When will the Rolex bubble burst?

[macrowatch]

I think the CEO would rather cut production than return back to 2015 old normal. I think they ARE however aiming for 2019 old normal. Meaning a few Pm sports in the case, plentiful DJ 36, but intentional NO SS sport of any kind in the case. Maybe in the back at best.

[zewill]

Originally Posted by edisonstar23

Hard to say! But I think most will agree that a Daytonas trading for over double retail isn’t sustainable. Unless the amount of wealth keeps on going up to still create the same demand.

I think that we are at a peak of an economic bubble where most people as you can see within this post are very confident and feel that we are in a very prosperous economy. BUT HISTORY REPEATS itsself and our economy has behaved this way for the past 200 years and I predict the Economy to take a massive hit. By 2024 we will start feeling the effects of CoVid, effects of inflation, etc etc. Therefore, I predict Daytona Prices to start trading by then a little over retail.

I can’t believe people think that we are not in for a correction- not only on luxury watches but on Everything.


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The effects of COVID on the economy were totally the opposite of what we thought. At least in the short time. Also, when you have inflation, prices go up. If salaries increase 10-20 or 30% people will buy more stuff.. and stuff will disappear. Like Rolexs have. So if inflation continues, expect Rolex to increase prices (even more than their regular price increases)

[Madman37]

Originally Posted by fsprow

No idea, but my personal belief is that highly desirable watches in relatively low production (Patek, AP, Mille…) will probably do better over the long run than mass-produced watches like Rolex.

When you say mass produced how many for example Daytona’s are made per year of those million?

[Mystro]

Originally Posted by Madman37

When you say mass produced how many for example Daytona’s are made per year of those million?

No one knows for sure but as far as the Daytona, Rolex has always kept its production numbers very low in comparison to other models. This was the earliest example of limited release compared to any other model in the catalog. This was over two decades before the madness even started. It started when no one wanted the Daytona back in the late 80’s to the SS Daytona getting a reputation of being limited in the early 90’s. Considering it was only in 1972 when AP introduced the Royal Oak making the brand a baby compared to the well established legendary models from Rolex like the Submariner at the time.

[thesharkfactor]

Watch this..

https://www.youtube.com/watch?v=rLB27j4vZnU

[173rdabn]

And I should give a damn.....WHY?

[Nav01L]

When people get bored and move on. Which will happen eventually.

To some, like myself I have to admit, it’s already kind of boring now. Everyone is showing us the substantially same collection with one or both SS Daytona dials, a BLRO, a BLNR, a green Sub and something in gold, which typically is the only truly interesting watch in the lineup, because that’s where there is the most variety. The remainder is just a big sad yawnfest, where the only thing that ever changes is the ludicrous grey market price and the untoward things the AD asks you for to sell you one.

Though I’ve been disappointed many times, I still believe in humanity, so eventually people must catch on to that.

But don’t hold your breath. Could easily be another 7-10 years.

[jimcameron]

What bubble?

[rolexkidd]

Until Rolex decides to pump up the volume, there will be no correction whatsoever.

[Rolexatlast]

Originally Posted by TswaneNguni

The odd 1 mil Rolex watches created annually have plenty buyers in just the dollar millionaires in the USA,China and Switzerland alone ...

Anyone thinking you will see ss Rolex sports in display cases again is day dreaming .

So what is the difference between 2022 and 2016?

[fixinbones]

Originally Posted by jestrada

NEVER. Not even a freaking pandemic that forced people to stay home for the better part of a year which put a lot of uncertainty in most markets burst it, what makes us think that anything less than a mass level extinction event will do it; That or perhaps a sudden diminished Rolex brand preference by the so-called “hypebeasts” and profiteers. Take your pick which between the 2 is a more likely occurence


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Contrary to the pandemic bursting it, I think the pandemic has been a major contributor to it. There are so many high income people whose wealth was not affected by the pandemic. Then add to that that they’re sitting home for 12mos not spending money on their usual expensive vacations or purchasing a lot of other expensive durable goods. So now with all this extra cash laying around they go out and buy another Rolex to cheer themselves up and help them get out of their gloomy pandemic mood.

[huncho]

Originally Posted by Rolexatlast

So what is the difference between 2022 and 2016?

they weren't seen as safe purchases back in 2016, now they are. like it or not, the casual buyer thinks a rolex is a safe investment

[Rolexatlast]

Originally Posted by Nav01L

When people get bored and move on. Which will happen eventually.

To some, like myself I have to admit, it’s already kind of boring now. Everyone is showing us the substantially same collection with one or both SS Daytona dials, a BLRO, a BLNR, a green Sub and something in gold, which typically is the only truly interesting watch in the lineup, because that’s where there is the most variety. The remainder is just a big sad yawnfest, where the only thing that ever changes is the ludicrous grey market price and the untoward things the AD asks you for to sell you one.

Though I’ve been disappointed many times, I still believe in humanity, so eventually people must catch on to that.

But don’t hold your breath. Could easily be another 7-10 years.

Agree with this. Eventually, the ‘cool’ guys will decide that Rolex are boring, and wearers will be seen as lacking imagination, which will kill desirability. Once demand drops, prices will begin to fall. At that point, the speculators will exit quickly killing the flipping market. So I don’t see a bubble burst, but a curve that gets steeper and steeper - 12 o’clock to 3 o’clock if you like

[Rolexatlast]

Originally Posted by huncho

they weren't seen as safe purchases back in 2016, now they are. like it or not, the casual buyer thinks a rolex is a safe investment

So, they go up in value because they are going up? Classic bubble mentality

[huncho]

Originally Posted by Rolexatlast

So, they go up in value because they are going up? Classic bubble mentality

there's a lot more to it that makes it a perfect storm. US printing trillions of dollars and causing inflation, pandemic allowing the rich to get richer because they're saving all their money, financing has been almost free, almost all asset classes going up, crypto skyrocketing, watches being all over social media, etc ...

it probably is a bubble but with all that's going on who knows when it will end, it feels like everything is a bubble right now so it's not as simple as just people wanting a rolex because it's the flavor of the month. none of this was present in 2016

[VegasBaby]

I predict the Bubble will burst once every one on earth has a SS Daytona and SS Pepsi. Once, everyone has one of those, we can go back to full showcases because before that madness, no one would paid over retail for the rest of the line.....quite the opposite, everything else sold at a a discount on the Grey Market.

[GW44]

Originally Posted by rolexkidd

Until Rolex decides to pump up the volume, there will be no correction whatsoever.

This.

[TheVTCGuy]

Rolexes are hard to find at ADs?

[asiparks]

Originally Posted by Rolexatlast

Agree with this. Eventually, the ‘cool’ guys will decide that Rolex are boring, and wearers will be seen as lacking imagination, which will kill desirability. Once demand drops, prices will begin to fall. At that point, the speculators will exit quickly killing the flipping market. So I don’t see a bubble burst, but a curve that gets steeper and steeper - 12 o’clock to 3 o’clock if you like

This. And I think it's already happening. Whilst some consumers crave the "can't have", those that want to make money from them are already looking for the next, not yet hot thing to hype into a bubble.

If you're buying Rolex at $13K and flipping for $37K that's one thing, but when you're having to buy that $13k asset at $34k to sell at $37k then things look a little wobblier.

[bob sims]

Originally Posted by Madman37

When you say mass produced how many for example Daytona’s are made per year of those million?

Best anyone can figure out: not much more than 10,000 Panda's a year.
Worldwide.
Not "mass produced" at all when (pick a number) 30, 50 or 100 thousand people per year are salivating over it.
I have come to the conclusion that "mass produced" is a word used by people who want the watch and either can't afford it or wives won't let them buy it.
Straws, flatware, and drinking glasses are "mass produced". Rolex watches? No.

[Aquaholic_user]

This is probably the best time to get the most for an unwanted rookie polished watch.

Sent from my balloon knot

[strafer_kid]

Originally Posted by teck21

Everyone’s an expert, so let’s see who the true experts are!

See if this thread will age as badly as the ones from 2019 so confidently predicting the end was nigh for crazy Rolex prices.

For the purpose of simplicity and clarity, a bursting of the so-called Rolex bubble would refer to a sudden and sharp drop in the resale price for a BNIB Rolex panda Daytona ref 116500LN.

This model has been selected as being the most representative proxy for overall Rolex pricing.

The assumption is that the price now is US$31,000 for BNIB and a bursting of the bubble will lead to a fall in its price by 30% or more when the bubble does burst.

Your reasons for a collapse (or a non collapse) are irrelevant, simply whether you call a bubble and when you expect it to burst using the above point of reference.

1) 2021-2022
2) 2023-2024
3) beyond that, or never. What bubble?
4) too stupid to make a call

Yes, beyond 3 years was put together with never because calling a bubble 3 years early is actually no sign of astuteness or accurate predicting at all. It’s no better than saying it must burst at some point.

Experts abound here.


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..I certainly would not want to be hanging on a rope waiting for this to happen....is it ever going to burst?

[1665fan]

The classics will always be worth a premium….16520>116500 etc…. But as long as production remains low on the sports models there might be no end in sight……DJ don’t even stay in the showcases

[S.Explorer]

Option 2 or 3 - to coincide when interest rates go up significantly.

[Marcjvr]

Originally Posted by bob sims

Best anyone can figure out: not much more than 10,000 Panda's a year.
Worldwide.
Not "mass produced" at all when (pick a number) 30, 50 or 100 thousand people per year are salivating over it.
I have come to the conclusion that "mass produced" is a word used by people who want the watch and either can't afford it or wives won't let them buy it.
Straws, flatware, and drinking glasses are "mass produced". Rolex watches? No.

There are roughly 260 working days a year. That means Rolex churns out around 3,000+ watches a day…

If that’s not mass produced then I don’t know what is

They are nice watches though

[Gerardus]

What bubble?

[Driver8]

I'm an economist by background, and no-one in their right mind would attempt to predict the future performance of luxury goods, and especially somewhat Veblen goods, like Rolex in a market such as this. And especially not to a timeframe.

What I will say is this -

1) Those who are saying there is no bubble are mostly, but not completely, incorrect since the current situation sort of describes what an economic bubble is. Usually a bubble describes a situation in which an asset's price soars while being largely based on implausible views about the future..., and prices certainly have risen disproportionately in recent years on essentially nothing more than social media hype. Now, whether certain speculators views on Rolex's future demand is implausible or not remains to be seen, but that leads on to point 2 below. It's also worth noting that while traditionally a bubble will burst, that's not necessarily always the case: a bubble can equally just stop expanding (which is highly likely once grey dealer prices reach the maximum the market will bear), or it can deflate slightly instead of a dramatic burst (which again may happen if prices stagnate and greys need to shift stock).

2. Likewise those who say it will continue upwards forever are also incorrect. To believe it will carry on indefinitely at the rate it is today, assumes that absolutely nothing globally/economically/socially will ever change, and that is also foolish. History has shown time and time again that nothing ever stays the same, and if nothing else, fads/fashions come and go all the time. And remember we aren't talking about a vital necessity here - we aren't talking about bread, or drinking water, or fuel. We're talking about pure luxury items that (in the case of SS) have very little intrinsic value - hence demand can be very fickle as it's subject to consumer whims far more than many other goods. And let's not forget a huge proportion of current demand is driven by social media, FOMO, and speculators looking to turn a quick profit.

There are simply far too many variables to be able to put the "educated" in "educated guess".

[ugoblue]

4 - but i'll throw out a few ideas

For the past decade:

Hype (web, youtube, blogs, forums, instagram) has been attracting new buyers for Rolex.

Certain demographics have used Rolex, Patek, etc. for conspicuous demonstration of bling.

Rising brokerage accounts have given more people the means to buy Rolex.

The same new buyers are interested in non-traditional "investments" (e.g. watches, bitcoin).

For investment or collecting purposes, people are now buying multiple Rolexes. Owning 6 Rolexes was very unusual 20 years ago. Not so much today. This really multiplies demand.

BUT:

Overall generational change is pushing a steady decline in the interest of wristwatches. Everyone owns the world's most accurate pocket watch - a phone. Wristwatches are a slightly practical fashion statement. Fashion changes.

All collecting fads eventually crest and recede because the collectors move on to other interests. When interests fade, the collectors will pare back from a dozen watches to just a few.

The selling model of Rolex AD network is sure to change. Maybe more direct sales, boutiques, etc. Prices will inflate.

It seems most likely that the long term trend will probably see the interest in Rolex crest at some point. But like the stock market, it is really hard to predict just when the crest is.

[franktehtank]

When the hordes don't care about Rolex anymore. I also don't think the bubble will ever actually pop, maybe deflate.

[DonLee]

find it hliarious that people think Rolex have to do something about the MARKET wanting more Daytonas. Why does everyone think they could make more watches, and that will be the end of it?

They could charge 30% for the price, making double the profit, and every Daytona will sell instantly still. That's a lot easier than making double the production.