Strange happenings in Hong Kong - grey market dealers

[psm11]

Originally Posted by Vince_76

Your points were already refuted by numerous members here. If you have to ask where I’m getting this information, then you’re likely uninformed and shouldn’t speak on the subject (MODA).

I can use offshores because they did in fact significantly benefit from the market conditions of the past 2 years.

Your numbers are all wrong which invalidates much of what you’re saying - 15500s are going for 1.5x MSRP (and sitting).

The ROs and ROCs are all dropping. There’s modern 3-handers all over the place from 33k to the 39k. 15500s have dropped over 30% and continue to fall, for example. For the aforementioned reasons that I and other posters made, it’s more likely that prices revert to the mean than stabilize at their covid-bubble levels.

And for more examples:

Takuya had a Feb 2022 43mm stainless ROO listed for around $36k
MODA just auctioned a panda 44mm ROO and I think it went for like $22k
Numerous 15400s listed on MODA the last couple of weeks for low 30ks
Numerous 15500s listed on MODA the last couple of weeks in high 30ks

AP is aggressively raising prices so that as demand cools and prices fall MSRP lines up with grey market. AP isn’t concerned about their watches being worth 2-3x MSRP they just don’t want you to buy a piece and it lose half its value when you walk out the door.

[GB-man]

Without rehashing what’s already been stated above prices remain in a downtrend. I think it’s great. Equilibrium would be perfect but honestly I would not mind taking losses on APs etc again in exchange for availability.

I won’t deny prices could shoot back up. Macro picture doesn’t support that right now.

[HMHM]

Originally Posted by GB-man

Without rehashing what’s already been stated above prices remain in a downtrend. I think it’s great. Equilibrium would be perfect but honestly I would not mind taking losses on APs etc again in exchange for availability.

I won’t deny prices could shoot back up. Macro picture doesn’t support that right now.

I just want to walk into an AD and feel like a customer again. Waiting wouldn’t be too bad for the wallet sometimes but being treated with respect and courtesy as a customer who’s about to drop a large sum of money for a watch is going to feel great!

[aa909]

Originally Posted by 911AP

I feel everyone here just has confirmation bias. The AP market has pretty much stabilized from a month or so ago. In fact some royal oaks have started to move back up.

Everything for right now has taken a hit. It's only temporary. It will go back up. May take longer to get back to how it was, but it will eventually get there. People forget this trend has happened before. They end up going higher. The supply situation has not changed at all. It's not any better. Did everyone forget Econ 101? Demand may have taken a hit but not enough for these to go back to MSRP or anywhere close to it when they were selling 2-3x across the board.

Don't compare AP to Rolex......

I'm not saying you're wrong, but the above in bold is nearly word for word what "experts" were saying about the US housing market circa 2008...

[ajw45]

AP is cranking out watches. Cheapening the base time and chrono movements has unlocked their way to 70k+ units / year. Also, unlike say PP that has a range of models within their total production, AP is like 95% RO and because they are all boutique sales, you know they are being sold at MSRP. MSRP is like gravity on these, there's nowhere to go on the above MSRP secondary prices but down. Add in a strong dollar in overallocation to the US market and I'd be inclined to wait at a boutique than buy over MSRP grey.

[aa909]

Originally Posted by Vince_76

Your points were already refuted by numerous members here. If you have to ask where I’m getting this information, then you’re likely uninformed and shouldn’t speak on the subject (MODA).

I can use offshores because they did in fact significantly benefit from the market conditions of the past 2 years.

Your numbers are all wrong which invalidates much of what you’re saying - 15500s are going for 1.5x MSRP (and sitting).

The ROs and ROCs are all dropping. There’s modern 3-handers all over the place from 33k to the 39k. 15500s have dropped over 30% and continue to fall, for example. For the aforementioned reasons that I and other posters made, it’s more likely that prices revert to the mean than stabilize at their covid-bubble levels.

nailed it

[911AP]

Originally Posted by ajw45

AP is cranking out watches. Cheapening the base time and chrono movements has unlocked their way to 70k+ units / year. Also, unlike say PP that has a range of models within their total production, AP is like 95% RO and because they are all boutique sales, you know they are being sold at MSRP. MSRP is like gravity on these, there's nowhere to go on the above MSRP secondary prices but down. Add in a strong dollar in overallocation to the US market and I'd be inclined to wait at a boutique than buy over MSRP grey.

Where do you get AP is making 70k units a year? That isn't happening for a long while. 95% is not the RO either.

Originally Posted by aa909

I'm not saying you're wrong, but the above in bold is nearly word for word what "experts" were saying about the US housing market circa 2008...

Ah but the key difference is supply. Back then supply was extremely high. Think of it as today's housing market. With interest rates increasing month after next the same thing should be happening. It should collapse. But it's not. It's pulling back definitely. But with housing supply still at all time low's it's not going to create a collapse like 2008.

The AP market today is the same. The supply is still too low. Rolex is difference. Rolex makes 1 million watches a year which is why a lot of the watches are back at retail now. RM didn't change in price AT ALL. The reason is there is barely any supply.

But time will tell who is right in this debate. It's easy for me and anyone arguing the opposite to be a keyboard warrior and fight. Time will tell....As I said, let's wait till interest rates stop increasing to see what happens next and revisit this conversation.

[youthagainsttt]

Well back to the original title of this thread, HK dealers are still very optimistic with the prices - it seems Rolex pieces are coming back, APs have taken a slight hit but holding firm somewhat.

Still seeing plenty of the above mentioned brands being priced optimistically & selling

[dmash]

The fact people are discussing watches......a luxury wrist trinket......in the same manner as housing (which is a necessity to keep a roof over one's head), is precisely why I foresee some real crash and burning in the future. It's not just specific to this thread either, a lot of people on different platforms are acting like watches are some form of currency, it's nuts. In a decade, watches could be seen as completely antiquated (like they already were beginning to seem ~2015) and could lose value tremendously.

This is a hobby gentleman, not a store of value. Don't fork over money you're not prepared to take a bath on.

[Vivalas]

Originally Posted by ajw45

AP is cranking out watches. Cheapening the base time and chrono movements has unlocked their way to 70k+ units / year. Also, unlike say PP that has a range of models within their total production, AP is like 95% RO and because they are all boutique sales, you know they are being sold at MSRP. MSRP is like gravity on these, there's nowhere to go on the above MSRP secondary prices but down. Add in a strong dollar in overallocation to the US market and I'd be inclined to wait at a boutique than buy over MSRP grey.

My understanding is that AP make around 45,000 watches a year but in 2020 that fell to 38,000 due to covid, so last year (and maybe this) they were playing catch up. I can see the business sense to increase production to satisfy ‘part’ of the demand, but never to fulfil ‘all’ the demand.

Going from 45,000 to say 50,000 seems realistic and possibly doable. Going to 70,000+ as you say would be unrealistic and take years. That’s nearly a 60% increase.

[gesus]

Originally Posted by 911AP

Where do you get AP is making 70k units a year? That isn't happening for a long while. 95% is not the RO either.

Ah but the key difference is supply. Back then supply was extremely high. Think of it as today's housing market. With interest rates increasing month after next the same thing should be happening. It should collapse. But it's not. It's pulling back definitely. But with housing supply still at all time low's it's not going to create a collapse like 2008.

The AP market today is the same. The supply is still too low. Rolex is difference. Rolex makes 1 million watches a year which is why a lot of the watches are back at retail now. RM didn't change in price AT ALL. The reason is there is barely any supply.

But time will tell who is right in this debate. It's easy for me and anyone arguing the opposite to be a keyboard warrior and fight. Time will tell....As I said, let's wait till interest rates stop increasing to see what happens next and revisit this conversation.

Prices in the secondary market will 100% come down. They already have. When borrowing costs go to 6%+ in the next few years, these so called grey dealers who levered themselves up on cheap interest will have to start liquidating their inventory as the cost to service the debt is just too much for them to handle.

Interest rates to stop increasing? Why does that matter and also, when do you suppose that's going to happen? The Fed has signaled they will increase to over 4% by the end of this year and probably higher in 2023, and on top of that, have stated they have the resolve to hold it for enough time to kill inflation. In short, they are willing to cripple the economy to bring down inflation.
What do you think that will do to any asset class, let alone an asset class that is highly discretionary, and where valuations are made up of perceived value and not fundamentals?
By the time the Fed decides to decrease rates again, which will probably be 2-3 years from now at minimum, the secondary watch market will be sufficiently destroyed where this conversation you want to have won't even matter.

[911AP]

Originally Posted by gesus

Prices in the secondary market will 100% come down. They already have. When borrowing costs go to 6%+ in the next few years, these so called grey dealers who levered themselves up on cheap interest will have to start liquidating their inventory as the cost to service the debt is just too much for them to handle.

Interest rates to stop increasing? Why does that matter and also, when do you suppose that's going to happen? The Fed has signaled they will increase to over 4% by the end of this year and probably higher in 2023, and on top of that, have stated they have the resolve to hold it for enough time to kill inflation. In short, they are willing to cripple the economy to bring down inflation.
What do you think that will do to any asset class, let alone an asset class that is highly discretionary, and where valuations are made up of perceived value and not fundamentals?
By the time the Fed decides to decrease rates again, which will probably be 2-3 years from now at minimum, the secondary watch market will be sufficiently destroyed where this conversation you want to have won't even matter.

The market has priced in rate increases till the end of the year then some decrease going into next year. Go look at the bond market. Not sure where you get the 2-3 years part. Interest rates matter because that's tanking every asset class right now. Stocks, crypto, real estate, you name it. The fed is tanking the speculative economy in order to fight inflation. Like I said, prices shot up too fast and came down just as fast. But I do not think it's going to go as low as some of you think. I hope it does though. Then I can go back to getting all the watches I want much easier.

Originally Posted by dmash

The fact people are discussing watches......a luxury wrist trinket......in the same manner as housing (which is a necessity to keep a roof over one's head), is precisely why I foresee some real crash and burning in the future. It's not just specific to this thread either, a lot of people on different platforms are acting like watches are some form of currency, it's nuts. In a decade, watches could be seen as completely antiquated (like they already were beginning to seem ~2015) and could lose value tremendously.

This is a hobby gentleman, not a store of value. Don't fork over money you're not prepared to take a bath on.

I'm comparing it to give a real life example for people who aren't financial wizards on this forum. I'm not saying watches are the same as houses. Plus if you look at the high end market for real estate it has the same behavior as any "luxury wrist trinket". Paying 3m+ for a house is not a "necessity". The image of watches has changed. People compare it to art now. They speculate, there is a market, and people will always try to make money on it now.

[Bpan]

Originally Posted by Vivalas

My understanding is that AP make around 45,000 watches a year but in 2020 that fell to 38,000 due to covid, so last year (and maybe this) they were playing catch up. I can see the business sense to increase production to satisfy ‘part’ of the demand, but never to fulfil ‘all’ the demand.

Going from 45,000 to say 50,000 seems realistic and possibly doable. Going to 70,000+ as you say would be unrealistic and take years. That’s nearly a 60% increase.

I think they said they will make 50,000 this year, ~5,000 of which are codes, ~20k of which are 50th anniversary ROs, and the rest non 50th ROs, ROOs, Concepts etc

[Vince_76]

Originally Posted by 911AP

The market has priced in rate increases till the end of the year then some decrease going into next year. Go look at the bond market. Not sure where you get the 2-3 years part. Interest rates matter because that's tanking every asset class right now. Stocks, crypto, real estate, you name it. The fed is tanking the speculative economy in order to fight inflation. Like I said, prices shot up too fast and came down just as fast. But I do not think it's going to go as low as some of you think. I hope it does though. Then I can go back to getting all the watches I want much easier.



I'm comparing it to give a real life example for people who aren't financial wizards on this forum. I'm not saying watches are the same as houses. Plus if you look at the high end market for real estate it has the same behavior as any "luxury wrist trinket". Paying 3m+ for a house is not a "necessity". The image of watches has changed. People compare it to art now. They speculate, there is a market, and people will always try to make money on it now.

You got it all wrong. Why have you not responded to any of my claims/numbers? You keep throwing out baseless data and comparisons. Myself and others have clearly provided tangible numbers that the market continues to drop, and you say let’s revisit the conversation. LOL can’t make this up.

Comparing the housing market to watches is asinine on a number of levels. The former is beholden to interest rates, residual land values, and is the largest investment a typical family will make. The latter provides no intrinsic value (rather propped up by perceived value) and is by definition a luxury good that will be the first on the chopping block when disposable income/savings thin out. Again, exceptional circumstances caused this run up in watch prices, and it is more likely than not that watch prices will revert to the mean.

The art market cannot be compared to the watch market either. ROs and Rolexes are mass produced compared to limited run/ 1-of-1 pieces. Moreover, there is an extensive precedent of art as an investment. For watches, it’s just literally a couple years. You think it’s a coincidence that it coincided with historically low interest rates, record savings, and helicopter money?

[GB-man]

Originally Posted by 911AP

Where do you get AP is making 70k units a year? That isn't happening for a long while. 95% is not the RO either.



Ah but the key difference is supply. Back then supply was extremely high. Think of it as today's housing market. With interest rates increasing month after next the same thing should be happening. It should collapse. But it's not. It's pulling back definitely. But with housing supply still at all time low's it's not going to create a collapse like 2008.

The AP market today is the same. The supply is still too low. Rolex is difference. Rolex makes 1 million watches a year which is why a lot of the watches are back at retail now. RM didn't change in price AT ALL. The reason is there is barely any supply.

But time will tell who is right in this debate. It's easy for me and anyone arguing the opposite to be a keyboard warrior and fight. Time will tell....As I said, let's wait till interest rates stop increasing to see what happens next and revisit this conversation.

The RM market is absolutely down from Q1. Try selling one.

[dmash]

Originally Posted by Vince_76

The art market cannot be compared to the watch market either. ROs and Rolexes are mass produced compared to limited run/ 1-of-1 pieces. Moreover, there is an extensive precedent of art as an investment. For watches, it’s just literally a couple years. You think it’s a coincidence that it coincided with historically low interest rates, record savings, and helicopter money?

Whilst AP/PP is better than Rolex, is wild how some people think a modern SS Rolex is some 'rarity'. They really haven't a clue how many their dealers get, they were just siphoning them out the back door and giving some BS about a list and no supply. For example, plenty of dealers get dozens of Daytonas per year, but they'll have Joe Schmo to believe they get one or two. It's all an illusion and lots of people bought into it. Quite frankly, it's actually mind boggling at just how NON rare any Rolex actually is, for it to ever be trading above MSRP. There's THOUSANDS of Subs/GMTs sold weekly all across the world.

Any modern day watch, unless its incredibly LE (as in less than 10), has zero practical reason to ever trade above MSRP. Where people have gotten lost on that and stopped using common sense, I'm not sure.

[huncho]

while the watch market has definitely crashed mostly due to everyone's portfolios speedrunning to 0, i think moda isn't entirely indicative of the market as a whole. moda is a very small niche and mostly consists of grey dealers so because of that it's essentially the same people auctioning against themselves. none of the greys want to buy anything and because of that the prices just get lower every day and watches end up sitting. it's the opposite of what was happening at the end of last year/beginning of this year, where these same people were just outbidding each other and driving prices up. in reality, how many "normal" people even know what moda is or would be willing to use it?

there's no denying the prices have been coming down, but the disconnect between moda and the real world situation at ADs is massive at this point. you're still unable to order PM pieces yet they're going for under retail on moda. i posted the same in the other giant thread but at some point the two markets have to meet somewhere in the middle, and where that'll be is anyone's guess at this point, but whatever is going on right now seems to be just greys artificially lowering prices because they're all dumping at once. until these watches are available at ADs again like in 2017 it's hard to imagine we see normal discounts for long. also the watch market seems to lag a lot so at this rate it looks like availability could get a lot better some time mid next year, but if we do get to that point next year and stocks/other markets start rebounding then it's anyones guess as to what happens again. these watches could just fly right back up

[Vince_76]

Originally Posted by huncho

while the watch market has definitely crashed mostly due to everyone's portfolios speedrunning to 0, i think moda isn't entirely indicative of the market as a whole. moda is a very small niche and mostly consists of grey dealers so because of that it's essentially the same people auctioning against themselves. none of the greys want to buy anything and because of that the prices just get lower every day and watches end up sitting. it's the opposite of what was happening at the end of last year/beginning of this year, where these same people were just outbidding each other and driving prices up. in reality, how many "normal" people even know what moda is or would be willing to use it?

there's no denying the prices have been coming down, but the disconnect between moda and the real world situation at ADs is massive at this point. you're still unable to order PM pieces yet they're going for under retail on moda. i posted the same in the other giant thread but at some point the two markets have to meet somewhere in the middle, and where that'll be is anyone's guess at this point, but whatever is going on right now seems to be just greys artificially lowering prices because they're all dumping at once. until these watches are available at ADs again like in 2017 it's hard to imagine we see normal discounts for long. also the watch market seems to lag a lot so at this rate it looks like availability could get a lot better some time mid next year, but if we do get to that point next year and stocks/other markets start rebounding then it's anyones guess as to what happens again. these watches could just fly right back up

Why do they “have to meet in the middle”? There is no reason that the equilibrium for the watch market is equidistant b/w grey and MODA prices. In fact, I’d say MODA is a bellwether for today’s market value. Why? Because MODA (along with other dealer chats) are precisely how greys source their product and identify offer prices to would-be sellers. Look at the CRM videos for example - whenever someone offers a watch, they go to the dealer chats to see at what price/if they’ll buy.

The fact that MODA isn’t well-known/is niche is a moot point. What matters is that dealers are buying at these prices and applying a spread. Therefore, MODA/dealer chats are the most reliable indicator of market prices (also more liquid/active - good luck trying to find out what a grey actually sells for, they’re often looking for one sucker to buy high, e.g., greater fool theory).

[aa909]

Originally Posted by 911AP

Ah but the key difference is supply. Back then supply was extremely high. Think of it as today's housing market. With interest rates increasing month after next the same thing should be happening. It should collapse. But it's not. It's pulling back definitely. But with housing supply still at all time low's it's not going to create a collapse like 2008.

The AP market today is the same. The supply is still too low. Rolex is difference. Rolex makes 1 million watches a year which is why a lot of the watches are back at retail now. RM didn't change in price AT ALL. The reason is there is barely any supply.

But time will tell who is right in this debate. It's easy for me and anyone arguing the opposite to be a keyboard warrior and fight. Time will tell....As I said, let's wait till interest rates stop increasing to see what happens next and revisit this conversation.

The reason I reference Housing is because that is a tangible asset with real underlying value that drives the supply-demand dynamic, whereas this hobby has a demand curve based on discretionary funds (and those funds were blown out of proportion the past 2 years based on free money, crypto speculation, insane stock gains like Cathy Woods ARK fund etc). hence if real assets like housing can reach speculative bubble levels in 2008 due to the dynamics created by "free money" and then crash hard, then our hobby has potentially much lower lows.

All the 20 and 30 year old crypto bros who were piling into luxury watches and cars have essentially been washed out, along with speculators in NFTs, digital metaverse real estate (yes people were paying $1M for digital real estate if you can believe that LOL!).

I'm not predicting the bottom, but the trend is down across the board. However if the Fed blinks and cuts rates in the new year then you may be right and all assets (especially commodities) will turn back up hard.

[911AP]

Originally Posted by Vince_76

You got it all wrong. Why have you not responded to any of my claims/numbers? You keep throwing out baseless data and comparisons. Myself and others have clearly provided tangible numbers that the market continues to drop, and you say let’s revisit the conversation. LOL can’t make this up.

Comparing the housing market to watches is asinine on a number of levels. The former is beholden to interest rates, residual land values, and is the largest investment a typical family will make. The latter provides no intrinsic value (rather propped up by perceived value) and is by definition a luxury good that will be the first on the chopping block when disposable income/savings thin out. Again, exceptional circumstances caused this run up in watch prices, and it is more likely than not that watch prices will revert to the mean.

The art market cannot be compared to the watch market either. ROs and Rolexes are mass produced compared to limited run/ 1-of-1 pieces. Moreover, there is an extensive precedent of art as an investment. For watches, it’s just literally a couple years. You think it’s a coincidence that it coincided with historically low interest rates, record savings, and helicopter money?

You argue like a dinosaur unable to accept how the world is changing. What numbers do you want me to comment on? You have not provided an evidence to back your numbers up, same as you want to back mine. Interest rates have been "historically low" for over 10 years. That's a dumb thing to add in there. Record savings and helicopter money sure. But, regardless of what caused the catalyst the outcome is here to stay. It's not because of any of those. It's simply social media. Social media has changed the game for the watch market.

[huncho]

Originally Posted by Vince_76

Why do they “have to meet in the middle”? There is no reason that the equilibrium for the watch market is equidistant b/w grey and MODA prices. In fact, I’d say MODA is a bellwether for today’s market value. Why? Because MODA (along with other dealer chats) are precisely how greys source their product and identify offer prices to would-be sellers. Look at the CRM videos for example - whenever someone offers a watch, they go to the dealer chats to see at what price/if they’ll buy.

The fact that MODA isn’t well-known/is niche is a moot point. What matters is that dealers are buying at these prices and applying a spread. Therefore, MODA/dealer chats are the most reliable indicator of market prices (also more liquid/active - good luck trying to find out what a grey actually sells for, they’re often looking for one sucker to buy high, e.g., greater fool theory).

i get it but the reason no one wants to buy is because all these greys were hoarding and are now dumping. it's not indicative of the situation at ADs getting better yet. in 2016 almost everything sold at a discount at greys which is the reason you had cases full at ADs. today it varies based on market but a lot of markets are still unchanged while grey prices suggest that we're back in 2018. it's also probably because client facing greys are still demanding high premiums but my point was just if so many watches are cheap on moda you would expect people to flood over there to buy them instead of still waiting for ADs, which is why i mentioned it's a niche specifically for greys. if chrono24/bobs/major greys showed the same prices as are found on moda then i think we'd see everything slowly go back to 2017/2018 levels

[911AP]

Originally Posted by aa909

The reason I reference Housing is because that is a tangible asset with real underlying value that drives the supply-demand dynamic, whereas this hobby has a demand curve based on discretionary funds (and those funds were blown out of proportion the past 2 years based on free money, crypto speculation, insane stock gains like Cathy Woods ARK fund etc). hence if real assets like housing can reach speculative bubble levels in 2008 due to the dynamics created by "free money" and then crash hard, then our hobby has potentially much lower lows.

All the 20 and 30 year old crypto bros who were piling into luxury watches and cars have essentially been washed out, along with speculators in NFTs, digital metaverse real estate (yes people were paying $1M for digital real estate if you can believe that LOL!).

I'm not predicting the bottom, but the trend is down across the board. However if the Fed blinks and cuts rates in the new year then you may be right and all assets (especially commodities) will turn back up hard.

I can't argue with most of this logic. I still feel with watches though social media got the genie out of the bottle. It's going to be hard to put it back in. The demand curve has shifted up compared to pre covid. Not just because of record savings and such, but also because more people who are wealthy like and want AP.

I do believe the grey dealers are creating artificial lows right now with everyone trying to dump inventory all at once. Just taking the 15202 as an example. There were like 6 jumbo's I think listed on chrono24 for the US leading up to February. Today there is around 40. Right now supply is high on the market because everyone is dumping. Maybe there will be one more big price cut just to unload the inventory. But after that? I think it's going back up.

And as you said if the fed cuts rates, everything is shooting back up and watches with it. I can't predict what will finally control inflation, nor will I even bother to. It's anyones best guess.

There are 2 situations here. Supply of watches in the secondary market. Supply of watches from the boutiques. The supply of watches in the secondary market temporarily has reached new highs, therefore prices are coming down. But the supply from the boutiques is still crap. Nothing has changed there. But, demand for this brand has organically increased big time. Everyone knows AP now far more than they did pre covid. The days of wearing a RO and no one knowing what it is are over.

[dmash]

Let’s stick a pin in this and revisit March 2023.

[huncho]

Originally Posted by dmash

Let’s stick a pin in this and revisit March 2023.

yup, guessing game at this point. my hot take is i'd much rather have premiums in the watch market with a good stock market rather than whatever we have today. this year has brought on a lot of pain and at this point watches becoming available is the last thing i care about. it was interesting to see people say watches could crash without the entire economy/stock market falling apart but obviously the bubble wouldn't have popped without something as drastic happening elsewhere. i don't necessarily find it exciting for availability to come back knowing what would cause it

[Vince_76]

Originally Posted by 911AP

You argue like a dinosaur unable to accept how the world is changing. What numbers do you want me to comment on? You have not provided an evidence to back your numbers up, same as you want to back mine. Interest rates have been "historically low" for over 10 years. That's a dumb thing to add in there. Record savings and helicopter money sure. But, regardless of what caused the catalyst the outcome is here to stay. It's not because of any of those. It's simply social media. Social media has changed the game for the watch market.

Rejecting to ad hominem attacks - that’s when you know you’ve lost lol!!

I have provided numbers, as did PSM11. You claim that 15500s are trading 2x their MSRP, and we refuted that. You compare housing to watches, and we provide cogent arguments as to why that’s not the case. Meanwhile you quote Econ101 and fail to grasp basic economic concepts.

Regarding interest rates - if interest rates are not that relevant, why did the secondary watch market’s dip coincide with rate increases? The fed funds rate is now where it was in 2019, so no - rates haven’t been this low over the course of 10 years.

Social media (especially Instagram) has been around much longer than a couple years. Social media wasn’t the cause of watches skyrocketing in value - what a joke!

[911AP]

Originally Posted by Vince_76

Rejecting to ad hominem attacks - that’s when you know you’ve lost lol!!

I have provided numbers, as did PSM11. You claim that 15500s are trading 2x their MSRP, and we refuted that. You compare housing to watches, and we provide cogent arguments as to why that’s not the case. Meanwhile you quote Econ101 and fail to grasp basic economic concepts.

Regarding interest rates - if interest rates are not that relevant, why did the secondary watch market’s dip coincide with rate increases? The fed funds rate is now where it was in 2019, so no - rates haven’t been this low over the course of 10 years.

Social media (especially Instagram) has been around much longer than a couple years. Social media wasn’t the cause of watches skyrocketing in value - what a joke!

I'm not sure you are reading my posts properly based on your response. You provided numbers as did I, but no evidence to back it up. Interest rates going up matters. But interest rates being at historical lows do not as they were for 10 years (just using you social media argument now).

The reasons for buying luxury housing is almost the same as a watch. People do it as a store of value, they don't need it, they expect to make money on it, it's a hedge perhaps for markets that barely make anything, majority are bought 100% cash (or even crypto), both are used to launder/hide money for the super wealthy (this last one applies big time to both ESPECIALLY with the Chinese) etc.... I could go on with the similarities.

Social media has been around much longer than a couple years....true.....But were AP posted as much as rolexes then? No. Were nautiluses posted as much back then? No. Was even RM posted as much back then? No. Everyone and their uncle now posts a Nautilus, a RO, and a RM on every instagram post possible to market ANYTHING these days.

But as other people have said, and I have said earlier. Let's put a pin on it and time will tell whose right

[Vince_76]

Originally Posted by 911AP

The reasons for buying luxury housing is almost the same as a watch.

Outrageous. At least we agree on putting a pin on it. Looking forward to revisiting this.

[aa909]

Originally Posted by 911AP

I can't argue with most of this logic. I still feel with watches though social media got the genie out of the bottle. It's going to be hard to put it back in. The demand curve has shifted up compared to pre covid. Not just because of record savings and such, but also because more people who are wealthy like and want AP.

I do believe the grey dealers are creating artificial lows right now with everyone trying to dump inventory all at once. Just taking the 15202 as an example. There were like 6 jumbo's I think listed on chrono24 for the US leading up to February. Today there is around 40. Right now supply is high on the market because everyone is dumping. Maybe there will be one more big price cut just to unload the inventory. But after that? I think it's going back up.

And as you said if the fed cuts rates, everything is shooting back up and watches with it. I can't predict what will finally control inflation, nor will I even bother to. It's anyones best guess.

There are 2 situations here. Supply of watches in the secondary market. Supply of watches from the boutiques. The supply of watches in the secondary market temporarily has reached new highs, therefore prices are coming down. But the supply from the boutiques is still crap. Nothing has changed there. But, demand for this brand has organically increased big time. Everyone knows AP now far more than they did pre covid. The days of wearing a RO and no one knowing what it is are over.

I lived through the 00-01 and 08-09 crash so I am out of the prediction game other than to say I learned not to trust anything anyone says and just focus on price. price is truth, hence I sold 80% of my stock holdings between Nov 2021-Feb 2022. Price on everything no longer made sense to me from an investment stand point. But I've held my watches and cars because those are toys which I enjoy at my leisure. unfortunately too many folks the past 2 years took to these hobbies as investments and not for enjoyment.

I'll leave it with this, I think probabilistically we are closer to a bottom in markets than we were 8 months ago. So unless there is a systemic landmine in the financial markets (e.g. UK LDI currency crisis) we could see things settle down some time in 2023. But just like "buy the dip" was a no brainer for 10 years, "sell the rip" may last a while longer so I wouldn't assume an uptick in watch prices over the holidays is necessarily a sustainable trend...

[dmash]

Originally Posted by 911AP

Social media has been around much longer than a couple years....true.....But were AP posted as much as rolexes then? No. Were nautiluses posted as much back then? No. Was even RM posted as much back then? No. Everyone and their uncle now posts a Nautilus, a RO, and a RM on every instagram post possible to market ANYTHING these days.

As a final tidbit...

You're grossly overestimating the buying population for luxury watches. If we're talking stateside, outside of NYC/LA/Miami and a few others, I can almost guarantee you if I polled 100 random passerbys to identify a Royal Oak or a Nautilus they wouldn't even have a clue.

Another facet I'm seeing overblown on these niche areas of the internet like forums, followers on IG watch pages, etc. 'Every' body doesn't know AP/PP along with the models and prices now. Just old school horologists and newfound watch bros. Let's get real. Another reason it's absolutely insane to compare any aspect of this to a housing market.

[GS93108]

Originally Posted by dmash

As a final tidbit...

You're grossly overestimating the buying population for luxury watches. If we're talking stateside, outside of NYC/LA/Miami and a few others, I can almost guarantee you if I polled 100 random passerbys to identify a Royal Oak or a Nautilus they wouldn't even have a clue.

Another facet I'm seeing overblown on these niche areas of the internet like forums, followers on IG watch pages, etc. 'Every' body doesn't know AP/PP now. Just old school horologists and newfound watch bros. Let's get real.

I don't have much to add to this thread, but I don't like the fighting :)

That said, I've lost money on pretty much every watch I've ever sold, yet my wife still lets me buy them because they are NOT investments, they are for my pleasure.

One more thing, a couple of years ago AP was somewhat anonymous to non-watch interested people, I liked that - a lot. Just recently though I had to wire money to AP which I couldn't do online so I went to the bank. The young lady who processed my transfer saw the payee and the amount and immediately asked me if I was buying a watch! Maybe that's not unusual if you live in Beverly Hills or Mayfair, but I live in a quiet seaside town where I can walk around wearing any watch I care to with very little trepidation. I now also get asked about AP if I wear any AP logo golf shirts etc. Times have definitely changed - not necessarily for the better.

One final anecdote. There's a lovely lady at AP London, she's young and of course wears an AP. A few years ago she told me a story about being out with one of her girl friends who was wearing her father's Daytona - everyone was gushing over it. The AP lady was wearing her gold RO and it didn't get a second glance. There's no way that's happening today.