Are you saying that Rolex will defy the laws of supply and demand? When there's no demand, prices will fall. There will be discounts. How much of a discount depends on how long the economic shutdown lasts. I think this will be long and will likely be worse than 2008.
You can dream until the cows come home, but you aren't going to see discounts on sports models. And Rolex isn't even producing any watches at the moment. I see no rationale for your prediction.
Are you saying that Rolex will defy the laws of supply and demand? When there's no demand, prices will fall. There will be discounts. How much of a discount depends on how long the economic shutdown lasts. I think this will be long and will likely be worse than 2008.
You do realize that there are literally millions of sports models floating out there? When the economy tanks and next to no one is interested in buying expensive luxury goods, and those who are hoarding it right now need cash, what do you think will happen? You can already see price declines just one week into the shutdown in the U.S. Again, just extrapolate - one month from now, two months, six months. Those secondary dealers are the first to react by reducing prices. Then the hoarders who mistakenly thought that hoarding Rolex watches is a no brainer in "investing" their funds, well, they're in for a rude awakening. They will also start to dump their watches when they see prices declines or they need funds due to the depressed economy. It's a self reinforcing cycle really. This pattern has repeated over and over in different bubble markets throughout history.
I'm not sure I understand the claim you are trying to make. In the first quote above you seem to be suggesting that Rolex itself will offer discounts. Based on historical precedent, I think this is incredibly unlikely, and I believe that @Evitzee was responding to this. But then in your response to him, you presented a moving target, and seemed to refer to flippers, which is a different story entirely.
As a manufacturer, Rolex has always held the line on discounts, rain or shine, and I really doubt that they will change this policy. ADs are strongly discouraged from offering discounts, but they have quietly done so at some times in the past, but generally not for the most desirable models; still it's a possibility that it might happen in isolate instances. If you're talking about flippers, then absolutely, you may start to see some NIB pieces being sold below MSRP by resellers if the situation becomes dire enough.
Yes, I wasn't talking about Rolex. Of course Rolex is going to hold firm on their MSRP. But, that doesn't mean that ADs or others will. ADs use to offer discounts on Rolex watches. Gray market dealers will as well. The used market will see a lot of supply and have the biggest discounts.
K killer67Like I said ADs will offer no discount below MSRP on stainless sports models now or after Covid 19 has settled. Platinum day date and PM will continue to get discounts as it did last year and the year before that. Grey market dealers that acquired a ss pepsi at 15,5 and resell for 17,1 will possibly discount their price maybe even below their acquisition cost.
Economic laws are still in effect - there are way more people that can buy a 9K watch at full price than there are ADs offering them (recession/depression be damned). The few people I know with a deep bank account are looking for cheap stocks, discounted Porsche 930s, 993s, market value PP and Rolex, real estate, etc. They could buy 10 GMTs today if they wanted; and I suspect there many more of those people in the world.
Those are the very people who like to follow the herd. They won't be buying when they see demand disappear and prices dropping. We are heading towards a recession for sure. If this shutdown lasts more than a couple of months we're heading towards depression. In 2008, Rolex watches, hell any watch, was in deep discount if you can get anyone interested in the first place. If we do hit a depression, you'll see a flood of millions of Rolex watches hitting the market as people with collections big and small trying to sell to raise money for living expenses. I won't be surprised to see used Rolex selling at 50% if that were to happen. You can already see a lot of good brands selling at those prices in the used markets now. Blancpains, for example, are selling at those prices now (obviously, not every model) if you can get anyone interested in them in the first place. I even see watches like F.P. Journe selling at 60 cents on the dollar now on fleabay. People who can afford F.P. Journe are the type of people with disposable incomes you're talking about.
The other thing I would like to point out is that Rolex watches and other collectibles follow the great fool theory. That is, the price depends on someone more foolish to come along and pay a higher price for it. There's no inherent intrinsic value in a Rolex watch, unlike stocks or other income generating assets.
2008 was still early in the watch game for many. Just before the GFC even Speedmasters we’re going at under $1000 as a regular price, hey we only started here in 2012 and had a few thousand members for a couple of years. It’s the 2015 onwards when the watch game exploded
2008 was not a bad thing for every one.
Aussies were snapping up watches after the GFC with $1 getting $1.12 US
Different now when $1 is lucky to get you 60 cents US
Sure, we may still see Asians buying as they have better control of the pandemic. But there's no doubt in my mind that a lot of supply will be coming into the market soon by those who are holding to a lot of watches here and abroad.
Looks like it's starting...
Background: I'm a new Omega fanboy and have been admiring my co-workers vintage Pepsi. When I enquired about the cost/availability of one at my local AD I was nearly laughed out of the store.
So I went home and starting research Rolex and the SS "shortage" issue on the rolex forum but I still don't understand the rolex craze. I think they are beautiful watches, have amazing functionality, history, and style. However, EVEN if only paying retail for a submariner, why would I pay $7.5k when I could get a seamaster for $4k? Not to mention the insane grey market prices on the submariner and GMT's!
People keep mentioning a Rolex bubble, but it seems like that is non-sense. Even the 1 million produced by Rolex will not adequately supply the demand in China, with it's exponentially growing middle class.
I guess my question is, why are people buying into the hype and paying double/triple retail for these SS watches!? When you get into the $15-20k price range it seems like there are much better watches you could spend that money on!
Please educate me!
interesting view on SS craziness at this sotheby's auction
https://www.sothebys.com/en/buy/auction/2020/watches-weekly-patek-philippe?locale=en
looks liek the market is very much alive. these have only been up a few hours
W wjgesqChina supply will be dying down soon
