Equity, fixed income, and cryptos are all falling. Watch prices will logically fall

[Danny83]

Originally Posted by thomaspp

haha dude! China and Ukraine won't matter all that much with global recession.

Thomas nice to see you buddy

[Bearxj86]

Agree with you here buddy. Just pointing out that high risk high growth stocks almost always get destroyed in an inflationary environment. We are seeing value stocks take much less of a hit vs high growth low cash flow stocks.

Said another way, if you moved to stay at home stocks in 2020, you were up 3-4x and then now you aren't. Market cycles come and go.

Interesting to see how this plays out...but its not a good sign no doubt.

Originally Posted by DonLee

you do know that people are "investing" in watches are often investing in large cap growth and higher risk and growth stocks, naturally and not just the whole index.

The most popular being FAANG stocks.
Facebook, apple, amazon, netflix and google.

Among those 5, Only Apple and Google closed higher than their price 2 years ago. So yeah indeed a lot of stocks are back to 2020 levels


And besides I didn't say 2020 bottom. Nov 2020 Nasdaq was higher than today. So yeah the whole market is back to 2020 prices. I am right.

The point is if the stock market has dissolved so much liquidity, from the past 2 years, watch prices have moved very little in comparison. They haven't even gone back to Nov 2021, let alone Nov 2020.

If you want to compare the luxury market, LVMH stock has dropped over 30% from its tops, even more than Nasdaq or S&P. Watches actually haven't dropped that much imo.

[Bosscheto]

The war in Ukraine is a real game changer in Europe. The gaz situation could be utter devastation for European industry - most notably Germany which relies heavily on Russian Gaz. I have friends in heavy industries, for the first time I see sheer dread in their eyes. They used to pay 15 euros for KWH, now they are paying 115, and they follow the war more closely than I follow football. Every-time there is a massive massacre or something outrageous (we have those weekly), there is a push for more sanctions. The thing is the EU countries are in a bundle. For exemple Bulgaria is using Natural Gaz mainly for heating - so even complete cut off, can be compensated by a warm season and supplies from the neighbors. The oil situation is totally different, you cut the Russian oil, and country collapses, which will be a massive whole for the EU. Germany uses Natural Gaz for industry, and simply cannot cut it now, otherwise they are facing a 30% contraction of the economy (The words of the BASF CEO, not mine). So the situation is very very difficult here. The European market is still a massive market for watches. Time will tell, but the war looks will drag for months if not more. Also we have no idea what the piece will look like - Ukraine has suffered conservatively a damage of more than 600 billion dollars on infrastructure alone, without counting the 5 million refugees, tens of thousands of wounded and dead etc. It is a huge country, and the scale of the war is nothing my generation and the generation of my parents have seen in Europe. It surpassed in 10 days the wars in Yuguslavia, which lasted for 10 years (1991 - 2001). So we are having wave after wave of negative news on a daily basis, which does not inspire luxury goods ...

[ts3]

Originally Posted by DonLee

...

If you want to compare the luxury market, LVMH stock has dropped over 30% from its tops, even more than Nasdaq or S&P. Watches actually haven't dropped that much imo.

Watches apparently not having dropped as much may be a reflection of the following:

1) The watch market is highly intransparent and inefficient compared to public stock markets.
2) Most watches are still owned primarily for wearing and enjoyment rather than investment purposes.
3) Asking prices are a lagging indicator when prices are dropping.

I am afraid lots of watches have dropped 20%, 30%, or more from the peak already - in terms of offer prices from dealers that is (with some not buying at all).

The Nautilus market, for example, seems to have come to a dead stop where I live, not least because of the war in Ukraine 1-2 flight hours away. Most dealers have not capitulated yet, but their asking prices have become meaningless in light of the evaporated demand from consumers. Nobody seems to know at which price level deals can increasingly get done again.

[DonLee]

Originally Posted by ts3

Watches apparently not having dropped as much may be a reflection of the following:

1) The watch market is highly intransparent and inefficient compared to public stock markets.
2) Most watches are still owned primarily for wearing and enjoyment rather than investment purposes.

Watches are still nowhere as liquid as traditional stocks, and transparency is definitely a problem. Indeed most watches are owned for wearing, but people like us who do that, aren't moving the market in either direction. I only buy from AD, and I havent sold a single watch. It's the greys and "investors" who move the market in either direction.

[BrunoMalik]

Originally Posted by ts3

Watches apparently not having dropped as much may be a reflection of the following:

1) The watch market is highly intransparent and inefficient compared to public stock markets.
2) Most watches are still owned primarily for wearing and enjoyment rather than investment purposes.
3) Asking prices are a lagging indicator when prices are dropping.

I am afraid lots of watches have dropped 20%, 30%, or more from the peak already - in terms of offer prices from dealers that is (with some not buying at all).

The Nautilus market, for example, seems to have come to a dead stop where I live, not least because of the war in Ukraine 1-2 flight hours away. Most dealers have not capitulated yet, but their asking prices have become meaningless in light of the evaporated demand from consumers. Nobody seems to know at which price level deals can increasingly get done again.

I agree with this and its my feeling as well. Offering prices on C24 do not match reality. I would be surprised if you get offered much above 100k for a 5711 steel from a gray. Most of them wont offer anything at all as they are on a “buying freeze”.

With that being said, such correction was needed. It will wipeout all the new dealers that came on board in the last 2 years. Hopefully, it will wipe out some speculators as well. Especially the ones who took out CC loans at 20% interest to “invest” on overhyped watches. Lots of lessons will be learned this year.


Sent from my iPad using Tapatalk

[DK7]

Buying time!
Get out and look for good deals way to much money in the market for a crash.

[Images and Words]

Originally Posted by Bosscheto

The war in Ukraine is a real game changer in Europe. The gaz situation could be utter devastation for European industry - most notably Germany which relies heavily on Russian Gaz. I have friends in heavy industries, for the first time I see sheer dread in their eyes. They used to pay 15 euros for KWH, now they are paying 115, and they follow the war more closely than I follow football. Every-time there is a massive massacre or something outrageous (we have those weekly), there is a push for more sanctions. The thing is the EU countries are in a bundle. For exemple Bulgaria is using Natural Gaz mainly for heating - so even complete cut off, can be compensated by a warm season and supplies from the neighbors. The oil situation is totally different, you cut the Russian oil, and country collapses, which will be a massive whole for the EU. Germany uses Natural Gaz for industry, and simply cannot cut it now, otherwise they are facing a 30% contraction of the economy (The words of the BASF CEO, not mine). So the situation is very very difficult here. The European market is still a massive market for watches. Time will tell, but the war looks will drag for months if not more. Also we have no idea what the piece will look like - Ukraine has suffered conservatively a damage of more than 600 billion dollars on infrastructure alone, without counting the 5 million refugees, tens of thousands of wounded and dead etc. It is a huge country, and the scale of the war is nothing my generation and the generation of my parents have seen in Europe. It surpassed in 10 days the wars in Yuguslavia, which lasted for 10 years (1991 - 2001). So we are having wave after wave of negative news on a daily basis, which does not inspire luxury goods ...

I hope that no one who is worried about their electric bill going by a few $$$, is buying AP at grey prices. Or retail for that matter.

[Images and Words]

Also, no one will collapse without Russian oil, except for Russia. Stop spreading this nonsensical propaganda on a watch forum.

[macrowatch]

Originally Posted by Images and Words

I hope that no one who is worried about their electric bill going by a few $$$, is buying AP at grey prices. Or retail for that matter.

Uh...I wouldn't be so confident to make predictions, but we have many utility contracts up for renewal in the US in 2022. The rate requote is actually pretty material and aggregated across the board the annual cost is easily the price of an AP...so...yeah, inflation is gonna hurt this year. First world problems for sure. But first world 2022 problems none the less!!!

[R.bartlett]

Originally Posted by Images and Words

Also, no one will collapse without Russian oil, except for Russia. Stop spreading this nonsensical propaganda on a watch forum.

perhaps if you were a little bit closer to the front line you might have a different perspective on this war.

[Mighty_Kraken]

Imho it would be quite positive if interest in luxury watches would cool off by a lot. First it would wipe out speculators and all the shady new grey dealers.
Secondly watch distribution would probably be more divers because currently always the same guys get the interesting watches. If this doesn’t change i am afraid all the “collectors“ of AP will share the same gene pool in a few years…

[DVR]

Originally Posted by Bosscheto

The war in Ukraine is a real game changer in Europe. The gaz situation could be utter devastation for European industry - most notably Germany which relies heavily on Russian Gaz. I have friends in heavy industries, for the first time I see sheer dread in their eyes. They used to pay 15 euros for KWH, now they are paying 115, and they follow the war more closely than I follow football. Every-time there is a massive massacre or something outrageous (we have those weekly), there is a push for more sanctions. The thing is the EU countries are in a bundle. For exemple Bulgaria is using Natural Gaz mainly for heating - so even complete cut off, can be compensated by a warm season and supplies from the neighbors. The oil situation is totally different, you cut the Russian oil, and country collapses, which will be a massive whole for the EU. Germany uses Natural Gaz for industry, and simply cannot cut it now, otherwise they are facing a 30% contraction of the economy (The words of the BASF CEO, not mine). So the situation is very very difficult here. The European market is still a massive market for watches. Time will tell, but the war looks will drag for months if not more. Also we have no idea what the piece will look like - Ukraine has suffered conservatively a damage of more than 600 billion dollars on infrastructure alone, without counting the 5 million refugees, tens of thousands of wounded and dead etc. It is a huge country, and the scale of the war is nothing my generation and the generation of my parents have seen in Europe. It surpassed in 10 days the wars in Yuguslavia, which lasted for 10 years (1991 - 2001). So we are having wave after wave of negative news on a daily basis, which does not inspire luxury goods ...

I live in the heart of the EU and do worry a little but nothing like you. Planning to buy at least 3 watches this year. And the war, far away, is not going to stop me.

Following the Dutch and German watch forums nobody seems worried much. The new arrivals (NA's) keep coming as before.
It looks you are in a different Europe than I am.

You know, the financial crisis from 2008 got me more worried.
And we survived that quite well too. Always look on the bright side. Try, it helps. We all have to die someday.

[Adam84]

Originally Posted by DVR

I live in the heart of the EU and do worry a little but nothing like you. Planning to buy at least 3 watches this year. And the war, far away, is not going to stop me.

Following the Dutch and German watch forums nobody seems worried much. The new arrivals (NA's) keep coming as before.
It looks you are in a different Europe than I am.

You know, the financial crisis from 2008 got me more worried.
And we survived that quite well too. Always look on the bright side. Try, it helps. We all have to die someday.

Indeed. I mean, if the war were to escalate then i dont think any of us are going to have to worry for more than the 0.75 seconds it takes to turn the human body into dust so just crack on with life and enjoy it.

Sure energy costs more, inflation is up but if you have £20k to spend on a watch i suspect you are relatively well insulated from having to turn the gas off.

[DVR]

Originally Posted by Adam84

Sure energy costs more, inflation is up but if you have £20k to spend on a watch i suspect you are relatively well insulated from having to turn the gas off.

And that's the thing I don't understand at all.

We members here, usually, have made good money by being clever.
Why didn't one invest in being independent from outside energy needs?

I couldn't care less if gas or fuel would be going double again.

My 380m2 house is low-energy and the little heating we need, 8 weeks per year, is from a heat pump with two vertical 110m deep loops.

Solar panels and battery are coming this summer so we will be generating also all electricity we need and sell the surplus.

So that's why I can afford a brand new 15500 this year.

[Adam84]

Originally Posted by DVR

And that's the thing I don't understand at all.

We members here, usually, have made good money by being clever.
Why didn't one invest in being independent from outside energy needs?

I couldn't care less if gas or fuel would be going double again.

My 380m2 house is low-energy and the little heating we need, 8 weeks per year, is from a heat pump with two vertical 110m deep loops.

Solar panels and battery are coming this summer so we will be generating also all electricity we need and sell the surplus.

So that's why I can afford a brand new 15500 this year.

HAHA well in fairness i guess most people didnt bet on a war breaking out and gas prices going sky high.

while i like the idea of going 'off grid' and there are many benefits of doing so, it is also costly....

...it would be interesting to see how long it takes to recoup the costs of ground source heat pumps/ solar panels etc in your energy bills

[DVR]

Originally Posted by Adam84

HAHA well in fairness i guess most people didnt bet on a war breaking out and gas prices going sky high.

I didn't need a war to know that fossil fuels are a geopolitic bargaining tool since a very long time.
I am a kid from the seventies and will always remember the car free sundays, we played and rode bicycles on the motorways.
Fun times.

But not so fun as an adult, soaring prices, shortages everywhere. Panic more or less. Sounds familiar?

https://www.theguardian.com/world/fr...s-archive-1973

Originally Posted by Adam84

it would be interesting to see how long it takes to recoup the costs of ground source heat pumps/ solar panels etc in your energy bills

Huge off topic but I was more or less paid for my heat pump back in 2009 when we build our LEH. I paid less than if I would have used a gas heating system. It was right after the big financial meltdown/depression and the government wanted to stimulate construction. So they sponsored 'green' and I used it to the max.

Similar today, the government is sponsoring me again for an amount €3225 for the complete solar installation. The full installation will have paid for itself within 5/6 years at today's prices. If they go up even more of course it will be even sooner.

[hcivic91]

Of the price threads I’ve seen I like this one best. In particular, price discovery in the watch market is very limited with several dealers controlling so much of the inventory. Also, we know that prices are sticky, particularly in the short term. It is only after several months of depressed demand that price discovery will be better - dealers who need to meet monthly obligations will be forced, at some point, to adjust prices to free up cash. I anticipate dealers such as DSW will have planned for this and will have a proper amount of working capital to meet obligations and continue with the premium pricing he has had for years.

[Adam84]

Originally Posted by DVR

I didn't need a war to know that fossil fuels are a geopolitic bargaining tool since a very long time.
I am a kid from the seventies and will always remember the car free sundays, we played and rode bicycles on the motorways.
Fun times.

But not so fun as an adult, soaring prices, shortages everywhere. Panic more or less. Sounds familiar?

https://www.theguardian.com/world/fr...s-archive-1973






Huge off topic but I was more or less paid for my heat pump back in 2009 when we build our LEH. I paid less than if I would have used a gas heating system. It was right after the big financial meltdown/depression and the government wanted to stimulate construction. So they sponsored 'green' and I used it to the max.

Similar today, the government is sponsoring me again for an amount €3225 for the complete solar installation. The full installation will have paid for itself within 5/6 years at today's prices. If they go up even more of course it will be even sooner.

And what’s next after fossil fuels? There will always be a commodity that a certain country has and another needs.

Just look at lithium mines for batteries, microchip shortages, wheat in Ukraine etc etc.

When the stock market finally removes itself from the oil fix, something will be there to replace it and fight over

On the heat pump thing, yeh as a civil engineer I’m always surprised at how few new builds don’t have this technology along with solar etc. while I know it’s not cheap, it would be better to install during the initial build than retrofit it afterwards

[DVR]

I agree completely ! But, selfishly, all that does not concern me. I made money on the stock market after the financial crisis and left a happy man. The only thing I own and invest in now is real estate.

Edit: if there is a new huge stock market crash and everybody is scared i'll try to mimic my 2008 behaviour.

[Adam84]

Originally Posted by hcivic91

Of the price threads I’ve seen I like this one best. In particular, price discovery in the watch market is very limited with several dealers controlling so much of the inventory. Also, we know that prices are sticky, particularly in the short term. It is only after several months of depressed demand that price discovery will be better - dealers who need to meet monthly obligations will be forced, at some point, to adjust prices to free up cash. I anticipate dealers such as DSW will have planned for this and will have a proper amount of working capital to meet obligations and continue with the premium pricing he has had for years.

And add to that I’ve also found it interesting how major players like the watch box have influenced prices on brands like FP Journe, A Lange, H Moser, DeBethune over the last few years.

Don’t get me wrong, they all produce incredible watches and I’m glad online content has been produced to showcase them, but I’m not naive enough to realise that they had a lot of these watches tucked away before doing this.

Spotting the next big thing is key….same with classic cars really. I could have owned a Jag E-type for less than 15k 10 years ago..,.try getting one for less than 50-60 now!

[Adam84]

Originally Posted by DVR

I agree completely ! But, selfishly, all that does not concern me. I made money on the stock market after the financial crisis and left a happy man. The only thing I own and invest in now is real estate.

Edit: if there is a new huge stock market crash and everybody is scared i'll try to mimic my 2008 behaviour.

Sound advice!

[mickyd329]

Originally Posted by DonLee

you do know that people are "investing" in watches are often investing in large cap growth and higher risk and growth stocks, naturally and not just the whole index.

The most popular being FAANG stocks.
Facebook, apple, amazon, netflix and google.

Among those 5, Only Apple and Google closed higher than their price 2 years ago. So yeah indeed a lot of stocks are back to 2020 levels


And besides I didn't say 2020 bottom. Nov 2020 Nasdaq was higher than today. So yeah the whole market is back to 2020 prices. I am right.

The point is if the stock market has dissolved so much liquidity, from the past 2 years, watch prices have moved very little in comparison. They haven't even gone back to Nov 2021, let alone Nov 2020.

If you want to compare the luxury market, LVMH stock has dropped over 30% from its tops, even more than Nasdaq or S&P. Watches actually haven't dropped that much imo.

I think the incredible run in the stock, crypto, and real estate markets created a lot of wealth for people who otherwise wouldn't have invested without the crazy pandemic sparked run. Many of those people started buying luxury items at mass scale, thus creating the stratospheric prices we see in luxury items like watches. It'll be interesting to see how these people react to the decline in these asset classes. The wealth affect is a scary thing.
My guess is that consumption of luxury goods will recede and prices will get back to some sense of normalcy. I for one have learned over the years from these cycles and am waiting with dry powder to deploy when things go on sale.

[HMHM]

I only hope that Richard Mille is available with 10% discount at the AD!

[911AP]

Originally Posted by mickyd329

I think the incredible run in the stock, crypto, and real estate markets created a lot of wealth for people who otherwise wouldn't have invested without the crazy pandemic sparked run. Many of those people started buying luxury items at mass scale, thus creating the stratospheric prices we see in luxury items like watches. It'll be interesting to see how these people react to the decline in these asset classes. The wealth affect is a scary thing.
My guess is that consumption of luxury goods will recede and prices will get back to some sense of normalcy. I for one have learned over the years from these cycles and am waiting with dry powder to deploy when things go on sale.

The time is now. Use that dry powder. Buy crypto, buy watches, buy everything. The money isn't evaporating. It's still there.

[pam66]

Originally Posted by DVR

I live in the heart of the EU and do worry a little but nothing like you. Planning to buy at least 3 watches this year. And the war, far away, is not going to stop me.

Following the Dutch and German watch forums nobody seems worried much. The new arrivals (NA's) keep coming as before.
It looks you are in a different Europe than I am.

You know, the financial crisis from 2008 got me more worried.
And we survived that quite well too. Always look on the bright side. Try, it helps. We all have to die someday.

the financial crisis in 2008 was not due to a war like the one we have going on now with potential (i say potential!) to go nuclear. if you read history books you will find that many devastating wars were started when some party in a regional small scale conflict made a minor-looking mistake, which escalated all the way.

[ezinhk]

Originally Posted by Fifteen

Do not buy grey. Wait for the avalanche to hit and buy at retail or even lower. I expect prices to fall gradually the next 3-4 months and likely take a dive this fall or winter

I agree and will get ugly going forward.

On the other hand, may be an opportunity to acquire certain pieces...Journe or application PP in particular :)

[DonLee]

Originally Posted by 911AP

The time is now. Use that dry powder. Buy crypto, buy watches, buy everything. The money isn't evaporating. It's still there.

Funny, in the 2 days after you posted this, the crypto market dropped ~25%. Some coins dropped over 50%.


2 weeks ago you said the market is still crazy hot and that prices have not dropped at all. this week you said it's oversold and it's time to buy the dip already.

[DVR]

Originally Posted by DonLee

Funny, in the 2 days after you posted this, the crypto market dropped ~25%. Some coins dropped over 50%.


2 weeks ago you said the market is still crazy hot and that prices have not dropped at all. this week you said it's oversold and it's time to buy the dip already.

Crypto, tech and a lot of the stock market is just mostly air. You just need a lot of 'believers'

"Tesla is now worth as much as the combined market cap of the nine largest carmakers around the world, including automotive giants like Volkswagen and Toyota.

Yet Tesla makes up less than 1% of global car sales."

This says it all, there is still A LOT of room to go to the bottom.
Invest in yourself, in your property and live.

And watches? It's about time the scalpers and flippers leave our hobby.

[911AP]

Originally Posted by DonLee

Funny, in the 2 days after you posted this, the crypto market dropped ~25%. Some coins dropped over 50%.


2 weeks ago you said the market is still crazy hot and that prices have not dropped at all. this week you said it's oversold and it's time to buy the dip already.

And the day after that it bounced right back up again. I don't invest for the short term. I'm about the long term strategy. If you think crypto 5 years from now or even 2 years from now won't be higher if you put 50k in it today, Idk what to tell you. It's not going away. Plus I don't care for the numerous stupid coins out there. I'd only focus on Bitcoin and Ethereum. Maybe Solana and Cardano too if you want to really speculate. The rest are nonsense. Anything that shoots up 8x-20x per year you don't expect to drop 25%-30% when the world markets are crumbling? That's nothing. It's an insanely volatile market. That's why you get in and just sit for the next wave to catch.

Watches long term I have no clue. But short term, wait till China, Ukraine, and all of this other stuff finishes before you judge. I don't have a crystal ball to tell you when these things will stop, but the market will rebound once they do. Crypto follows the stock market. The stock market will continue to drop as long as China and Ukraine continues. When they resolve, watch what will happen to all markets...