Equity, fixed income, and cryptos are all falling. Watch prices will logically fall

[Fifteen]

Do not buy grey. Wait for the avalanche to hit and buy at retail or even lower. I expect prices to fall gradually the next 3-4 months and likely take a dive this fall or winter

[Bearxj86]

Agree that recession fears will affect prices, do have some big ticket drivers I am wondering?

So what happens when China (25% of global watch demand) reopens? What happens if the war in Ukraine concludes for better or worse?

[911AP]

Originally Posted by Bearxj86

Agree that recession fears will affect prices, do have some big ticket drivers I am wondering?

So what happens when China (25% of global watch demand) reopens? What happens if the war in Ukraine concludes for better or worse?

You hit it indirectly here. This is because of China. When China reopens prices are going right back up. The majority of buyers willing to pay these stupid prices come from China.

[Fifteen]

Originally Posted by 911AP

You hit it indirectly here. This is because of China. When China reopens prices are going right back up. The majority of buyers willing to pay these stupid prices come from China.

That is one factor. But as the fed continues to temper demand with rising rates and QE, I expect this to have a dramatic impact to all luxury goods (in addition to other consumer products as well)

[Xerxes77]

I think nobody knows…. it’s very hard to predict what will happen again….. not forgot that when Covid pandemic situation start all price are go down in price and in the end rise to the sky
China have a big impact on grey market price…..also I read a thread yesterday about how you can enter on AP Boutique without established meeting first…. AP it’s on the wave now and do not forgot they have majority Boutique and control every piece who are allocated to someone…. In this condition I don’t see how demand will be under demand to can speak about this price drops…
If we look what price have on grey market RO Jumbo in November 2021 we will see that the price it’s substantially up even with this correction….
All in all I think it’s very hard to predict

[911AP]

Originally Posted by Fifteen

That is one factor. But as the fed continues to temper demand with rising rates and QE, I expect this to have a dramatic impact to all luxury goods (in addition to other consumer products as well)

I'm calling it. Once China reopens and the war in Ukraine is settled, the prices will shoot past their previous highs.

[Sandpit]

Originally Posted by 911AP

You hit it indirectly here. This is because of China. When China reopens prices are going right back up. The majority of buyers willing to pay these stupid prices come from China.

I'm not so sure - lots of things are topping out and aren't related to China. New car sales are now dropping significantly and (anecdotally) secondary market prices for certain 'hot' cars (Porsche market) are dropping too. I personally don't believe this is solely China related.

[Tay821]

Originally Posted by Sandpit

I'm not so sure - lots of things are topping out and aren't related to China. New car sales are now dropping significantly and (anecdotally) secondary market prices for certain 'hot' cars (Porsche market) are dropping too. I personally don't believe this is solely China related.

In the US, new car sales not dropping...and the consumer who is looking for a porsche is less than 10% of the market. Even vehicles like Fords or Toyotas command premiums over MSRP. This is not a sign of a down market

[GW44]

Jeez, aren't there enough posts in the main Rolex discussion forums about the sky falling down in the next 10 minutes

Can't we just enjoy our watches and ignore the forum keyboard experts talking the market down and, frankly, squeezing the enjoyment out of the hobby?!

(Rant over)

[911AP]

Originally Posted by Sandpit

I'm not so sure - lots of things are topping out and aren't related to China. New car sales are now dropping significantly and (anecdotally) secondary market prices for certain 'hot' cars (Porsche market) are dropping too. I personally don't believe this is solely China related.

Originally Posted by Tay821

In the US, new car sales not dropping...and the consumer who is looking for a porsche is less than 10% of the market. Even vehicles like Fords or Toyotas command premiums over MSRP. This is not a sign of a down market

This ^ A Kia is selling for over MSRP still....

Originally Posted by GW44

Jeez, aren't there enough posts in the main Rolex discussion forums about the sky falling down in the next 10 minutes

Can't we just enjoy our watches and ignore the forum keyboard experts talking the market down and, frankly, squeezing the enjoyment out of the hobby?!

(Rant over)

Then don't read the thread? Some of us think it's fun to have these debates.

[DonLee]

Originally Posted by 911AP

This ^ A Kia is selling for over MSRP still....



Then don't read the thread? Some of us think it's fun to have these debates.

Cars are different. they have been hampered by the shortage of chips. I have a friend who put in a deposit on a Kia Sorento for 2021, and they told me that even the 2020 orders haven't been finished.

[ajw45]

Originally Posted by Sandpit

I'm not so sure - lots of things are topping out and aren't related to China. New car sales are now dropping significantly and (anecdotally) secondary market prices for certain 'hot' cars (Porsche market) are dropping too. I personally don't believe this is solely China related.

Additionally, China luxury sales were slowing before they went on lockdown. When things do open up again I don't expect the same boom as the first lockdowns where people came out and went straight to Louis Vuitton.

As for cars, agreed. Sure there are still markups for some Kias but the big mark-ups for things like Gwagons are gone. IOW, the cars that people NEED can still command a slight premium but the one's people desire are starting to get back to normal and that demand slows. Usually the top of the market is a leading indicator of what's to come for the rest.

I'm not saying it's an all out crash, but "normal" for decades was msrp or under and inventory measured in days / weeks / months available not lead times. I don't think it's saying the sky is falling to propose things may try to revert back to that.

[GW44]

Originally Posted by ajw45

Additionally, China luxury sales were slowing before they went on lockdown. When things do open up again I don't expect the same boom as the first lockdowns where people came out and went straight to Louis Vuitton.

As for cars, agreed. Sure there are still markups for some Kias but the big mark-ups for things like Gwagons are gone. IOW, the cars that people NEED can still command a slight premium but the one's people desire are starting to get back to normal and that demand slows. Usually the top of the market is a leading indicator of what's to come for the rest.

I'm not saying it's an all out crash, but "normal" for decades was msrp or under and inventory measured in days / weeks / months available not lead times. I don't think it's saying the sky is falling to propose things may try to revert back to that.

Maybe in the US (pretty doubtful imv) but certainly not here in the UK/EU. Client of mine has just agreed to buy an 8 month old, 4k mile G63AMG for £38k over List today - and that was "value" for a car that now has a 2+ year wait list and getting ever longer as MB won't even take new orders here now.

[911AP]

Originally Posted by ajw45

Additionally, China luxury sales were slowing before they went on lockdown. When things do open up again I don't expect the same boom as the first lockdowns where people came out and went straight to Louis Vuitton.

As for cars, agreed. Sure there are still markups for some Kias but the big mark-ups for things like Gwagons are gone. IOW, the cars that people NEED can still command a slight premium but the one's people desire are starting to get back to normal and that demand slows. Usually the top of the market is a leading indicator of what's to come for the rest.

I'm not saying it's an all out crash, but "normal" for decades was msrp or under and inventory measured in days / weeks / months available not lead times. I don't think it's saying the sky is falling to propose things may try to revert back to that.

Can you hook me up with a G 63 at MSRP? I'll buy it now. Anywhere I look they are 50-100k over.

[DonLee]

Originally Posted by ajw45

Additionally, China luxury sales were slowing before they went on lockdown. When things do open up again I don't expect the same boom as the first lockdowns where people came out and went straight to Louis Vuitton.

As for cars, agreed. Sure there are still markups for some Kias but the big mark-ups for things like Gwagons are gone. IOW, the cars that people NEED can still command a slight premium but the one's people desire are starting to get back to normal and that demand slows. Usually the top of the market is a leading indicator of what's to come for the rest.

I'm not saying it's an all out crash, but "normal" for decades was msrp or under and inventory measured in days / weeks / months available not lead times. I don't think it's saying the sky is falling to propose things may try to revert back to that.

it was slowing down not because of the lockdowns. it was slowing down because so much money was evaporated from the market, due to government putting pressure on its own tech companies, in addition to the SEC threatening to delist them off the US exchange.

The most concentrated market of watches is in HK, and we see how poorly the stock exchange has been in addition to the economy lockdowns (before the Chinese ones), people have been offloading watches lower than C24 prices to quickly get emergency cash. When appetite for risk comes back, watches will rise back faster than they fell.

[Xtreme123]

Originally Posted by 911AP

This ^ A Kia is selling for over MSRP still....



Then don't read the thread? Some of us think it's fun to have these debates.

The people who get a kick out of these debates need help!

[Mini2]

Originally Posted by GW44

Jeez, aren't there enough posts in the main Rolex discussion forums about the sky falling down in the next 10 minutes

Can't we just enjoy our watches and ignore the forum keyboard experts talking the market down and, frankly, squeezing the enjoyment out of the hobby?!

(Rant over)

Only sky falling down I like to read is about chicken licken

[thomaspp]

Originally Posted by Bearxj86

Agree that recession fears will affect prices, do have some big ticket drivers I am wondering?

So what happens when China (25% of global watch demand) reopens? What happens if the war in Ukraine concludes for better or worse?

haha dude! China and Ukraine won't matter all that much with global recession.

[Watchandhoop]

Prices are still higher then they were in early November... In November I got offered 15500 Blue for 57k...

[ts3]

Me thinks the message hadn't gotten through to today's Phillips Royal Oak auction.

[joa]

> Me thinks the message hadn't gotten through to today's Phillips Royal Oak auction.

+1
correct)

[mickyd329]

Being in the car business, I'll chime in on that portion of this debate. Currently, there is more demand than supply for new cars and looks to stay this way for at least the rest of the year due to supply constraints. Most cars are being sold at or above MSRP with deposits on incoming units. 30 years in the business and I've never seen anything like it.
All things come to an end and I'm sure we will come off these highs in the near future. More than likely Q1 or Q2 of 2023 from what we see. We are starting to see some price compression in the pre-owned market as values have sky rocketed over the last 18 months. I'm sure new cars will follow at some point.

As far as watch prices go, I'm not sure. I certainly don't think the current prices are sustainable long term. I would bet we will see some kind of demand destruction at these premiums at some point where the prices will have to correct in order to meet demand at the prices consumers will be willing to pay.

Having said that, I don't care what the watch prices do as I buy them to wear and enjoy. If their worth more than I paid, then that's just a cherry on top.

[GW44]

Originally Posted by mickyd329

Being in the car business, I'll chime in on that portion of this debate. Currently, there is more demand than supply for new cars and looks to stay this way for at least the rest of the year due to supply constraints. Most cars are being sold at or above MSRP with deposits on incoming units. 30 years in the business and I've never seen anything like it.
All things come to an end and I'm sure we will come off these highs in the near future. More than likely Q1 or Q2 of 2023 from what we see. We are starting to see some price compression in the pre-owned market as values have sky rocketed over the last 18 months. I'm sure new cars will follow at some point.

As far as watch prices go, I'm not sure. I certainly don't think the current prices are sustainable long term. I would bet we will see some kind of demand destruction at these premiums at some point where the prices will have to correct in order to meet demand at the prices consumers will be willing to pay.

Having said that, I don't care what the watch prices do as I buy them to wear and enjoy. If their worth more than I paid, then that's just a cherry on top.

Great post on both the automotive and watch front Mike.

I’ve also got a couple of businesses in the same sector as you but here in the Uk/EU things tend to change quite a bit slower. So the huge demand vs. diminishing supply model (new and used) is actually getting worse week on week/month on month here and I personally don’t see it getting any better until late 2023/early 2024 at the earliest.

I really don’t see it normalising until 2025 but that assumes we don’t have another shock to the system like Brexit/Pandemic/WLTP/Ukraine or a cataclysmic Worldwide recession…..again!

As for watches I’ve always applied the same mantra and it’s served me pretty well for my own collection as it seems to for you also.

[911AP]

Originally Posted by GW44

Great post on both the automotive and watch front Mike.

I’ve also got a couple of businesses in the same sector as you but here in the Uk/EU things tend to change quite a bit slower. So the huge demand vs. diminishing supply model (new and used) is actually getting worse week on week/month on month here and I personally don’t see it getting any better until late 2023/early 2024 at the earliest.

I really don’t see it normalising until 2025 but that assumes we don’t have another shock to the system like Brexit/Pandemic/WLTP/Ukraine or a cataclysmic Worldwide recession…..again!

As for watches I’ve always applied the same mantra and it’s served me pretty well for my own collection as it seems to for you also.

I agree with this as far as the car market. I don't think we see any return to normalcy until 2024. As far as watches I think it's the same. I believe prices will keep going up until the supply starts increasing little by little each year. Also by then tastes will probably shift to something else. Then maybe a 5711 won't be like 8x MSRP it'll be 2-3x. I think people just have wishful thinking that this will end any time soon. I estimate another 2 years for watches at least.

[DonLee]

Originally Posted by 911AP

I agree with this as far as the car market. I don't think we see any return to normalcy until 2024. As far as watches I think it's the same. I believe prices will keep going up until the supply starts increasing little by little each year. Also by then tastes will probably shift to something else. Then maybe a 5711 won't be like 8x MSRP it'll be 2-3x. I think people just have wishful thinking that this will end any time soon. I estimate another 2 years for watches at least.

A car is still very much a necessity compared to watches, and most people who buy a car don’t already have 10 in their collection. Watch collectors are definitely going to take a step back, not from the AD, but on the grey market.

Nasdaq hit a 52 week low yesterday, while many stocks are back to 2020 prices. Watches? We haven’t even got back to Nov 2021 prices. But hey don’t listen to me. If you think watches won’t get any cheaper, you can go grab as many as you can now.

[Bearxj86]

Originally Posted by DonLee

A car is still very much a necessity compared to watches, and most people who buy a car don’t already have 10 in their collection. Watch collectors are definitely going to take a step back, not from the AD, but on the grey market.

Nasdaq hit a 52 week low yesterday, while many stocks are back to 2020 prices. Watches? We haven’t even got back to Nov 2021 prices. But hey don’t listen to me. If you think watches won’t get any cheaper, you can go grab as many as you can now.

Nasdaq did indeed hit a 52 week low but you are incorrect about "many stocks back to 2020 prices". Perhaps the ones you own?

Nasdaq index today = 12,144
Nasdaq index 2020 Feb 3 prior to Pandemic = 9,520 -Market is still up 27.5% or a CAGR of 13%
Nasqaq index 2020 Mar 16 pandemic low = 6,879 - Market is up 77%

[huncho]

Originally Posted by Bearxj86

Nasdaq did indeed hit a 52 week low but you are incorrect about "many stocks back to 2020 prices". Perhaps the ones you own?

Nasdaq index today = 12,144
Nasdaq index 2020 Feb 3 prior to Pandemic = 9,520 -Market is still up 27.5% or a CAGR of 13%
Nasqaq index 2020 Mar 16 pandemic low = 6,879 - Market is up 77%

there are a lot of stocks that have erased 2-4 year gains. most are tech stocks that went on crazy runs obviously but he's not really wrong. i posted some in another thread but even major tech companies like fb, netflix and amazon have wiped out 4 years of gains. even a once safe stock like disney is back to 2017 prices. then you have the ones like paypal that are down almost 80% from the peak. good amount of growth stocks are -70 to -90% down

[Bearxj86]

Originally Posted by huncho

there are a lot of stocks that have erased 2-4 year gains. most are tech stocks that went on crazy runs obviously but he's not really wrong. i posted some in another thread but even major tech companies like fb, netflix and amazon have wiped out 4 years of gains. even a once safe stock like disney is back to 2017 prices. then you have the ones like paypal that are down almost 80% from the peak. good amount of growth stocks are -70 to -90% down

I see these too. The question is which parts of the Nasdaq have held then or offset this loss...

I think the stay at home economy stocks are getting pounded and the rest have taken a pull back but not devastated...

Apple has done ok / well
Google as well

Etc.
Etc.

[huncho]

Originally Posted by Bearxj86

I see these too. The question is which parts of the Nasdaq have held then or offset this loss...

I think the stay at home economy stocks are getting pounded and the rest have taken a pull back but not devastated...

Apple has done ok / well
Google as well

Etc.
Etc.

definitely the stay at home stocks that were in a bubble got destroyed, and rightfully so, and i think we're just lucky that stocks like apple, microsoft, google, tesla (lol) have kept the overall situation from being an apocalypse for now

it's a pretty bizarre situation though imo because tesla is still hovering around 900-1000 somehow

[DonLee]

Originally Posted by Bearxj86

Nasdaq did indeed hit a 52 week low but you are incorrect about "many stocks back to 2020 prices". Perhaps the ones you own?

Nasdaq index today = 12,144
Nasdaq index 2020 Feb 3 prior to Pandemic = 9,520 -Market is still up 27.5% or a CAGR of 13%
Nasqaq index 2020 Mar 16 pandemic low = 6,879 - Market is up 77%

you do know that people are "investing" in watches are often investing in large cap growth and higher risk and growth stocks, naturally and not just the whole index.

The most popular being FAANG stocks.
Facebook, apple, amazon, netflix and google.

Among those 5, Only Apple and Google closed higher than their price 2 years ago. So yeah indeed a lot of stocks are back to 2020 levels


And besides I didn't say 2020 bottom. Nov 2020 Nasdaq was higher than today. So yeah the whole market is back to 2020 prices. I am right.

The point is if the stock market has dissolved so much liquidity, from the past 2 years, watch prices have moved very little in comparison. They haven't even gone back to Nov 2021, let alone Nov 2020.

If you want to compare the luxury market, LVMH stock has dropped over 30% from its tops, even more than Nasdaq or S&P. Watches actually haven't dropped that much imo.