Well, we could start with the entire western financial markets; they went 'pop' in 2008, and only massive state intervention prevented chaos. On the back of that, all consumer markets would have been wrecked.
Everyone on TZ is helping to repay the cost of that...indeed you could argue that the gross inflation in luxury goods such as watches is because wealthy consumers can no longer 'trust' banks and financial markets. So they buy appreciating goods, which give a greater return....for now.
Last edited by paskinner; 7th November 2018 at 15:05.
‘Stocks and shares’ (and commodities) means all sorts of bubbles in all kinds of things. Bubbles happen all the time, most recently in bitcoins. With watches though, it remains to be seen. For as long as people still want particular watches, high prices are not automatically a bubble. In the art market, high prices for Picasso do not imply a Picasso bubble. There was however a Damien Hirst spot painting bubble, which has now burst.Originally Posted by Man of Kent
Last edited by Itsguy; 7th November 2018 at 15:11.
Worth a read if you're interested in human behaviour and bubbles/irrational behaviour through history, Extraordinary Popular Delusions and the Madness of Crowds, by Charles Mackay, first published in 1841 it's still in print.
Fair point. Maybe a slowly deflating party balloon :).
There is normal price inflation to take into consideration as well, I dont think its all down to a bubble
Classic / rare car prices went nuts in 2016/2017 & have come down a bit now.
Andy
Wanted - Damasko DC57
Circa 1990, Rolex Bubblebacks were some of the most collectable watches in the world and they were priced as such. Look at them now. Panerai definitely "burst" from their early collector frenzy high as well.
I think it will I hope it does happen.
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From now on, keep an eye on the watch trade on a month by month basis. Rolex aside (and a few models by other brands), the market is already collapsing. The last couple of months have been interesting.
There was a bit of insanity around the Milgauss GV when people assumed it was a limited run at launch. Look at it now. Every bubble bursts though. I especially find it hard to believe that a mass produced product from Rolex can sustain those prices.
The collapse of the retail market can have the opposite effect on used, when demand is actually transferred to the alternative cheaper supply.
The Chinese and far east market downturn will mainly affect Rolex and, given how strong their demand is elsewhere, it'll probably only recalibrate that market to a less frenetic scenario by bringing demand to nearer supply. Collapse; nowhere near IMO.
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To be honest I wouldn’t know how to track watch trade prices, apart from look on Chrono24 and the prices there seem too high for the handful of watches I do know something about.
What makes you say prices are collapsing? Just curious as I have no way of knowing.
My dad has a closet full of swatches
...
BUBI 0_0
Care to expand on that a little? Which models are you talking about? High prices of hard to source new Rolex models for instance feels like a special case, and not so much a bubble as supply and demand working as expected. Eventually supply may catch up with demand and the recent high prices are simply the cost of getting one early without being at the top of the list. You wouldn’t really expect those prices to hold up unless the model is made in very low numbers. I don’t see much evidence of sought after vintage models going down though.
The ‘bubble’ is the notion that watch prices live in a world of their own. In truth they are subject to far wider influences. Anything that depresses economic growth and confidence will eventually hit luxury goods.
Will it happen? Of course, historically , economies go in cycles. What we can’t know, is the timing...
Luxury watches are toys for grown ups, not forms of investment.
Not up in the watch world but dad tells tails of when E type's plummeted to a fraction of their value overnight. Theres signs of it coming again, a lot of high end stuff such as gt3/355/360 etc sitting months on end despite price drops. Recent stuff is selling ok due to it being on a standard place on the new car depreciation curve, and pcp. I'd be worried about the modern classic market at the minute, and not just the stupid examples such as £30k+ 205 gti's.
I remember that period alright JP. My memory has that wave riding well into the late 90's. Regular web articles by "respected collectors" waxing lyrical about early Oysters, Bubblebacks and Princes. Near overnight they and the watches faded away. I didn't look at the values of them TBH as I'd gotten shot of the couple of examples I had, but I certainly noticed the absence of articles and early forum posts on them. There was a similar if less pricey trend for collecting early 20th century American wristwatches. The more Art Deco the better. That was more a US collector market from what I could see. I would say Trench watches kinda peaked around this period. In the sense that even ropey looking examples were selling and at solid enough prices(since then that segment dropped and has remained stable). Going much further back, when I was a teenager in the 80's getting "old watches" in junkshops with pocket money, pocket watches were considered the collectibles.
I'd reckon, at least with the original of the species with Rolex movements from the 40's, that supply was so tiny that when collectors bought up what was available the market stagnated. I've seen that happen with a few areas. Not a bubble bursting, more stagnation. Issued military watches could be placed in this category to some degree and follow the general trajectory: First only collected and talked about by small numbers of people and relatively cheap and plentiful, then get "cool hunted" and go more mainstream, with new collectors coming on board, more examples show up from the bottom of drawers, prices start to climb, then collectors get their pieces(like a full set of the "Dirty Dozen") and prices continue to go up, but supply is constrained and prices remain high at a collectively agreed market value, but sales are sluggish. IMHO a sign of this stagnation can be ebay listings. In the early stages there are many more auctions than BIN listings, when the market is stagnant the reverse is the case. The vintage movie poster hobby had the same trajectory.Panerai definitely "burst" from their early collector frenzy high as well.
There's a bit of a difference between vintage and new(or "secondhand" rather than "vintage) markets though. With actual vintage watches they're not making them anymore, so supply is always going to be finite. With new that's not in play, except when the manufacturers create a a false finite supply like Rolex in the last few years.
+1 though I'd consider the 205 GTi's prices not such a concern IB. They were outlier prices for very rare extremely low milage like new examples of an "iconic" hot hatch. They're one offs and after a few months of auction fever over similar cars the basic values of average vintage 205 GTi's didn't go mad. It's an area like air cooled Porsches and daft value rises across the board often regardless of condition or model that would be much more of a concern and almost a perfect example of a bubble. Unlike the 205 GTi's with 1000 miles on the clock, air cooled Porsches are not rare and there are many many thousands of them out there and were sold over decades. I can see people losing their shirt "investing" in them. From what I can understand of it for a bubble to form the market needs supply and most of all the perception in the market that supply is a lot more finite than it actually is. Truly rare items of which only a handful exist can't sustain a bubble, because a bubble needs a larger population of buyers and sellers willing to buy into the perception.
Stop talking sense. Theres a 205 rallye on car and classic at the minute I just cant stop looking at.
I can recall Michael Winner moaning about the catastrophic collapse in the value of his watch collection sometime in the late nineties. This was an article of his in the Sunday Times. I once staked £500.00 against a JLC in a game of poker and at the time it seemed about right. I can remember being told a few years later that it was nowhere now worth the £500.00. However since then the price has more than recovered so it's no big deal.
I never sell watches so the value does not worry me but I would love to see a crash in prices, if only for a couple of years as it would be a good buying opportunity.
Last edited by Mick P; 19th May 2019 at 11:01.
I hope the classic car market collapses as I’ll be picking up a few!
They will always recover as ‘they ain’t making any more’...
As for watches, I have never bought into ‘over list’ purchases. All mine were used from original owners or new from AD. So I’m fairly cushioned against a deflation.
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SC seems to have burst ..... wait , wait I think I see the first green shoots of recovery!
As has been already mentioned it’s all down to easy credit and cheap lending
If this stops being the case sell everything you own ;-)
To answer the OP's question for those who have bothered to read his post, I have been in the hobby since mid nineties.
From then till now, the prices have steadily crept up. There have been ups and downs in brand and model specific cases but I cannot recall anything akin to a bubble burst. There was a thing me when Panerai were very hot as people were just discovering Panerai and they were the hot new thing. Since then the craze has cooled down but no bubble was burst. They still make and sell expensive watches. For a while certain Omega vintage like the Big Blue and Omega SM 1000m were selling for crazy prices driven by Omega Antiqourium and those have since receded. Kobold Seal were very hot for a while but sell for much less now. Same with military issued Certinas and Eterna Superkontikis. Someone mentioned a 'crash' in mid nineties. I don't recall it as I was just getting into the hobby.
The fluctuations have mainly affected preowned watches. New watches have steadily been on the up. Which leads into the question if there is a large scale bubble at all. Most brands and models have a substantial drop in value as soon as you walk out of the store. So, there is not much scope for speculation, an essential component of a 'bubble'. There is somewhat limited speculation when it comes to vintage watches or difficult to procure modern watches and that shall certainly see a fall with an economic downturn. Another question is whether the young generation of today as they grow older will embrace wrist watches or not. I don't think anyone knows the answer.
Interesting topic and discussion. Thanks
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‘Watch’ Bubbles burst when supply outstrips demand. So the Rolex and Patek bubbles are sustainable until hell freezes over..
So..... five years later. Any burst bubbles yet?
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