this is a textbook example of a bubble, and I just don't see a scenario in which it doesn't pop.

[sallyhats]

I agree with the sentiment that this is a “bubble.” The stock market is red hot and people are making hand over fist, but that’s going to do a 180 real soon and the people willing to spend 100% on MSRP is going to dry up real quick and those grey dealers buying up stock are going to be left holding the bag.

What I do not get is why doesn’t Rolex just make enough for everyone. What are they trying to be, a patek, AP? They would make so much more money, they’re a business, when did this status come into play?

I’m in Dubai right now and I bought 2 Rolex’s in 2015 and i can’t even get a SS sport watch even a 116610LN forget an LV from the same AD.

[Sal_UKSheffield]

Everyone is laughing but my AD is convinced a price increase is due
“Everything else has been a price correction”

[jsausley]

Rolex watches will always be desirable and unless Rolex massively screws up the supply chain by dumping large quantities of watches into the market then the resale value will always be high.

The only thing, and I mean ONLY thing, that will bring used prices down significantly is a massive financial collapse, like in 2008. If stocks drop by 50% and unemployment skyrockets back to 8%, people will need cash to live off of. Remember that the typical American has a really small or no emergency fund whatsoever. So anyone who stretched for a Submariner or other watch will be very tempted to offload it at that point.

Personally if this happens I see it as a buying opportunity. If the market collapses I'm going to be unwinding some of my more conservative investments and pumping money into stocks at a 50% discount. I'd also probably keep some powder dry to pick up a couple of investment grade Rolex watches at the same time if the prices do fall -- a Kermit, a Daytona and a nice vintage Submariner.

[rambo99]

will be happy to get a ceramic ss Daytona at msrp.

[peterpl]

Originally Posted by T3F

Couldn't agree more, although I differ some on the cause of the watch bubble. I was thinking about starting a thread on this earlier today, but thought I would get slammed by other members, and, well, it appears that's what's happening to you.

I wanted to get some hard numbers on the bubble, so I looked through old classified posts for a bunch models earlier today and found the following price increases over a roughly 18-month period:
-116610LV up 50%
-116500LN up 30%
-116710BLNR up 40%
-116610LN up 30%
-Patek Philippe 5711 up 100%
-Audemars Piguet 15400 and 15202 up 50%

This is absolutely ridiculous growth over a short period of time, and those that think we're not in a bubble or that this is sustainable are deluding themselves.

My take is that the watch bubble, more than anything, is fueled by the hot economy. I agree that a lot of people (probably the majority) are either buying due to speculation or because they got sucked into the hype and figured they could sell it for a profit even if they ended up not liking it (I'm going to call these the "opportunists"). At the same time, though, a lot of these people are able to (or are at least willing to) buy these watches in the first place because of the good economy.

When it starts to crack -- and it will -- watches, a luxury good, will suddenly become less important and experience a sharp fall in demand. At the same time, supply will increase due to the speculators and opportunists offloading their watches. Most of these watches -- I'd guess all but the 116500 and the 5711 -- will be able to be bought from an AD with no wait (and a reasonable wait for the 116500 and 5711), meaning that resellers will have to fall substantially below MSRP to find willing buyers.

Much of this can happen in a matter of weeks, and I think all of it can happen within a few months if the downturn is of reasonable proportion. Prices for some of these watches -- notably, the 116610LV, 116710BLNR, and 116500LN -- appear to have already fallen about 5-10% in the last month or two, and nothing's even happened in the market.

A lot of you might think I'm a lunatic, a pessimist, or both, but this story has played out countless times in countless markets. There's crazy growth, everyone seems to be benefitting, it seems like it could never possibly end, everyone finds ways to justify how this will be the "new norm" and how the market never will or could return to previous levels, etc. One minute, everything's going as well as it possibly could be, the next, you're upside-down in free-fall trying to figure out what the hell happened and how you can save yourself.

I hope I am wrong, as this won't benefit me at all -- I own 4 of the examples I used above, and will soon own a few more. Unfortunately, this is a textbook example of a bubble, and I just don't see a scenario in which it doesn't pop.

Good post. If you look at the percentage growth there is not a single asset in the world that should appreciate this fast in this short period of time.

Most guys on here are going to say no we are not in a bubble because they are Rolex owners and of course we all have vested interests including myself because I could flip all my SS and even my PM pieces for a profit today. I just checked full rose gold skydweller prices TDs are asking close to or over $40k? WTF - I bought mine for $33k brand new not very long ago.

Logically analysing the numbers its clear we are in a bubble.

[red1108nyc]

China wealth, crypto rich, oil and strong S&P over past 2 years may have something to do with bubble like price action.

[brandrea]

If anything, Rolex raises MSRP to capture some of the money they are leaving on the table.

[acfcheung]

Lol good one

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[tyler1980]

Originally Posted by brandrea

If anything, Rolex raises MSRP to capture some of the money they are leaving on the table.

worked for Patek when it was targeted at the 5711 and 5712... 20% more to them and they still have mile long WL's. Grey prices went up too, but they are still making 20% more per watch.

I really hope Rolex targets models and doesnt do an across the board increase as that makes discountable watches even more discounted and that feeds secondary dealers more than anything as AD's need help to move non-hot pieces not hot ones.

[Boba Fett]

I'm pessimistic myself, I think the next crash will happen shortly after Trump wins his second term, and it will be hard. Buy only at mrsp with cash and you'll be fine. The Grey's might suffer, perhaps we can have a whip round?

[Amazing]

Very hard to call, but based on asking prices alone there seems to be some buyers fatigue on various models. The new BLRO was a fairly obvious one which would never hold that high. Subs and Sub dates seem to be getting closer to retail price on ebay. As someone who is looking to buy this might be rose tinted glasses.

I would expect the more "ordinary" SS models to come back to reality. Daytonas and steel Skydwellers will stay high as always.

[tom2517]

I have been waiting for a stock correction since 2016, I thought Amazon was too expensive back then but it hit 2000 USD this year, I’m still waiting for the market to correct so I can buy stocks at cheap....

[peterpl]

Originally Posted by tom2517

I have been waiting for a stock correction since 2016, I thought Amazon was too expensive back then but it hit 2000 USD this year, I’m still waiting for the market to correct so I can buy stocks at cheap....

Big big drops in the share market recently. I felt that from the US market and locally in the Australian market.

Went down again today. Chief economists at the big banks stating its a correction that was overdue from unsustainable growth over the past year or so. Just like our watches. LOL

[JacksonStone]

Originally Posted by Juclaq

There is going to be a Rolex price correction in 2019.

50% chance you're right.

[1William]

I think we are in a bubble and have been saying so for months. The supply and demand piece of the watch industry has been manipulated by retailers and the Grey Market. And I would say Rolex and PP have let it occur. How it corrects will be interesting and I am not sure it will be a pop of the bubble as much as a situation where the air gets let out of the balloon. How fast, don't know. In watching trends and seeing how many people appear to have gotten into the watch segment based on an "investment" it will be interesting to see the correction and how these watches get dumped. I look at it as I was here when prices were good and you could buy models from AD's at a decent discount. To when it was full retail, to now when it is a bloated beached whale. It will be fun to watch it and it is going to happen.

[Chester01]

There is no bubble. The gray market is reflecting real supply and demand. So why those prices may fluctuate as the “new” models I.e. Pepsi gmt, Daytona get older and thus more available the gray prices will necessarily come down. But history is the best guide. To my knowledge, Rolex never has reduceced the MSRP of their pieces. So, any bubble is entirely on the gray side of the market. For example I scored my Daytona in 2014, that’s about 13 years after the Daytona with the new movement came out. I obtained it as an AD that happens to have “one in the back”. Patience is a virtue and part of the thrill of the hunt my friends. The gray is being fed by the gotta have the latest and greatest right now mentality. Nothing wrong with that, but you will pay a price for that.

[peterpl]

Originally Posted by Chester01

There is no bubble. The gray market is reflecting real supply and demand. So why those prices may fluctuate as the “new” models I.e. Pepsi gmt, Daytona get older and thus more available the gray prices will necessarily come down. But history is the best guide. To my knowledge, Rolex never has reduceced the MSRP of their pieces. So, any bubble is entirely on the gray side of the market. For example I scored my Daytona in 2014, that’s about 13 years after the Daytona with the new movement came out. I obtained it as an AD that happens to have “one in the back”. Patience is a virtue and part of the thrill of the hunt my friends. The gray is being fed by the gotta have the latest and greatest right now mentality. Nothing wrong with that, but you will pay a price for that.

Of course the bubble is on the gray side LOL - otherwise there would be no bubble.

[Wildy]

I think PP and Rolex are happy with the prices asked by grey dealers. It means that they can increase their prices by any amount and still look at being a bargain and customers will gladly pay their price.

[zengineer]

First we need to run out of people willing to pay $7,000 over list, then 6,000 and so on. Then grey and market dealers will be unwilling to buy them and take slow sellers as an incentive to get them. Then a small meteorite needs to hit earth causing a market downturn. Then we have to hope Rolex won't simply throttle back output to stay under demand. And then we might be able to buy a watch.

It ain't all gonna happen in 12 months.

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[jsausley]

Originally Posted by tom2517

I have been waiting for a stock correction since 2016, I thought Amazon was too expensive back then but it hit 2000 USD this year, I’m still waiting for the market to correct so I can buy stocks at cheap....

You didn't get in when corporate tax reform was on the table? Wow.

[tyler1980]

Originally Posted by jsausley

You didn't get in when corporate tax reform was on the table? Wow.

trade issues made what would have been a huge boost to stocks a pretty sideways outcome. On paper that should have juiced stocks a lot but we are at a net gain of 2% since dec. 2017 for the DJIA