Global Econonmy and Rolex

[GoingPlaces]

Rolex will never beg anyone to buy a watch. Those days, if ever existent are long gone. They can easily control supply/production to maintain brand value. They have already started to do that regardless of the current economic climate. Additionally, no one knows for certain what is in store for the economy in the future.

[SFBAY]

Originally Posted by Ravager135

You know none of that for a fact. The middle class shrinking is a fact. Proven many times over. It has been happening for many years now prior to the current "shortage." Neither Rolex nor you knows anything about the tax brackets of the people purchasing their product. No one even knows how many watches Rolex actually makes. We make estimations. This idea that a sizeable portion of people in the US are floating on this economic bubble and that is directly tied to the availability of Rolex watches is tenuous at best. Getting a Rolex watch is only becoming a more difficult endeavor for most and this has been happening for a lot longer than 2 years.

We may need to agree to disagree here.

Correct, you know none of this as fact either. Let’s agree to disagree.

[Fort Rolex]

I think the Daytona, SkyD, SS BLRO will still be impossible regardless of downturn. Would be more felt in the other lines imo

[Ichiran]

Originally Posted by JacksonStone

I see it as apples to apples, because all authentic Rolexes in the market originate from ADs. If ADs don't get stock, ultimately that means the grays don't get stock. If grays have stock, that means ADs had it first. Even if it's coming from a different country, it still shows availability globally. If Rolex is shorting US ADs of stock in order to send it to different markets, that would explain a "shortage" domestically, but it doesn't mean Rolex is reducing supply globally to spike demand.

Additionally, we saw publication of Rolex UK's revenue for 2017, and it was at an all-time high, indicating there is no lack of sales. If supply were substantially down, why would sales be up? It can't all be Datejusts.

Agreed.

[SBC1986]

I am surprised that so many on the forum don't realize the economy goes up and down. And it has been going up for a very long time so what do they say about things that go up...?

Contrary to popular belief luxury goods do get hit in recessions; but most luxury companies are clever enough, and have enough cash stocked, to hold back supply so that they still seem in demand. Luxury type items are often hit in price point not volume. People go on vacation but cheaper vacations, they eat out but their check average drops because they bring their own wine. They buy Christmas gifts but don't go crazy. etc...

Rolex wont go under but gray sellers (who are currently hoarding stock and speculating), and small ADs will suffer. And maybe Rolex will go back to treating their customers well.

Also, many people who 'invested' in watches will have a bit of an awakening.

[ALF61]

Those who “invested” in stocks too. Under that set of circumstances Rolex will probably hold up their value just as good as Gold.

[SFBAY]

Originally Posted by ALF61

Those who “invested” in stocks too. Under that set of circumstances Rolex will probably hold up their value just as good as Gold.

Stocks go up and down but for those who have invested correctly, those values have far surpassed the potential increased financial value of a Rolex.

[ALF61]

Originally Posted by SFBAY

Stocks go up and down but for those who have invested correctly, those values have far surpassed the potential increased financial value of a Rolex.

If you have a crash like 2008 everything will halve in value and there will be no way you will say correctly invested at current levels, which is where we are at right now no matter what. Your 10K Rolex will hold its value better than any stock I am certain. A valuable good is better than any overpriced self fed paper stock, especially in companies that do not hold tangible assets.

[Sublovin]

Originally Posted by beshannon

My portfolio and my job have nothing to do with the price or availability of high end luxury jewelry.

And who will AD's be "begging"? Those who have no money? Your premise is deeply flawed.

That’s great for you, but to think luxury goods are not affected by the economy is foolish at best.

[SFBAY]

Originally Posted by ALF61

If you have a crash like 2008 everything will halve in value and there will be no way you will say correctly invested at current levels, which is where we are at right now no matter what. Your 10K Rolex will hold its value better than any stock I am certain. A valuable good is better than any overpriced self fed paper stock, especially in companies that do not hold tangible assets.

It may have halved in 2008 but it’s multiplied since.

[SFBAY]

Originally Posted by Sublovin

That’s great for you, but to think luxury goods are not affected by the economy is foolish at best.

What he said

[ALF61]

Originally Posted by SFBAY

It may have halved in 2008 but it’s multiplied since.

OK, hold on to your Rolex, it has multiplied as well, only not as much.

[ROLMARINER]

Originally Posted by Sublovin

That’s great for you, but to think luxury goods are not affected by the economy is foolish at best.

The correct point of view is that some luxury goods are affected by the economy, not all.

Would a Rolex Datejust 41 with an MSRP of $9,500 currently from greys at $9,000 be offered at MSRP plus a 15% discount? Yes.

Would a Rolex BLRO with an MSRP of $9,050 currently from greys at $18,000 be offered below that or down to MSRP? No.

While most Rolex models would see discounts if the economy slips, the demand for certain Rolex references will remain high because the supply will remain low and there are plenty of rich people who don't blink at a $18,000 ask.

[Calatrava r]

I think the current demand for Rolex steel sports is driven by an artificial shortage of supply by Rolex to respond to the very soft watch market we are in. (Patek is doing the same thing on all their models) Rather than have their watches discounted they are reducing supplies. The soft watch market is really driven by the never ending flow of people out of watches into connected devices not by what the economy does at this point unlike the 2008 downturn.

[SFBAY]

Originally Posted by ROLMARINER

The correct point of view is that some luxury goods are affected by the economy, not all.

Would a Rolex Datejust 41 with an MSRP of $9,500 currently from greys at $9,000 be offered at MSRP plus a 15% discount? Yes.

Would a Rolex BLRO with an MSRP of $9,050 currently from greys at $18,000 be offered below that or down to MSRP? No.

While most Rolex models would see discounts if the economy slips, the demand for certain Rolex references will remain high because the supply will remain low and there are plenty of rich people who don't blink at a $18,000 ask.

The economy hasn’t dipped yet. If it does, the BLRO certainly won’t be going for 18k and the rich folks will be able to purchase it at an AD for MSRP or a grey for Much less than 18k.

[ROLMARINER]

Originally Posted by Calatrava r

I think the current demand for Rolex steel sports is driven by an artificial shortage of supply by Rolex to respond to the very soft watch market we are in. (Patek is doing the same thing on all their models) Rather than have their watches discounted they are reducing supplies. The soft watch market is really driven by the never ending flow of people out of watches into connected devices not by what the economy does at this point unlike the 2008 downturn.

This. Required reading.

[SFBAY]

Originally Posted by ALF61

OK, hold on to your Rolex, it has multiplied as well, only not as much.

Fortunately, I think you and I both purchase Rolex for the love, not the investment.

[ROLMARINER]

Originally Posted by SFBAY

The economy hasn’t dipped yet. If it does, the BLRO certainly won’t be going for 18k and the rich folks will be able to purchase it at an AD for MSRP or a grey for Much less than 18k.

Nope.

You keep painting with a very broad brush, as if all Rolex owners are the same when we're not. Some of us are 70 and retired with substantial savings, some of us are 55 and trendy multi-millionaires, some of us are 40 and pinched by college savings, some of us are 30 and saving for a house, and some of us are 25 and just starting our careers.

Perhaps you identify with some of the less-well-off groups and view the world through that lens. What I can tell you is that the market could dip 50% tomorrow and it wouldn't make me think twice about dropping $18K on a Rolex I really wanted. And I'm not alone. Rolex has sold 20,000,000 watches in the past 20 years and I'm guessing another 10,000,000 were bought through the pre-owned market. That's a lot of Rolexes out there and a lot of owners who would gobble up the paltry 3,000 BLRO's being produced each year.

In a recession, Rolex will cut BLRO production and the wealthy $18K crowd won't be affected by any market dip. I can't say it any clearer than that.

[ALF61]

Originally Posted by SFBAY

Fortunately, I think you and I both purchase Rolex for the love, not the investment.

[dubins930]

This is some of the most asinine nonsense I’ve ever seen on this forum... good lord people

“Rolex madness”

[JacksonStone]

Originally Posted by ALF61

Those who “invested” in stocks too. Under that set of circumstances Rolex will probably hold up their value just as good as Gold.

Just so I'm clear, you're not actually claiming that, generally speaking, Rolexes make better investment vehicles than stocks, are you?

[SFBAY]

Originally Posted by ROLMARINER

Nope.

You keep painting with a very broad brush, as if all Rolex owners are the same when we're not. Some of us are 70 and retired with substantial savings, some of us are 55 and trendy multi-millionaires, some of us are 40 and pinched by college savings, some of us are 30 and saving for a house, and some of us are 25 and just starting our careers.

Perhaps you identify with some of the less-well-off groups and view the world through that lens. What I can tell you is that the market could dip 50% tomorrow and it wouldn't make me think twice about dropping $18K on a Rolex I really wanted. And I'm not alone. Rolex has sold 20,000,000 watches in the past 20 years and I'm guessing another 10,000,000 were bought through the pre-owned market. That's a lot of Rolexes out there and a lot of owners who would gobble up the paltry 3,000 BLRO's being produced each year.

In a recession, Rolex will cut BLRO production and the wealthy $18K crowd won't be affected by any market dip. I can't say it any clearer than that.

I appreciate your concern regarding my financial, however, I’m quite comfortable. I just look at the economy from a realistic POV and understand there are ebbs and flows that also impact Rolex. Rolex isn’t going anywhere (thankfully!) but they aren’t immune to the ebbs and flows. Rolex is currently at an unprecedented demand and nobody has seen it this way before.

[SFBAY]

Originally Posted by dubins930

This is some of the most asinine nonsense I’ve ever seen on this forum... good lord people

“Rolex madness”

Please elaborate, would love to hear your POV. I think the comments are fascinating and really enjoy seeing the different takes. I have tons of respect for people on this forum even if our opinions differ.

[ROLMARINER]

Originally Posted by SFBAY

I appreciate your concern regarding my financial, however, I’m quite comfortable. I just look at the economy from a realistic POV and understand there are ebbs and flows that also impact Rolex. Rolex isn’t going anywhere (thankfully!) but they aren’t immune to the ebbs and flows. Rolex is currently at an unprecedented demand and nobody has seen it this way before.

Apple produces 63,000,000 iPhone X’s per year.

Rolex produces 3,000 BLRO’s per year. Maybe 5,000. Twist my arm maybe 9,000.

There aren’t enough. Any way you want to state it, there aren’t enough. And there are substantially more than a couple thousand interested buyers, probably more like a couple of million.

Some references are indeed immune to ebbs and flows.

[ALF61]

Originally Posted by JacksonStone

Just so I'm clear, you're not actually claiming that, generally speaking, Rolexes make better investment vehicles than stocks, are you?

Definitely not, but the premise for a big fall in Rolex watches prices at least in this forum is tied to a stock market crash. IMO that would be the least of our worries and under such circumstances where the stock values might halve like in 2008 if there is a crash, then I think Rolex hot watches will retain their value than stocks. That is what people do in times of uncertainty is move their money to more tangible assets like gold and, well, maybe Rolex je je !!

[Speedbird-1]

Just read all this.
..........................I need a drink!

[dubins930]

Originally Posted by SFBAY

Please elaborate, would love to hear your POV. I think the comments are fascinating and really enjoy seeing the different takes. I have tons of respect for people on this forum even if our opinions differ.

People make up numbers about production, make up some Rolex scheme that places the current watch they own as the only thing not affected in economic downturn. People think the price of grey market watches are sustainable for decades to come because they paid x amount... guess who paid Msrp at the AD... they guy who just took you for 9k. Someone even put a list of brands that “we should worry about” during hard economic times... but not Rolex because of some mystery product reduction strategy that he made up. I feel like I’m taking crazy pills! Rolex madness

[BakerView]

Originally Posted by Lt Virgil Hilts

Just read all this.
..........................I need a drink!

The market is unpredictable.
Rolex is predictable....their value will go up and their inventory will be a tight secret.

Is the tide in? Time to hoist the sail.....

[JacksonStone]

Originally Posted by dubins930

I feel like I’m taking crazy pills! Rolex madness

Welcome to the Rolex bubble. It's not just a market; it's a place to live.

[Dlong]

Today the market officially hit correction territory. Down 10% off the high of 26,800. We’ll see how long this lasts or will it go lower.