There's a worry that the rising prices aren't sustainable, that a bubble is being created.
Presumably the definition of a bubble is something that bursts, leaving people with significant losses and worthless investments? Has this ever happened with any watches in the past?
I've been thinking that if prices showed any sign of not only stopping rising, but beginning to drop, people, as a whole, would simply stop selling, and the shortage that created would keep prices stable. But is there any evidence from the past that disproves that?
People with long memories, regal us with your tales.....
(people who want to argue about whether a bubble is being created, the thread you want is here: https://forum.tz-uk.com/showthread.php?t=437283)
This is one one the reasons ,I’ve not jumped into the Rolex hype,I’m not saying it’s the same but I see watches being a bit like classic cars,they go up and down,quite high at the minute.
You probably need someone who’s older and probably seen it happen.
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In 2007 you would have found 95% of 'experts' predicting a steady rise in the markets. Then came 2008 . There can be no such thing as endless price inflation. And that must include watches. The big rises are all recent, just give it time....
So, yes the bubble will burst; no, we don't know when.
Hopefully not like this :)
https://en.wikipedia.org/wiki/Tulip_mania
What happened in 2008 ?
Katy Perry spent 5 weeks at number 1 with 'I Kissed a Girl'.Originally Posted by -Ally-
Writing "yes" makes it appear that you're answering the question that has been set, but you haven't.
I couldn't care less about anyone's opinion on what might happen, nor their reasoning, I'm asking a straightforwardly factual question: has what people fear will happen happened in the past?
I don’t remember it, but I hear the “quartz crisis” of the 70’s/ early 80s did huge damage to the Swiss mechanical watch industry as a whole.
I don’t know what that meant for used (or even new prices) but if demand for new mechanical watches slumped during that period, I imagine used prices would have suffered.
Perhaps there are some members that might be able to confirm what happened to new/ used prices of the likes of Rolex etc during that time??
All bubbles burst. Property, gold, BC, antiques, everything.
If you don't know you are lucky ...
https://en.wikipedia.org/wiki/Financ...7%E2%80%932008
And your example of a bubble bursting in the watch market is....?
I don’t recall this myself and do not know how factual it is, but I recall reading a watch internet article that wrote about the AP Offshore End of Days watch trading for £100k used during its first year or so of release but the article went onto say that the subsequent concerns about DLC longevity and the later releases of similar looking but more hardy AP Offshore watches made from ceramic and carbon went on to significantly damage the values placed upon the End of Days model with collectors and investors, with prices now in the mid £20 thousand for a used example.
So if the above is accurate and I don’t know if it is, it would seem that specific models bubbles can burst due to fashion taste changes, loss of uniqueness and improved manufacturing materials utilised within newer releases.
i don’t think this answers your original question but it does provide a potential view of how values could tumble and how fragile the must have thing can be.
I meant with watches, during the crash.
I think Haywood would be well placed to provide an answer. Maybe he'll be along soon?
I do recall him writing at one point that if someone could predict the Rolex 'bubble' bursting, he'd appreciate the advance notice so he could plan to buy stock...
Would any of US care?
I've been liquidating my collection over the last few months and into the new year but every watch I've bought I've been more than up for keeping if I didn't flip it-because I'm a watch guy after all!
If the spivs who brag about wearing a rare model have to shut up for a few years then would it bother any of us? TO be honest, a modest downturn in values and increase in availability would probably only reverse my sell off-as long as I could still afford to put the heating on (assuming there is still fuel in the pipes to do so come our impending financial doom that is).
During the financial crisis high end watch prices fell. A dealer I know was offered a lot of Pateks daily from people trying to offload. Car prices took a huge hit too. These are the first to go
Was it that used prices went from just-below MRSP to much-lower-than-MRSP, or that used prices were beforehand going way above MRSP, such as we're seeing now?
Apparently that End of Days that went crazy immediately after release was an LE of 500
The EOD has been a long time grail of mine, and several times i’ve gotten close to fufilling the dream.
Prices have definately dropped out of them as I’ve been following them for years.
Early 2000s sky was the limit on them.
2008 im fairly certain they were still in the 40-50 region.
2016 aroung 30-35
2018 20k is the lowest i’ve seen.
But full sets, non marked DLC, are hard to come by.
The straps are still availiable from AP though.
I’ve been in finance for 25 years this year and seen the economy and markets struggle maybe 3 times with the 07/08 credit crunch being the worst.
Whilst my experience is not historically watch specific I feel I’m quite well placed to have a good stab at an answer. In short the ‘world’ ticks over for the majority of us as long as money is freely available. By that I mean you can borrow money and borrow it a) easily and b) cheaply. Whilst that is the case house prices will rise, stock markets will also (in the main but not always) rise, new cars will be sold, luxury holidays will be taken and high end goods will flourish.
We’re at a stage when money is ridiculously easy to come by - mortgages under 2% and credit cards that are interest free. When lenders tighten lending policy and cheap credit cards and loans disappear it will have a knock on effect to higher end goods and that includes watches. Some manufacturers will manage a credit crisis better than others and therefore their watches will see less of a bubble burst. I can hazard a guess at which ones would suffer less than others by saying Rolex SS professional and Patek . . . . . However the highly sought after Nautilus only a few years ago wasn’t so sought after. So who knows.
Maybe if and when the next one happens people will be able to go into an AD and actually buy what they want.
The aptly named Rolex Bubbleback bubble maybe?
Weren’t they silly money a few years ago and now nobody wants them.
Rolex bubble backs are a good example of watches that were ‘in’ and collectible and then price crashed as collections moved into sports Rolex.
Most relevant recent example - some of the mid/late 00s special editions. They certainly were over priced and the market did correct. One specific example is the Panerai 127 I think at one point people were asking $25k for one! I think it’s around half ish of that. Though one reason for the demise could be the tons of SEs that followed
I was going to buy this until i read this thread...£85000 saved.
https://www.ebay.co.uk/itm/Rolex-Com...fTFu:rk:4:pf:1
I was going to say. I wasn't into watches at that point but the Bubbleback is a cautionary tale for today.
I'd hazard a guess that the current interest in sports watches is being driven by people who grew up in a certain era and are at a certain stage of their life. There's nothing to say that their interests will be the same as the generation incoming.
Used prices were below rrp and fell further. There were a lot of cheap Pateks about. Porsche prices fell hard too. So this maybe wasn’t a bubble but more a fall in luxury goods in recession.
We now have a bubble for sure in my opinion and so the fall will be harder. 3 years ago I bought a 5711 for 14k then again at 14k. It was always a under rrp watch. Now look at it.
Panerai was in a large bubble like others mentioned and have fallen hard. A lot of those speculators have moved into vintage Rolex, sports Rolex and now patek, they are the same people that pumped up panerai. I find that telling for sure
There was a huge bubble in the mid-90s about plastic Swatch watches, which spectacularly deflated (and then came back).
Suppose that was a proper bubble which burst.
https://www.nytimes.com/1992/05/10/s...zy-swatch.html
Someone who lies about the little things will lie about the big things too.
Rolex sports and vintage are almost like their own currency, yes prices may drop a little during adverse times but once a limit has been reached and deflated prices generally hit higher highs next time round..
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The only two i can think of was the vintage Rolex market for early bubble backs and even the Rolex Princes. Prices did drop around 2000,but have slowly recovered for nice watches. The other is Pocket watches, which have been quite stagnant unless super special.
They was also lot of hype around limited edition Swatchs, but it was a very niche market and I imagine lots of collectors moved on. No idea what the market is like now.
The simple fact is that they dont make early watches anymore and Collectors have hoovered up many of the good ones and have them stashed in safes - so the are rare and in limited supply. No capital gains tax - make it a good hedge investment (for now) especially with low interest rates.
Whoever does not know how to hit the nail on the head should be asked not to hit it at all.
Friedrich Nietzsche
Not answering your question as I had no real interest in watch values in 2008 but I did see used car values nosedive at the high end stuff.
Having watched the massive rise in vintage sports Rolex in the last 2 years there has to be some associated risk when the next recession hits.
When people's jobs go it will be one of the first things to go.
If the Rolex sub is used as a "typical" example, then no. Graph below doesn't show any sudden significant decrease. Maybe one is due?
Anyone who is scared should sell high, now.
Thank you for this article.
I distinctly remember reading an article in the Sunday Times where Michael Winner was crying in his goblet of vintage wine that his Rolex collection along with his war time comics had plummeted in value. However he also quite correctly said that fools buy at a peaks and wise men buy when low.
I cannot remember the precise time but would guess it was in the early nineties.
It’s going to be a generation thing surely. Those of use who grew up with our parents or friends wearing a 5513 style sub are going to want one when we can afford.
Rolex never go backwards in their styling, the new ceramic watches are an eye sore to me but will they be the future classic for the Instagram generation that drool over them now? If so the older 5 digits will fall off the radar and we’ll all be dead and their prices may plummet.
I guess it’ll depend on what Rolex come out with next. IMO it’s about how many steps away from current technology and styling things are. If there’s a new ‘carbolex’ bezel and a really squared off case then suddenly the maxi may look old school, then the 5513 is getting towards bubble back territory.
Rolex has an amazing buzz around it’s new models but you always get the collectors who want the previous gen which is the 5 digit. I think it’s all about what the future holds for how long the bubble lasts.
I kind of see the Watch bubble not so much as a bubble but a magnifying glass that moves along at the same speed as technology but just xx years behind. Everything in its path will get magnified and everything in its wake will shrink.
I think military and comex rolex would probably hold pretty well in a downturn. If the dealers have stock they might dump them, but the collectors would probably just hold.
I didn't know what a Kiki Picasso was before I read that. From what I can tell it's something to do with massive profiteering. Well, it was.
"A man of little significance"
My view is that size is the key. If you keep your watches to say 36mm - 40mm you will be fairly safe.
No one buys a 32mm/34mm anyone and yet my father wore a 30mm watch for over 30 years until his death in the seventies. I doubt if anyone would even take the watch off me for free because it just looks dated. This is not a serious offer, I am just using it to make a point.
I think the main risk is the watches that are over 40mm, they look fine today but they will be the first to eventually go out of fashion. They may be regarded as stupid looking as flared trousers look today. How that will affect Rolex is unknown but it will be a threat in the future.
And if you buy a Grand Seiko Hi-Beat you'll quickly work out you don't need any of your other watches and can sell them before prices plummet. Potential problem solved!
"A man of little significance"
Hard for us to imagine, but suppose fashions just change...and suddenly mechanical watches aren't desirable. Who can predict fashion and changing tastes.
No-one knows the future. Personally, I enjoy watches too much to confuse them with an 'investment.' If prices fell, nice watches would be easier to buy.
So an end to the price bubble is, overall, to be desired.
Yes but where's the excitement in that and it's excitement that makes life interesting.
It depends just who you are. I have 5 Rolex but have lost the urge to buy any more, basically I have enough to keep me happy. So for me, price escalation is good as it justifies the servicing cost of 5 watches.
However if you are starting out, price escalation is a PITA.
To save ploughing through the five pages of the usual tangential sludge, here are the answers so far:
Last edited by Der Amf; 7th November 2018 at 10:29.
This is what allows me to sleep at night without worrying too much about it. So long as I’m still thinking that if prices fall I’ll finally be able to get that Royal Royal Oak 15202ST / Vacheron Constantin 222 or what have you, then most likely everyone else is feeling the same way, in which case they are still desirable and prices are not about to tumble. The time to sell is when you actually don’t want them, assuming you are reasonably tuned in to the zeitgeist and don’t leave it too long. But that moment doesn’t feel like it’s come.
Having never bought a watch as an investment and merely as something to wear, this has never been of any concern to me.
It's about time we enjoyed wearing and discussing these pieces of engineering and beauty and stopped worrying about the future value in 10 years from now.
So your example of a bubble that has burst in the watch market is?
Andyg mentioned pocket watches. Subjectively that makes sense to me as I remember them being more expensive 30-40 years ago, based on one that I bought then. I paid £90 for it, probably worth £50 now.
More scientifically, I found this thread on NAWCC that at least indicates that the better pocket watches have declined in value over the last 10 years. It’s a pretty small data set but the guy seems to know what he is talking about.
https://mb.nawcc.org/threads/falling...prices.145169/
I guess that is a reasonable parallel to the potential for mechanical wrist watches becoming less valuable. As a kid pocket watches hadn’t completely died out in everyday use and were still seen as something to be treasured. These days they are only for enthusiasts. Maybe that will happen for mechanical wrist watches.
It makes sense, but is that really a bubble, or just prices gradually rising and falling as a technology is superseded and tastes change? A bubble implies a certain amount of senseless panic buying based on the idea that prices will continue to increase, until prices lose all contact with reality and buyers come to their senses and starts panic selling instead. As this thread shows, it’s hard to find many good examples of this in watches. Certain desirable watches seem absurdly expensive currently, but arguably that’s just supply and demand functioning normally. It’s not a bubble unless it pops. There are few examples in this thread because interest in watches has mostly been increasing globally, for quite some time.
You could however say that there was a bubble in the price of luxury goods in general recently, which popped when China brought in anti-corruption measures. This left a lot of unsold stock, but mainly lead to buy backs and watches being destroyed instead of prices falling. Conglomerates like Richemont suffered, but intimately they had enough in the bank to ride it out, and now the situation has stabilised.
I have always wanted an original Rolex GMT Pepsi.
The thought of shelling out £14,000 though and the bubble bursting the day after brings me back to reality.
Just Google the tulip bubble.
I'm just a very naughty boy.
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Other than stocks and shares, tulips, pineapples, or housing/land, I've never heard of anything else that has gone pop. I'm not convinced there's a bubble at all, let alone one sufficiently swollen to be reduced to vapour by over-inflation. I need convincing that there's ever been a watch bubble.......
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