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Most investment assets do not double value in 3 months

  1. Syrte MWR Tech Support Dept May 22, 2018

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    Please discuss.
    This is quite obviously inspired by an observation of vintage watch sales posts here and elsewhere.
    Could have also written “3 weeks” instead of “3 months”. In other words: perhaps there is a point where the ridiculousness stops?
     
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  2. Emeister Donut-eatin desk-divin wannabe-astronaut fat dude May 22, 2018

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    I was never very good in my Economics class but seem to remember that beyond price being decided by where supply meets demand there are other influencing factors.
    I think location was one.
    Many of us perhaps look at the Internet in its entirity and consider it one location.
    Maybe certain 'dealers' believe that moving a watch from one forum to another presents their goods to a completely new market.

    Or maybe I missed the point completely :)
     
  3. jason10mm May 22, 2018

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    Well, certainly some event tickets (super bowl, concerts, etc) can do this, but I'd label them as "speculation" rather than "investments" :p

    I don't really understand buying watches with the express purpose of selling them, especially old stuff that can have a market drop out immediately (imagine what would happen if Rolex released a matte dial sub with thinner lugs and markers like a 5513....). About the only way this makes sense is if someone had the skills and supplies to buy badly worn vintage and could restore them into shape in such a way that had the "approval" of enough patrons to justify a higher price.
     
  4. shishy www.hpmor.com May 22, 2018

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    It's more of an addiction so I'm not convinced it will stop... Maybe not increase as rapidly though.

    Rationality out of da window, because it's very much a distinction between "objective" value and "perceived" value and the latter can be increased by a variety of reasons (especially when you start buying things bc they're "cool"/"popular"/other people like them).
     
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  5. sgrossma May 22, 2018

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    Short of a global financial market meltdown / recession, I think not.
     
  6. ConElPueblo May 22, 2018

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    I bought this last week for €50...

    s-l1600-23.jpg

    Sold as non-functioning parts watch at a set price on a national sales platform - if I were to put it in an open auction on a global platform, it would probably net me €150 and that's just the bracelet. The non-running watch still has a "value" of around €30-50 as a spare parts donor.

    As @Emeister says, location is a factor to think of, as is the format of the sale. I nearly never win anything on auction, but take high risks at BINs on eBay and various local platforms, often with good results.
     
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  7. ahsposo Most fun screen name at ΩF May 22, 2018

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    But this is just canny buying and selling. Nothing new here. I think @Syrte is reflecting on "bubbles" like real estate in some markets (like Miami for example) or electronic currency recently or tulips in the 1600's. I, for one, continue to be amazed what people will buy and at what price. But as long as there is another buyer willing to pay a higher price the game goes on...
     
  8. sog00d May 22, 2018

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    With other markets doing so well, luxury goods will continue to rise but it will be the first to bust once things go sideways. Til then, I'm sticking to in and around MRSP buys and waiting patiently for a correction. If it never comes and the market just stabilizes, well then I'll have to come to terms with spending that kind of money on vintage or sticking to modern pieces.
     
  9. Taddyangle Convicted Invicta Wearer May 22, 2018

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    Other than this message board, I am active on a real estate message board. I came across this chart today. While I have not been collecting watches for very long, but based on my 5+ years, I do see some commonality with this chart and the price of vintage watches. I am not suggesting people are refinancing their homes to buy vintage watches, but wow, it overlays quite nicely between 2012-2018.




    upload_2018-5-22_14-49-55.png
     
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  10. ConElPueblo May 23, 2018

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    And that is more or less my point. Unless a good is sold on the open market with an equal opportunity for all interested parties to stake their highest bid AND the same item was listed on the same conditions to the same group of people, an increase in achieved price of 3x the first amount means very little. There are a huge number of variables at work.
     
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  11. Delbok May 23, 2018

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    Please bear in mind the vintage watch market has been global for years especially as we are all well aware in this forum that we come from all over the world. I respect your chart @Taddyangle and I like to look for explanations through a rational economic approach but these corrections are really hard to predict/anticipate. For regular global markets it is already so hard to predict whereas you are taking only economical facts into consideration so for our unreasonable unregulated watch world it is even worse !
    Remember one thing, only one person who's ready to put the money on the table for one piece (remember Philipps auction 8 days ago...) can make the entire market moves, which is of course definitely not the case for regulated markets
     
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  12. neilbardsley Thought about a Speedy, got a Speedy May 23, 2018

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    Sorry what watch/asset have doubled in value in 3 months?
     
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  13. Ree May 23, 2018

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    I think speaking of supply and demand, the increased exposures of vintage/collectible watches in Social Media (especially Instagram) has created new, additional demands. Coupled with the idea of FOMO and "Mainstream Media" discussing record breaking auction values, I think newcomers can be lured in quite easily.
     
  14. STANDY schizophrenic pizza orderer and watch collector May 23, 2018

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    The more members we have the more sellers we have, which leads to more higher margin sellers we have and the more profiteering over collecting members.

    This all drive prices going up across the board.

    Have watched many a profit flipper appear in the last three years in the watch world and even the websites that used to show us nice watches are more interested in selling now. ( even a watch strap company I used to use is selling second hand watches )
     
  15. neilbardsley Thought about a Speedy, got a Speedy May 23, 2018

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    https://en.wikipedia.org/wiki/SWAG_(silver,_wine,_art_and_gold)

    I think it's all about the credit crisis of 2008. Super low rates. Governments injecting liquidity/cash. People searching for return and wanting something that they can actually hold/enjoy.

    Bitcoin has just fueled people's willingness to believe a good story without understanding much about it. There is often another sucker out there. the watch market is ripe for this.

    It all bad news for those of us that like to buy/hold/enjoy as the hobby becomes more expensive.
     
  16. Tony C. Ωf Jury member May 23, 2018

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    To answer Syrte's question, it's known in financial market's as a "blow-off top". Simply put, when values go parabolic, people tend to jump in believing that there is quick and easy money to be made, yet there really are no underlying fundamentals to support them, and the unsustainable values subsequently deflate. It's just a matter of when, precisely.

    While there certainly are a variety of factors that have catalysed rapidly rising prices in the vintage watch market over the past eight or so years, some of them "organic", the creation of massive amounts of debt (aka "money") by major central banks around the world has been the primary catalyst. As a result of that unprecedented economic experiment, all major assets classes have soared in value, including collectibles.

    The Fed, which is (still) the most powerful of those CBs, has reversed course now, and interest rates are creeping up. This is already causing problems for stock and bond markets, and some high-end property markets as well. Smaller collectible markets such as Fine Art, vintage cars and watches, are showing signs of having hit tops as well.

    There is a tendency by some to be myopic when discussing this issue, as the most sought-after models are not reflective of the broader market. I typically buy in the middle of the vintage watch market, by which I mean a few hundred to a couple of thousand (USD), and, as I have been saying for some time now, there is a clearly discernible bifurcation taking place. While those with serious money to spend continue to push up prices of the most obvious brands/models, there are many examples of attractive, high-quality watches that have been under downward price pressure. I know because I buy more than a few of them!

    While it is true the the best examples of the best watches will hold their values better than most over time, anyone who believes that the current trajectory at the top of the market will continue for long will be in for a rude awakening.
     
    Edited May 23, 2018
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  17. STANDY schizophrenic pizza orderer and watch collector May 23, 2018

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    Posted by me in another thread

     
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  18. Archer Omega Qualified Watchmaker May 23, 2018

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    If this were true, the value of 2915's would have dropped when Omega released the 60th Speedmaster....but clearly they didn't.

    As much as there will be a market for the "new" version of a vintage watch, I don't think that means the vintage market goes away or drops in any significant way.
     
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  19. cicindela Steve @ ΩF Staff Member May 23, 2018

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  20. BenBagbag May 23, 2018

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    Can I mention Polerouters as an example? ::book::

    Seems like those jumped and then quickly settled back down to their sub $2000 range.

    I'm no hater, I've got one too. Just noticing a trend and wondering if there is anything to it