Strange happenings in Hong Kong - grey market dealers

[psm11]

Originally Posted by GS93108

I don't have much to add to this thread, but I don't like the fighting :)

That said, I've lost money on pretty much every watch I've ever sold, yet my wife still lets me buy them because they are NOT investments, they are for my pleasure.

One more thing, a couple of years ago AP was somewhat anonymous to non-watch interested people, I liked that - a lot. Just recently though I had to wire money to AP which I couldn't do online so I went to the bank. The young lady who processed my transfer saw the payee and the amount and immediately asked me if I was buying a watch! Maybe that's not unusual if you live in Beverly Hills or Mayfair, but I live in a quiet seaside town where I can walk around wearing any watch I care to with very little trepidation. I now also get asked about AP if I wear any AP logo golf shirts etc. Times have definitely changed - not necessarily for the better.

One final anecdote. There's a lovely lady at AP London, she's young and of course wears an AP. A few years ago she told me a story about being out with one of her girl friends who was wearing her father's Daytona - everyone was gushing over it. The AP lady was wearing her gold RO and it didn't get a second glance. There's no way that's happening today.

We can't predict the future but 6 months ago you had people asserting (as dogma) that prices would only continue to rise and look where we are now. Of course there are a ton of folks touting that the market is going to turn but guess what? Most of them are grey dealers who are scared shitless right now and want to pump the market back up. MODA, Chrono24, etc do not lie. Tons and tons of "exclusive" pieces are sitting despite price drop after price drop.

I agree that AP is more recognized by a lay person today than 5 years ago but I think, as one of the other posters discussed, that if you went to Pittsburgh (my hometown), Cincinnati, etc. more folks wouldn't know what a RO was than those who would. I am an attorney and have plenty of wealthy colleagues and maybe 1 or 2 are into watches and would know what a RO was. my fiancé comes from an extremely wealthy family and none of them knew what an RO was until we started dating lol.

[GB-man]

Originally Posted by psm11

We can't predict the future but 6 months ago you had people asserting (as dogma) that prices would only continue to rise and look where we are now. Of course there are a ton of folks touting that the market is going to turn but guess what? Most of them are grey dealers who are scared shitless right now and want to pump the market back up. MODA, Chrono24, etc do not lie. Tons and tons of "exclusive" pieces are sitting despite price drop after price drop.

I agree that AP is more recognized by a lay person today than 5 years ago but I think, as one of the other posters discussed, that if you went to Pittsburgh (my hometown), Cincinnati, etc. more folks wouldn't know what a RO was than those who would. I am an attorney and have plenty of wealthy colleagues and maybe 1 or 2 are into watches and would know what a RO was. my fiancé comes from an extremely wealthy family and none of them knew what an RO was until we started dating lol.

That’s not even a question in my opinion as another rust belter. People confuse their circle of a few thousand watch lunatics on IG with reality.

I also understand that the market for these watches isn’t made in middle america.

That said I’ll die on this hill that hype watches won’t just settle in at 2x msrp like many greys seem to want us to believe. People seem to not recall that there was a hype market in 2019 as well that included Instagram and a booming economy. The covid hockey stick movement in prices is what we are talking about being an aberration.

[Xerxes77]

Originally Posted by dmash

Again, with certainties, that a non-essential luxury good 'will' trade at 2-3x MSRP, not even just stabilizing as a used good for what you paid new (which in itself is unusual).

I really fail to understand how you quote Econ 101 but then make that statement as well.



Agree. Anybody claiming the AP market has stabilized is misinformed or simply not wanting to face reality. Quite frankly, NOTHING is selling secondhand for AP right now.

Thing are that all industries are in trouble now.
But I think you are losing one point of view. People see now watches like investment. Not need to have 3xMRSP. But have money with them.
Look at China money crisis when banks blocked money and nobody can get money. You think this people will keep money in bank or they want to buy assets?
Not only Instagram or other create this situation. Instability and people low trust in bank system also.
I am an old AP fan. I remember in 2014 when they release new AP ROO I buy Vampire model with 22.400€ and in 2 months I found on Chrono24 many pieces with 15-17000€ new.
I don’t forgot this times. But things are different now. On that time on Bucherer Wien was all Nautilus model on the windows…..
In 2018 I can buy in Barcelona Aquanaut 5167 gold and I was there first time.
Now you can ask but your question will have a ironic answer.
Nobody knows how and what will be….
Today I read a quote on Patek section when other members talk about 5712 and 5726 Nautilus discontinued and Patek will continue only in precious metals.
If this happens will make AP even more stable in value in my opinion.

[dchang81]

I dunno. I'm not that old at least I don't think I am. But every time people start saying this is the new norm, new paradigm the more it ends up being the same thing.

[aa909]

Originally Posted by dchang81

I dunno. I'm not that old at least I don't think I am. But every time people start saying this is the new norm, new paradigm the more it ends up being the same thing.

Bingo

[dmash]

Originally Posted by GB-man

That’s not even a question in my opinion as another rust belter. People confuse their circle of a few thousand watch lunatics on IG with reality.

I also understand that the market for these watches isn’t made in middle america.

That said I’ll die on this hill that hype watches won’t just settle in at 2x msrp like many greys seem to want us to believe. People seem to not recall that there was a hype market in 2019 as well that included Instagram and a booming economy. The covid hockey stick movement in prices is what we are talking about being an aberration.

I agree. I’ll also die on the hill that I’ll refrain from buying any model, grey, above MSRP instead of from an AD. I’d happily stay content with what I have now before I play that card. It’s not fun at that point, it’s a game for suckers instead of bringing a smile.

I mean I get it, guys with 7 figure annuals, an extra $25-$50k isn’t a big deal to get immediate gratification. It’s a little nutty to me though, hearing about guys in my age range (30s) forking out an extra $30k for a Daytona and pulling from a multi year savings account. Makes me scratch my head something serious.

[911AP]

Originally Posted by dmash

As a final tidbit...

You're grossly overestimating the buying population for luxury watches. If we're talking stateside, outside of NYC/LA/Miami and a few others, I can almost guarantee you if I polled 100 random passerbys to identify a Royal Oak or a Nautilus they wouldn't even have a clue.

Another facet I'm seeing overblown on these niche areas of the internet like forums, followers on IG watch pages, etc. 'Every' body doesn't know AP/PP along with the models and prices now. Just old school horologists and newfound watch bros. Let's get real. Another reason it's absolutely insane to compare any aspect of this to a housing market.

AP makes 40-45k watches. Out of that.. how many are ROs? There are 47 millionaires globally (according to google). That's the supply of people who could easily afford this watch. You tell me how many of that 47m know AP or patek today compared to 2 years ago? Forget that there are many people who aren't even millionaires whom have multiple AP or patek watches.

2 years ago I could wear my APs and NOBODY knew what it was. I can't even wear it one time in public now without getting stopped by someone who recognizes it. I don't even wear them in certain areas now because someone will kill me for the watch I wear because how easily it is to recognize it. I never had that fear 2 years ago. I wore my watches in THE WORST neighborhoods without fear because nobody knew what it was. Social media has been the best marketing for both of these brands than they could ever pay for. Then on top of that the owners marketed further for them.

It doesn't matter if some random person in middle American who makes less than 100k a year knows what an AP is. What matters is that today there are more people who have the means to buy an AP, know about the brand than did 2 years ago. That means demand has fundamentally increased. The supply has barely changed. If anything the supply is worse now because of the Code. AP made 40k watches and majority was in the royal oak. But now the code came along. What does that mean? They have to cut production from every other line to make room for the Codes. Supply is going down, demand is going up and now on top of that NO MORE DEALERS GIVING 30% DISCOUNTS.

All of this leads to prices staying above MSRP. The day this stops is the day they decide to significantly increase the supply of watches or people decide they no longer like AP. Speculators may have made these watches go 5x retail, and that was 100% not sustainable. But, them being over retail are here to stay until as I said, supply goes up or the taste changes.

[psm11]

Originally Posted by 911AP

AP makes 40-45k watches. Out of that.. how many are ROs? There are 47 millionaires globally (according to google). That's the supply of people who could easily afford this watch. You tell me how many of that 47m know AP or patek today compared to 2 years ago? Forget that there are many people who aren't even millionaires whom have multiple AP or patek watches.

2 years ago I could wear my APs and NOBODY knew what it was. I can't even wear it one time in public now without getting stopped by someone who recognizes it. I don't even wear them in certain areas now because someone will kill me for the watch I wear because how easily it is to recognize it. I never had that fear 2 years ago. I wore my watches in THE WORST neighborhoods without fear because nobody knew what it was. Social media has been the best marketing for both of these brands than they could ever pay for. Then on top of that the owners marketed further for them.

It doesn't matter if some random person in middle American who makes less than 100k a year knows what an AP is. What matters is that today there are more people who have the means to buy an AP, know about the brand than did 2 years ago. That means demand has fundamentally increased. The supply has barely changed. If anything the supply is worse now because of the Code. AP made 40k watches and majority was in the royal oak. But now the code came along. What does that mean? They have to cut production from every other line to make room for the Codes. Supply is going down, demand is going up and now on top of that NO MORE DEALERS GIVING 30% DISCOUNTS.

All of this leads to prices staying above MSRP. The day this stops is the day they decide to significantly increase the supply of watches or people decide they no longer like AP. Speculators may have made these watches go 5x retail, and that was 100% not sustainable. But, them being over retail are here to stay until as I said, supply goes up or the taste changes.

I’ll say it again — there are ROOs (new model) already going for under MSRP. Yes maybe some ROs will remain above retail but as AP increases prices, MSRP is going to catch up to grey prices. 15500s (and whatever the next model will be) are already almost $30k MSRP. In another year that could go to $35k MSRP and there are 15500s being sold for close to that price already and many that are still not selling despite price reductions.

[VogelPhoenix]

Originally Posted by dmash

As a final tidbit...

You're grossly overestimating the buying population for luxury watches. If we're talking stateside, outside of NYC/LA/Miami and a few others, I can almost guarantee you if I polled 100 random passerbys to identify a Royal Oak or a Nautilus they wouldn't even have a clue.

Hm, NYC/LA/Miami, interesting how that coincides with the places where one can actually buy an AP.

In the end, AP needs a few hundred customers per boutique per year. They embarked on the boutique concept before things went crazy, so presumably they felt comfortable they could develop the required customer base in ~normal times. I think there's a good chance AP will do ok if things return to the old normal. Some of the grey dealers, maybe not so much.

[VogelPhoenix]

Originally Posted by psm11

I’ll say it again — there are ROOs (new model) already going for under MSRP. Yes maybe some ROs will remain above retail but as AP increases prices, MSRP is going to catch up to grey prices. 15500s (and whatever the next model will be) are already almost $30k MSRP. In another year that could go to $35k MSRP and there are 15500s being sold for close to that price already and many that are still not selling despite price reductions.

Maybe AP can then finally roll out their long-rumored CPO program and bring some sense to the used market.

[psm11]

Originally Posted by VogelPhoenix

Maybe AP can then finally roll out their long-rumored CPO program and bring some sense to the used market.

I hope so! I am all in for that!

[dmash]

Originally Posted by VogelPhoenix

Maybe AP can then finally roll out their long-rumored CPO program and bring some sense to the used market.

IF the market stays hot, this would be a fantastic way for AP to capitalize as well. 'If it's just not working out, we won't punish you if you change your mind a few months after purchase. Just sell back to us for what you paid, not the inflated grey market price'.

AP gets a watch back under market. You're not blacklisted as a client for having a change of heart. Win Win

[psm11]

Originally Posted by dmash

IF the market stays hot, this would be a fantastic way for AP to capitalize as well. 'If it's just not working out, we won't punish you if you change your mind a few months after purchase. Just sell back to us for what you paid, not the inflated grey market price'.

AP gets a watch back under market. You're not blacklisted as a client for having a change of heart. Win Win

And give those who can’t get a new piece from the boutique and opportunity to start the relationship and build spend history on pieces they actually want.

[Mini2]

Prices up and down like a hookers knickers can we just be friends haha

[SMD]

Lots of shite being spewed in this thread. Conkers nailed this way back.

Most of the comments on this thread are exhibit a for everything that is wrong with this hobby at the moment. My watches have gone down in value no doubt. The magnitude? I don’t how, how long is a piece of string? I am not selling my open worked, whether it’s worth 200, 100, or 50.

[psm11]

Originally Posted by SMD

Lots of shite being spewed in this thread. Conkers nailed this way back.

Most of the comments on this thread are exhibit a for everything that is wrong with this hobby at the moment. My watches have gone down in value no doubt. The magnitude? I don’t how, how long is a piece of string? I am not selling my open worked, whether it’s worth 200, 100, or 50.

What comments are you referring to? I think the price drops are good news if you only care about owning the watch. The whole investment thing is horseshit. I’d just like to own the piece I want and enjoy it. I don’t care if it lost 99 percent of its value the second I bought, I just want to enjoy wearing it.

[epicurus]

Originally Posted by psm11

What comments are you referring to? I think the price drops are good news if you only care about owning the watch. The whole investment thing is horseshit. I’d just like to own the piece I want and enjoy it. I don’t care if it lost 99 percent of its value the second I bought, I just want to enjoy wearing it.

[sigma089]

Originally Posted by dchang81

I dunno. I'm not that old at least I don't think I am. But every time people start saying this is the new norm, new paradigm the more it ends up being the same thing.

Bingo, great post.

For some reason the market bubble hasn't burst yet.

I for one believe that this has to do with the fact that most newbies haven't been confronted with the harsh reality that the money they have "invested" in watches is gone. I think this has mostly to do with the fact, that most haven't tried realizing their "gains" yet. Many of us who have been into watches for a long time are used to losing money on watches. New "collectors" aren't. We have been walking out of ADs down on most transactions for ages. I know I have and I knew I would. I never spend 3x retail on a Daytona or an Aquanaut though.

Another reason why the bubble seems to be intact still is that greys apparently aren't hurting enough. Reason for that might be that they still have money to burn from the times when they were making absurd amounts on in production models, or with them just refusing to acknowledge the reality that no one in their right mind (them included) is buying. I think a lot of them are overleveraged and will need to start selling at some point.

Once greys start liquidating, all things watches will drop rapidly. Buyer base will return to pre-hype conditions, with A LOT less demand. Everyone who got burned on their Rolex, PP and AP investment pieces won't go anywhere near watches in the foreseeable future.

Prices were driven up by IG and greed. From what I experienced first hand many newbies who became interested in watches over the last few years bought them as status symbol, because money supply was plenty AND they were priced out of many other assets such as real estate, despite them making good money. Now the money is gone.

What I also think that currently might be overlooked by proponents of stabilizing prices is the following: the general outlook on luxury items might change due to the recession. Luxury items might very well be frowned upon by large swaths of society due to many people struggling to make ends meet, especially if IG moves on.

Regardless, I sincerely hope and believe that willing enthusiasts will be able to buy basically everything at MSRP in 2023. Friends and family will again think we're crazy for our interest in watches. I can't wait.

[Mini2]

Regardless to what is happening ive been waiting nearly 4 years and not got a single bean haha

[OH2004]

Luxury market is not going to collapse because people that buy very high end items had very little impact on this downturn. 9 to 5 people will be impacted the most. Try buying a Bugatti sold out until 2025. SF90 or other exclusive Ferraris they don’t even take your name.

Originally Posted by sigma089

Bingo, great post.

For some reason the market bubble hasn't burst yet.

I for one believe that this has to do with the fact that most newbies haven't been confronted with the harsh reality that the money they have "invested" in watches is gone. I think this has mostly to do with the fact, that most haven't tried realizing their "gains" yet. Many of us who have been into watches for a long time are used to losing money on watches. New "collectors" aren't. We have been walking out of ADs down on most transactions for ages. I know I have and I knew I would. I never spend 3x retail on a Daytona or an Aquanaut though.

Another reason why the bubble seems to be intact still is that greys apparently aren't hurting enough. Reason for that might be that they still have money to burn from the times when they were making absurd amounts on in production models, or with them just refusing to acknowledge the reality that no one in their right mind (them included) is buying. I think a lot of them are overleveraged and will need to start selling at some point.

Once greys start liquidating, all things watches will drop rapidly. Buyer base will return to pre-hype conditions, with A LOT less demand. Everyone who got burned on their Rolex, PP and AP investment pieces won't go anywhere near watches in the foreseeable future.

Prices were driven up by IG and greed. From what I experienced first hand many newbies who became interested in watches over the last few years bought them as status symbol, because money supply was plenty AND they were priced out of many other assets such as real estate, despite them making good money. Now the money is gone.

What I also think that currently might be overlooked by proponents of stabilizing prices is the following: the general outlook on luxury items might change due to the recession. Luxury items might very well be frowned upon by large swaths of society due to many people struggling to make ends meet, especially if IG moves on.

Regardless, I sincerely hope and believe that willing enthusiasts will be able to buy basically everything at MSRP in 2023. Friends and family will again think we're crazy for our interest in watches. I can't wait.

[911AP]

Originally Posted by sigma089

Bingo, great post.

For some reason the market bubble hasn't burst yet.

I'm a broken record lol. Supply and demand.....Supply is still extremely low. Demand is still high.

[GW44]

Originally Posted by Mini2

Regardless to what is happening ive been waiting nearly 4 years and not got a single bean haha

What new AP are you waiting for/wanting to buy?

[texasmade]

Originally Posted by 911AP

I'm a broken record lol. Supply and demand.....Supply is still extremely low. Demand is still high.

True but demand can go down pretty quick. We all saw how fast demand rose during Covid so there's nothing stopping demand from going the other way.

[sigma089]

Originally Posted by 911AP

I'm a broken record lol. Supply and demand.....Supply is still extremely low. Demand is still high.

Personally I do not believe that that's the case.

Sure, some people are buying at MSRP, but that's it. ADs and boutiques are calling through their backlog imo, but who knows. Time will tell.

I too believe that people who have been buying watches (and Bugattis etc.) before the hype will continue to do so. Many who have started buying the last few years and who have contributed to this immense increase in demand will not, however.

[Mini2]

Originally Posted by GW44

What new AP are you waiting for/wanting to buy?

New AP I asked for a 15400 then its replacement but was guided towards maybe a code being a good starting point when they first appeared in 2019 but was not a fan tbh

Hearing people getting jumbos as first purchases in the last week fills me with hope and with how markets across the world have recently reacted maybe I might get a phone call when they have gone through everyone who might not want one anymore

[Mini2]

Originally Posted by sigma089

Personally I do not believe that that's the case.

Sure, some people are buying at MSRP, but that's it. ADs and boutiques are calling through their backlog imo, but who knows. Time will tell.

I too believe that people who have been buying watches (and Bugattis etc.) before the hype will continue to do so. Many who have started buying the last few years and who have contributed to this immense increase in demand will not, however.

Hope they call me soon

[GW44]

Originally Posted by Mini2

New AP I asked for a 15400 then its replacement but was guided towards maybe a code being a good starting point when they first appeared in 2019 but was not a fan tbh

Hearing people getting jumbos as first purchases in the last week fills me with hope and with how markets across the world have recently reacted maybe I might get a phone call when they have gone through everyone who might not want one anymore

I think it was one person maybe getting a Jumbo straight off…..I’d let that one go if I was you

A ROO is going to be a better “in” here in the Uk IMHO.

[VogelPhoenix]

Originally Posted by sigma089

Personally I do not believe that that's the case.

Sure, some people are buying at MSRP, but that's it. ADs and boutiques are calling through their backlog imo, but who knows. Time will tell.

I asked the SAs at my recent AP house visit if there had been any change in demand and the answer was no. Would be interesting if someone heard anything different elsewhere.

[texasmade]

Originally Posted by VogelPhoenix

I asked the SAs at my recent AP house visit if there had been any change in demand and the answer was no. Would be interesting if someone heard anything different elsewhere.

What do you expect them to say?

"Yes demand is softening and now we're calling more clients to make sales."

The SA is always going to say demand is strong to convince ppl to buy whatever becomes available.

[dmash]

Originally Posted by texasmade

What do you expect them to say?

"Yes demand is softening and now we're calling more clients to make sales."

The SA is always going to say demand is strong to convince ppl to buy whatever becomes available.

Lol I can’t believe you had to actually type this out