Rolex bubble

[Nm26]

Do we think we are in a current bubble? With the fed continuing to print and current world situation, are these secondary prices sustainable?

[Polarexplorerii]

Ibtl

[SDR581]

I think this is the new normal for this luxury brand. It was only a matter of time.

The Rolex name alone is so strong even a recession won't hurt prices.

[Nm26]

Originally Posted by SDR581

I think this is the new normal for this luxury brand. It was only a matter of time.

The Rolex name alone is so strong even a recession won't hurt prices.

Yeah I think the demand will always be there since allocations for hot pieces are slim. Was curious to hear the insight from the community

[jets]

It’s like Bitcoin. The only reason it has value is because people agree that it does. As long as Rolex tightens supply this is how it will be.

If you’re asking me I’d say Rolex is exactly where they want to be. No more discounts. No more dust collecting watches in showcases. PM pieces are moving like they never have. They even changed the warranty cards so a person can’t see the store it was bought or even the country. Now when it’s bought second hand another persons name is no longer in it. Demand is meteoric. So yeah if it is a bubble it’s made of see-through iron.


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[Apheaven]

My answer is no. For what it’s worth, in the 30 plus years I have been collecting the only quasi dip in pricing I have seen occurred once after the 2008 (Great Recession). I have not seen any form of a ‘correction’ ever take place. With the advent of social media (IG) and the respective focus on high end watches, I really can’t say things are going to change from a pricing perspective. As I have never seen so many people involved in this hobby, per se, as now. It is possible prices flatten for periods, but I personally don’t see them going down as a whole. Yes, certain hype pieces might come down a bit but overall they are still way up. Also there are so many people who have spent a lot of money at “market” pricing (as opposed to retail) that rather hold on rather than sell to take a loss - presuming they wanted to. A lot of people buying by trading up, etc. while more people are entering the market everyday. I actually find it all very interesting from a case study perspective. So…I do not believe this is a bubble…especially in the traditional sense of the word.


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[LVx2]

Logan Paul wears a 5 million dollar Pokémon card around his neck.

[akili_2000]

Not a very good idea to discuss

[101031-28]

Feels like a bubble to me but I doubt prices will come down unless globally we enter some sort of total collapse/apocalyptic scenario.

[JRell]

If you buy at MSRP and love your watch, who cares?

[beshannon]

Originally Posted by Nm26

Do we think we are in a current bubble? With the fed continuing to print and current world situation, are these secondary prices sustainable?

Sure, why not

[allen993]

Originally Posted by JRell

If you buy at MSRP and love your watch, who cares?

But nobody's doing that now...

[jamerson80]

Originally Posted by Nm26

Do we think we are in a current bubble? With the fed continuing to print and current world situation, are these secondary prices sustainable?

With inflation set upon us, why would it go back down? The dollar's worth continues to drop, so it makes sense that prices will always be high. Maybe it is the pessimist in me, but when has meaningful currency deflation ever occurred for us?

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[Rado63]

Originally Posted by Nm26

Do we think we are in a current bubble? With the fed continuing to print and current world situation, are these secondary prices sustainable?

In one respect you are completely correct. The availability of money in the economy is the reason for prices increasing on the secondary market as world wide economies have created an affluent middle class with a desire to buy luxury. Is it sustainable? Since all of our economies seem to require low cost of capitol and available credit then this is what we have to work with until things become over valued and the market corrects.

[TheWatchmen]

Correct on printed money causing prices to rise, sometimes astronomically. The value of your dollar is simply less.

With regard to a market correction with Rolex in particular, not likely unless there’s another recession - in that case the prices will flatten and maybe dip, but rebound again. Reason being: a lot of people who can afford something like a luxury watch will fare the recession better and just hang on to the watches until its over.

Also, there are literally just a lot more people on the planet than there was 15 years ago. A lot of those people want nice things. Rolex watches are nice things, they are a symbol of success for many (like it or not).

Just my opinion.

[askdanny]

Rolex makes roughly 1 million watches and we don't know how big the demand is. 4 million? 20 million? Obviously the demand shrinks as price goes up. The number of people in the market for a 40K Daytona, for example, is a lot less than a $14K Daytona.

I spoke to a Rolex representative during the last Watches and Wonders last week. She has been at Rolex for nearly a decade. And I've known her since the last Baselworld, in 2019.

Of course after the presentation, I asked her about the supply situation. She gave me the standard line that it is not a Rolex strategy to reduce supply...

What the public would like to know, I politely responded, is whether there is a light at the end of the tunnel; that maybe not this year, but the next, we'll have some pieces at ADs; that we'll be back to semi-normal and crazy prices on the grey will subside. In short, is Rolex catching up to the demand... a bit?

She said -- and she repeated several times during our conversation -- that the demand is enormous ("la demande est énorme"), and they have physical limitations: She said that Switzerland is not a huge country like the US, and therefore it is challenging to even find room to expand, to build a new manufacture. Rolex doesn't want to manufacture their watches outside of Switzerland, in neighboring countries like France or Germany; it wants to remain a Swiss company. Still, it doesn't have room to grow. Then she said something profound: "I don't think supply will ever catch up to demand."

Now, I'm just a guy on a forum, and I can totally be making that up. I won't be publishing this on Jake's Rolex World because I felt she was giving me a personal opinion, not a on-the-record statement.

So at best, a price correction. A bubble, no. Definitely not. Current price stagnation are not representative: March is always slow. Taxes are due, there is no holiday, people save their cash for new releases and are still recovering from Christmas. It'll start picking up in the summer again.

[MHB]

No it's another asset class, like fine art only you don't need a massive amount of capital to get a foot in the door.

[edisonstar23]

Originally Posted by LVx2

Logan Paul wears a 5 million dollar Pokémon card around his neck.

Who tf is that guy?


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[yonexsp]

watch charts is interesting to see, there is a clear dip and fall off on prices for all brands, not just Rolex. Things are very uncertain in the world, and there does not seem to be much in the way of any good hedge against inflation right now. Its very weird

[TswaneNguni]

Doesnt matter what happens,there is plenty money in the world for the +/- 830,000 they create a year .

Look at it this way,if a younger generation buys Rolex ,there is hope for the world .

[askdanny]

Originally Posted by TswaneNguni

Look at it this way, if a younger generation buys Rolex, there is hope for the world.

Profound!

[onnomon]

As long as Rolex (and other well-publicized brands) are considered an asset class aka store-of-value, along with an inflationary environment, the price will not drop. Couple this with ever more people realizing it can function as an asset class such new demand drives prices further upwards. And then there's the flurry of newcomer small-time "watch brokers" stirring up the prices as they trade to each other and pass it on to the aforementioned "people". And then there's the social media hyper factor.. In short, they ain't going back to MSRP in my foreseeable future.

[ugoblue]

Rolex demand is driven by the "near rich" but prices have been moving into the "rich" category. I think the "near rich" have been able to chase them there by a lot of stock market and crypto gains in the past couple of years coupled with less competition from other expensive pastimes like travel. Once people have gotten a taste for high spending they like to keep doing it. And then they start to borrow-which in a high interest rate environment is like racing to a wall. I think we are well into the sustain with credit phase of the economy. Suddenly there will be a simultaneous realization by people that they have to de-leverage and pay off debts. So with income not matching inflation, funny money from the stock market gone, and more of the budget paying off debt - I would bet the market for luxury goods from the near rich is going to fall. People are going start passing on that piece their AD texts them about. Dealers will start lowballing flippers, and flippers will dry up. When people start selling assets to pay off debt - i.e. watches - the market will crater. And fast. I'd say 6 months and the pattern will be clearer - in 18 months Rolex stock will be much more common in the stores.

[htrap2294]

Originally Posted by ugoblue

Rolex demand is driven by the "near rich" but prices have been moving into the "rich" category. I think the "near rich" have been able to chase them there by a lot of stock market and crypto gains in the past couple of years coupled with less competition from other expensive pastimes like travel. Once people have gotten a taste for high spending they like to keep doing it. And then they start to borrow-which in a high interest rate environment is like racing to a wall. I think we are well into the sustain with credit phase of the economy. Suddenly there will be a simultaneous realization by people that they have to de-leverage and pay off debts. So with income not matching inflation, funny money from the stock market gone, and more of the budget paying off debt - I would bet the market for luxury goods from the near rich is going to fall. People are going start passing on that piece their AD texts them about. Dealers will start lowballing flippers, and flippers will dry up. When people start selling assets to pay off debt - i.e. watches - the market will crater. And fast. I'd say 6 months and the pattern will be clearer - in 18 months Rolex stock will be much more common in the stores.

Quoting this to check back in 18 months.

[dpt.calvin]

lol

[Pimpsy]

Originally Posted by Polarexplorerii

Ibtl

[904VT]

Originally Posted by Nm26

Do we think we are in a current bubble? With the fed continuing to print and current world situation, are these secondary prices sustainable?

You would think a bubble, but then what would be the alternatives for hard assets. Rolex says they are at max capacity, so if they are already producing max, they would have to cut PM and increase SS supplies to impact assuming ceteris paribus. It seems like the major catalyst outside would have to be if monetary policy tightens globally. Seems like that is a slim chance, I only see worse inflation coming as is now.

[JRell]

Originally Posted by allen993

But nobody's doing that now...

Nobody is buying at MSRP or nobody is buying to keep and wear/enjoy them? I know I do both and so do many others here. If I couldn’t get at msrp no way would I buy Rolex. If I didn’t love and enjoy them I wouldn’t even be on this forum.

[Doood]

Rolex is hot now, but it might not always be the in thing. Sure, there will always be Rolex fans and mechanical watch fans…and speculators and inflation.

For the watch lovers, buy what you like and and buy at MSRP.

[Harry-57]

Oh, this again. How original. And how predictable the outcome.