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Old 18 February 2020, 01:33 AM   #1
The Argonaut
"TRF" Member
 
Join Date: Nov 2017
Location: VA
Watch: GMT Master 16750
Posts: 1,373
Nostradamus for 2020

Hi TRF,

How do you see the SS bubble playing out in 2020? I'm not asking about any specific watches, but simply for opinions--which is all they are unless you have a crystal ball--on how the Rolex, PP, AP SS bubble will change this year, if at all.

As I'm asking the question, I'll kick off. I think the bubble will deflate this year for two reasons. At the macro level, Coronavirus will likely be with us for a significant part of this year and will clearly impact sales, and may bring a measure of cold water to an overheated market. If you're worried about your life and health and that of your friends and family, watches are simply unimportant. Also, Coronavirus could continue its economic impact on Q2 and even Q3.

At the micro level, I think prices have peaked and the current current grey situation is becoming unsustainable (if it isn't already). I think there are still some who will pay the grey price for the social cache of the instant instagram buzz. However, it seems to me that more and more people are simply not prepared to pay the grey price, and are either waiting until the bubble deflates and ADs start getting the watches again or are moving to other brands. Either way, this will lower the pressure around "hot" pieces, which will start to lose some of their perceived "hotness."

I follow various grey dealer inventories and it seems the Nauts/Aquas/Daytonas/Skydwellers/15202s, etc., simply aren't moving fast at all. There are lots around, and more are coming to market. If greys were selling them hand over fist, we'd see larger volume turnover. We're not seeing that; what we're seeing is 1s and 2s selling but lots still available. I don't see a large volume of buyers willing to pay the grey prices to keep the bubble where it is.

I think grey prices will drop between 10-20% on many SS pieces this year, and none will retain the current price as of today. I think Daytona black dials will drop to $18-19k; white dial to $20-$22k; blue dial skydwellers to $19-21k; 5167s will go sub $30k, and likely hover in the $26-29k mark; 5164s to $45-48k, etc. I wont guess on the Nauts as I think these watches live in a different acquisition bracket and have a status outside of the watches listed above. However, I can see some Nauts coming down, such as those on straps.

I was chatting to a good mate yesterday about all this, and both of us were speculating as to what we thought would happen this year. I don't think Baselworld will see the announcement of lots of new, fantastic "hot" pieces. It didn't last year, and I think a period of consolidation is coming from the brands (which is also their way of trying to let out some of the air from the bubble. It maybe good advertising for Rolex to be king of the hill as regards current overheated demand, but it isn't good for them long term when lots of buyers move to other brands and discover the joys found therein.).

Thoughts?

Best,
TA
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