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Old 24 April 2019, 02:43 AM   #31
EDL7
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Economic depression or WW3 will do it..
For those on the ego fantasy that the good times will never end..
Look out..
It wont take much to knock things out of kilter for Rolex..just 1 major disaster..
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Old 24 April 2019, 02:48 AM   #32
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It won’t.
X2. Those days are gone. I remember a few years ago when many on the forum thought that was the worst it could ever get. Now they wish they for those days. A $20K watch purchase isn't even a blip to the affluent regardless of the economy.
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Old 24 April 2019, 02:54 AM   #33
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House prices may have dropped in value in the wake of the 2018 recession, but they have not collapsed. The bubble was unsustainable and adjustment, was necessary. The madness did not vanish, it just got damped. People still can't afford to buy houses and are renting in increasing numbers (UK perspective).

I think the present situation is likely to be the new normal. Demand is still ramping up. Grey premiums are increasing. When all the people in the world who are buying all the hot Rolex models stop increasing in number, the waiting lists will still be long and the grey market will still be sky high. Production will not increase to fill the gap. At some point, demand may more closely match supply. I think we're talking many years, and possibly decades.

But who knows? Right now, what you see is normal. It won't stay like this because nothing ever does. It could get better or worse.
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Old 24 April 2019, 02:57 AM   #34
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X2. Those days are gone. I remember a few years ago when many on the forum thought that was the worst it could ever get. Now they wish they for those days. A $20K watch purchase isn't even a blip to the affluent regardless of the economy.
But the number of people of who can afford a $20k watch right now is probably higher than it's ever been. Pull the plug on the economy and these prices will tank.
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Old 24 April 2019, 03:03 AM   #35
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Till demand for Rolex SS model will be high and customer pay the premium price this will be the new normal.
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Old 24 April 2019, 03:07 AM   #36
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I do not see availably coming back on Rolex models in high demand until the overall watch market for SS sports watches tanks which it will at some point. It is the only segment of the watch market with any life left in it and that is only because of the artificial lack of supply. Had Rolex not cut production in late summer of 2017, all the models would be available today at nice discounts. Rolex knew and saw that coming and changed the equation by cutting supply. An added short-term benefit they are selling far more TT and PM. a win to them and their ADs.
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Old 24 April 2019, 03:12 AM   #37
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But the number of people of who can afford a $20k watch right now is probably higher than it's ever been. Pull the plug on the economy and these prices will tank.
Its never been the case. Way too much money out their regardless of the economy. As long as the Rolex reputation is sought after, there will always be enough money to buy them. There is a lot of affluent with really big money that $20k is a night out.
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Old 24 April 2019, 03:15 AM   #38
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X2. Those days are gone. I remember a few years ago when many on the forum thought that was the worst it could ever get. Now they wish they for those days. A $20K watch purchase isn't even a blip to the affluent regardless of the economy.
A few years from now these prices might seem cheap as well. Who knows how long it will last?

But for those that say this is the new normal, to me, means that prices can never go back down. I believe that to be false.
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Old 24 April 2019, 03:17 AM   #39
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Rolex has learned from Patek model regarding exclusivity and super low supply for certain references and has only reaped rewards of doing so. No way they change anything going forward.
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Old 24 April 2019, 03:18 AM   #40
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A lot of economic analysis focuses on the marginal participants. And while I concede that a recession won’t impact the 1% of the 1% in a way that would preclude them from making a purchase of a high end watch, you’re forgetting about the marginal buyer.

The folks that have to save up to make that purchase and forgo other things, will think long and hard about paying that much over list in a falling market an when their job and/or income may be at more risk. When your brokerage account is down 20% or more, and your bonus or income is down year over year, buying yet another Rolex to round out your collection may get deferred.

It’s a little easier to swallow the idea of paying 80% over MSRP for a grey market watch when the market seems to justify that price, and you have a job, and your financial assets are being marked up every day.

If there was ever a sign of a bubble, it’s when people capitulate and say “this is the new normal” and “it’s different this time”. It is the very mindset that causes a bubble.

There’s nothing that has really changed from a secular standpoint about the market for high-end/luxury consumer goods.

IMHO, the only thing that has really changed (in the medium term) is central bankers’ use of QE as monetary stimulus. Central bankers are trying to generate some inflation, and they haven’t been very effective so far - at least in as much as inflation is measured through CPI or PCE or other traditional metrics. What QE has inflated is asset prices where wealth has already been accumulated - stocks, bonds, real estate, art, and other ultra high end collectibles. So, I’d venture to say that as long as the economy is healthy, and as long as monetary policy stays accommodative (QE), then sure, this will continue. But, at some point (maybe years and years from now), there will be an economic bump in the road, and there will be repercussions and unintended consequences of experimental monetary policy. And this too shall pass.
This is a good answer.

Only thing I miss is the Asian economy angle. I think that is a what mainly drives demand, less supply in US and Europe is just a consequence.
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Old 24 April 2019, 03:20 AM   #41
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It wont. This is the new normal.

Anyone who talks of a bubble or 'tulips' or waiting for en economic downturn to make things 'normal again' is extremely ignorant.

It has been proven people will play this new game and pay these new prices, so there this is now the normal.
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Old 24 April 2019, 03:24 AM   #42
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Because watches are not must haves, once people realize that money can be better spent on other things that can really improve life qualities
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Old 24 April 2019, 03:25 AM   #43
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A lot of economic analysis focuses on the marginal participants. And while I concede that a recession won’t impact the 1% of the 1% in a way that would preclude them from making a purchase of a high end watch, you’re forgetting about the marginal buyer.

The folks that have to save up to make that purchase and forgo other things, will think long and hard about paying that much over list in a falling market an when their job and/or income may be at more risk. When your brokerage account is down 20% or more, and your bonus or income is down year over year, buying yet another Rolex to round out your collection may get deferred.

It’s a little easier to swallow the idea of paying 80% over MSRP for a grey market watch when the market seems to justify that price, and you have a job, and your financial assets are being marked up every day.

If there was ever a sign of a bubble, it’s when people capitulate and say “this is the new normal” and “it’s different this time”. It is the very mindset that causes a bubble.

There’s nothing that has really changed from a secular standpoint about the market for high-end/luxury consumer goods.

IMHO, the only thing that has really changed (in the medium term) is central bankers’ use of QE as monetary stimulus. Central bankers are trying to generate some inflation, and they haven’t been very effective so far - at least in as much as inflation is measured through CPI or PCE or other traditional metrics. What QE has inflated is asset prices where wealth has already been accumulated - stocks, bonds, real estate, art, and other ultra high end collectibles. So, I’d venture to say that as long as the economy is healthy, and as long as monetary policy stays accommodative (QE), then sure, this will continue. But, at some point (maybe years and years from now), there will be an economic bump in the road, and there will be repercussions and unintended consequences of experimental monetary policy. And this too shall pass.

Very solid input. Much better than "this is the market now" answers people are giving who dont want their watch values to ever go back down.
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Old 24 April 2019, 03:39 AM   #44
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When the next recession hits, most people will not be pursuing Rolex let alone grey Rolex with high mark ups. Secondary market will be flooded by SS sports models and maybe at first the prices will still be inflated... but wait a year or so, the prices will come down. Rolex can restrict production as much as they want, but there are literally millions of SS models in private hands and those will surface during economic downturn.
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Old 24 April 2019, 03:58 AM   #45
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My take on this is Rolex has figured out a substantial way to increase sales and profits (PM's + Tudor) through manufactured exclusivity and barring an economic downturn, this practice will remain indefinitely.

Tell me one sane CEO that would reverse course on this model.
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Old 24 April 2019, 04:05 AM   #46
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Seems like TRF is split between this is the new normal and one day will get back to normal. I guess we wait and see till whatever whenever happens. I will continue to enjoy looking at the time on my wrist and seeing the crown.
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Old 24 April 2019, 04:05 AM   #47
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“It is different this time” has always been incorrect


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Old 24 April 2019, 04:08 AM   #48
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No it wont, thats a pipe dream.



Sure maybe SOME Rolex owners may be fire selling their luxuries under their worth but you're still not going to be picking up SS models around 20% under their market worth even in an extreme downturn.
Fire selling yes agreed, but I wasn't alluding to discounts at the AD. Just thinking you'll be able to show up and see a Sub in a case or at least get one without a long wait.

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Old 24 April 2019, 04:33 AM   #49
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The truth is nobody knows - there are so many factors which could affect things including Rolex’s future plans which are notoriously under wraps.
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Old 24 April 2019, 04:37 AM   #50
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I don't know what normal is anymore.
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Old 24 April 2019, 05:01 AM   #51
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Nobody knows. My thinking is that Rolex dialed down SS distribution/production as more people can afford TT and PM watches. Really I think the SS watches are too cheap compared to the other big hitters.

Better times PM sells, so might as well take advantage! It still amazes me that some SS Watches are the new status symbol!
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Old 24 April 2019, 05:07 AM   #52
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The ONLY thing that will cause the Rolex market to falter, in the next decade or two, will be a global market recession.

Considering the S&P 500 is at 2,934.02 as of me writing this post, which is exactly 2 points above its all-time closing high, so it looks like we have a long way to go.
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Old 24 April 2019, 05:08 AM   #53
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It wont. This is the new normal.

Anyone who talks of a bubble or 'tulips' or waiting for en economic downturn to make things 'normal again' is extremely ignorant.

It has been proven people will play this new game and pay these new prices, so there this is now the normal.
100% true. Anyone talking about "Rolex bubbles" is just clueless.
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Old 24 April 2019, 05:10 AM   #54
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- What goes up, must come down
- The bubble always bursts about 3 years after all the experts say it is imminent
- I always know the bubble is about to burst when a cabby has told me he just got into it


To date I've not yet been exposed to the last two bullets about the price of Rolex watches cratering... in my mind it is at least 3 years out and could be much longer.
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Old 24 April 2019, 05:18 AM   #55
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Rolex will not adjust pricing down regardless of economic climate. What will occur in a recession is that the grey market will price their product to where it will sell. That will probably be downward to near or below MSRP. To do this, they will have to buy product that has a cost below MSRP. In a slowdown, there may be AD's that discount, probably not to the levels of old. the used market will drop back to MSRP or below, with the exception of hard to get items. The levels of available product will be controlled by Rolex, thus the bulk of the available watches will depend on Rolex production. I don't expect Rolex to flood the market with watches in a downturn, I expect them to adjust production for the couple years of downturn that is typical in a recession. So MSRP and above is probably the new norm.
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Old 24 April 2019, 05:25 AM   #56
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With a world population of 7.5 billion plus. There are more than enough people with gobs of cash to buy highly sought after luxury product, recession or not. Rolex knows how to play the game. If this were Game of Thrones, it would be between Rolex, Patek and AP for the iron throne.
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Old 24 April 2019, 05:41 AM   #57
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I think its hard for the normal to come, but still hoping.
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Old 24 April 2019, 06:02 AM   #58
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Old 24 April 2019, 06:05 AM   #59
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100% true. Anyone talking about "Rolex bubbles" is just clueless.


As long as there is a significant part of the market of buyers who are holding onto Rolex’s simply to turn a profit, the bubble will exist.
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Old 24 April 2019, 06:05 AM   #60
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Central banks are destroying their currency by flooding markets. It might be far longer to the next crash depending on runs to wealth preservation.
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