What will burst the Rolex bubble...

[HelloMelo]

https://www.fratellowatches.com/what...-rolex-bubble/


Pretty good read. Just wanted to share

[taitun4life]

Mmmmm…..

[francoamerican]

Buying Rolex as inflation hedge is so dumb.

[brandrea]

I didn’t read the article (maybe I should have), but my stance has always been that you should never buy a luxury product like a watch with the expectation that it will hold a store of value.

[JP.]

I've been following the whole "Rolex bubble / availability"-discussion for years.

Since I only care for 4- and 5-digit watches and I bought mine 10 years ago (save the 16570) I never really cared.

But all assets are in all time high. Classic cars, watches, apartments, houses, etc. and the inflation is pretty strong. Both in the US and the EU. FED has printed... what... 20 trillion?

I don't believe all of them are "gray market speculators". Many people are buying classic cars and watches just to put their money to something concrete... "safe haven from the inflation".

[mountainjogger]

From the article:

[A] watch is also a practical asset... A Rolex is like an international traveler’s check that gets accepted everywhere in the world. And what is good to understand is that, especially with a Rolex, there is a bottom when it comes to cash value. Right now, the market for Rolexes is booming, but if it ever stops doing that, the price you can get for your Rolex will never drop below a certain minimum. And that’s because traders will always be willing to buy your Rolex no matter the state of the economy.

I take issue with the concept of watches as assets. I also take issue with their argument that there is a floor for prices.

[sirC]

Originally Posted by mountainjogger

From the article:

[A] watch is also a practical asset... A Rolex is like an international traveler’s check that gets accepted everywhere in the world. And what is good to understand is that, especially with a Rolex, there is a bottom when it comes to cash value. Right now, the market for Rolexes is booming, but if it ever stops doing that, the price you can get for your Rolex will never drop below a certain minimum. And that’s because traders will always be willing to buy your Rolex no matter the state of the economy.

Complete BS

[Mystro]

Its the same predictions and disbelief of the Rolex market when Covid first started. Prophets on their soapbox declaring the end is near and give any data to support their narrative. People will believe what they want and buy what and when they want. No biggie. The only empirical reality that is undisputed is empty display cases greet everyone when walking into a AD. Most people buying luxury jewelry don’t consider them assets or investments.

[Harry-57]

Originally Posted by JP.

But all assets are in all time high. Classic cars, watches, apartments, houses, etc.

In the UK, property has been bonkers. It is now putting off prospective buyers and this will exert a brake on the market. Classic car values are falling. I was reading an article in Autocar last week - something like 20-25% down on two years ago.

[taitun4life]

Originally Posted by mountainjogger

From the article:

[A] watch is also a practical asset... A Rolex is like an international traveler’s check that gets accepted everywhere in the world. And what is good to understand is that, especially with a Rolex, there is a bottom when it comes to cash value. Right now, the market for Rolexes is booming, but if it ever stops doing that, the price you can get for your Rolex will never drop below a certain minimum. And that’s because traders will always be willing to buy your Rolex no matter the state of the economy.

I take issue with the concept of watches as assets. I also take issue with their argument that there is a floor for prices.

Agree with you 100%. Investors in the crypto Terra Luna also believed there was a floor until it went from $120 to 10cents. We’ll I guess that’s a floor too

Nice read and really just explains how so little people know or plan when it comes to money and investments

[dlrolex]

Look like the Rolex watch forum is now becoming a price up or down forum, mainly today because many think of Rolex watches to be little more than ££$$€€ objects and little more.

[JP.]

Originally Posted by Harry-57

In the UK, property has been bonkers. It is now putting off prospective buyers and this will exert a brake on the market. Classic car values are falling. I was reading an article in Autocar last week - something like 20-25% down on two years ago.

Maybe. Not classic Porsches though.

[TexEd]

I agree that Rolex watches and other high dollar watches can almost always be sold but those sales prices will always vary. The same can be said for luxury cars as they can also always be sold but the key is for what price? Again, the controlling factor is supply and demand, and the economy. Based on the current U.S. economy we are seeing real estate demand and prices starting to soften; and I believe the same effect can be seen in luxury watches and cars.

[Mystro]

Originally Posted by JP.

Maybe. Not classic Porsches though.

I have a garage of air cooled 911’s collected over the last few decades. Market prices are only still going up as well as guys like me that have a few won’t sell them.

[sirC]

I will correct my assessment.
Won't drop below a certain minimum is a bit ambiguous. That minimum could be 10c on the dollar.

[JP.]

Originally Posted by Mystro

I have a garage of air cooled 911’s collected over the last few decades. Market prices are only still going up as well as guys like me that have a few won’t sell them.

You're a lucky guy. I wish I had a time machine and I would buy as many as possible.

[TswaneNguni]

Originally Posted by TexEd

I agree that Rolex watches and other high dollar watches can almost always be sold but those sales prices will always vary. The same can be said for luxury cars as they can also always be sold but the key is for what price? Again, the controlling factor is supply and demand, and the economy. Based on the current U.S. economy we are seeing real estate demand and prices starting to soften; and I believe the same effect can be seen in luxury watches and cars.

The cars on trickle chargers ,as a static display and the watches unworn in a place of safe storage .

Meanwhile,Apple and Toyota do the work ....

[TexEd]

Originally Posted by Mystro

I have a garage of air cooled 911’s collected over the last few decades. Market prices are only still going up as well as guys like me that have a few won’t sell them.

I was recently looking at the used 911 Turbo S. Prices are hovering at $279k.
Insane prices but I'm hoping the market begins to soften; but who knows.

[JP.]

Originally Posted by TexEd

I was recently looking at the used 911 Turbo S. Prices are hovering at $279k.
Insane prices but I'm hoping the market begins to soften; but who knows.

[Mystro]

Originally Posted by JP.

You're a lucky guy. I wish I had a time machine and I would buy as many as possible.

They don’t cost a lot to keep and maintain and that simplistic ownership experience is becoming extremely attractive compared to the new models. I did sell only one last summer for a obscene price. I probably could’ve got a little more $$ for it this summer.
My issue is I grew up club racing the 930’s owning two at a time when they were just fun track cars that tended to bite those that didn’t know how to drive them at speed. Todays Porsche market still has some bargains left but not in the top tier level of 911’s. This is because much like the Rolex Daytona market, those buyers can afford to pay top dollar and probably not feel it in their financial lifestyle. They want when they want it and will pay top dollar and never sell so they scoop up the really choice/rare low mileage vehicles.

Hint…look around in the 964 family.


This one is especially unique in my collection being all original “Commemorative” model and under 20k miles.

[GW44]

Originally Posted by Harry-57

In the UK, property has been bonkers. It is now putting off prospective buyers and this will exert a brake on the market. Classic car values are falling. I was reading an article in Autocar last week - something like 20-25% down on two years ago.

Not quite true about the classic car market in the Uk Harry. Those models that were over hyped and over inflated have, rightly, fallen back in the last 9 months.

But Autocar (Haymarket) really know next to nothing about the car market, classic or current and are so far divorced from the coalface market that you really need to ignore that.

For what it’s worth the 993 (in that “end game” thread) is one of those rare classic cars that is a) a true classic and b) still a totally brilliant car irrespective of one’s reference point.

[Turbo Racer]

Originally Posted by Mystro

They don’t cost a lot to keep and maintain and that simplistic ownership experience is becoming extremely attractive compared to the new models. I did sell only one last summer for a obscene price. I probably could’ve got a little more $$ for it this summer.
My issue is I grew up club racing the 930’s owning two at a time when they were just fun track cars that tended to bite those that didn’t know how to drive them at speed. Todays Porsche market still has some bargains left but not in the top tier level of 911’s. This is because much like the Rolex Daytona market, those buyers can afford to pay top dollar and probably not feel it in their financial lifestyle. They want when they want it and will pay top dollar and never sell so they scoop up the really choice/rare low mileage vehicles.

Hint…look around in the 964 family.


This one is especially unique in my collection being all original “Commemorative” model and under 20k miles.

I love you’re targa! Just an incredible looking car inside and out! I hope to own an air cooled 911 one day.

[mountainjogger]

Originally Posted by JP.

I've been following the whole "Rolex bubble / availability"-discussion for years.

Since I only care for 4- and 5-digit watches and I bought mine 10 years ago (save the 16570) I never really cared.

But all assets are in all time high. Classic cars, watches, apartments, houses, etc. and the inflation is pretty strong. Both in the US and the EU. FED has printed... what... 20 trillion?

I don't believe all of them are "gray market speculators". Many people are buying classic cars and watches just to put their money to something concrete... "safe haven from the inflation".

J.P., I have followed your reviews for a while. Great style but even greater knowledge base.

My concern is that the majority of people on this forum that look at watches as investments do not have your level of expertise. Many think they do. But most do not. And that can be a dangerous combination - lacking knowledge and then investing in watches are cars with the bandwagon belief that they will all continue to rise.

Just my opinion. And great pics by the way.

[jarecki]

Originally Posted by Mystro

I have a garage of air cooled 911’s collected over the last few decades. Market prices are only still going up as well as guys like me that have a few won’t sell them.

Yes, but that’s because “they don’t make them anymore”. Not the case with most modern Rolex watches…

Great car by the way!

[Njkdog]

Originally Posted by francoamerican

Buying Rolex as inflation hedge is so dumb.

It’s not dumb, it’s d*ck. There’s a difference. It’s actually kind of smart, because if your dollars are worthless tomorrow, at least now you have a few Rolexes rather than worthless pieces of paper. I would just feel guilty about doing it. Personally I use silver and gold as hedges, especially with silver so cheap right now

[uniqueMR]

Demand & Supply

[Chewbacca]

My lunch at Taco Bell.

[francoamerican]

Originally Posted by Njkdog

It’s not dumb, it’s d*ck. There’s a difference. It’s actually kind of smart, because if your dollars are worthless tomorrow, at least now you have a few Rolexes rather than worthless pieces of paper. I would just feel guilty about doing it. Personally I use silver and gold as hedges, especially with silver so cheap right now

It’s dumb because it requires overconcentration into a niche, largely unproven asset class with huge bid ask spread and high tax friction. There are much better hedges and it’s quite possible that if you pay todays market price for a basket of modern Rolex’s you end up losing more than the you lose by buying say ten year treasuries.

It also possible a lot of the assets are going to seem like model t cars and pocket watches in 20 years. Cars probably even more so than watches

[ninjin]

I think that all the discussions on the 'Rolex Bubble' need to take into account 2 different areas. The discontinued, whether recently or vintage and the current Rolex catalogue.

The discontinued/vintage side of the market has a finite number, so trades/sales can be made with the knowledge there are only a fixed number in circulation. Like trading art or as this thread has included, used/vintage cars. It's the same, it's a finite number.

I see the 'Rolex Bubble' as the current trend for paying over for a watch that you can buy brand new from the AD. Sure, it's not an easy process to get a new watch at MRRP but it can be done.

This bubble has indeed developed a hole and is slowly deflating since Feb 2022. I doubt it will burst, more shrivel up like a 4week old balloon.

[Hkspwrsche]

Originally Posted by brandrea

I didn’t read the article (maybe I should have), but my stance has always been that you should never buy a luxury product like a watch with the expectation that it will hold a store of value.

Agree