What Makes Luxury Watches Lose Value?

dsio · Jul 22, 2021

Walrus
Ah yes the old “buy high sell low” investment method, got me a few times.

From dad:

“I better take a grand, nobody is ever going to be dumb enough to pay decent money for a Mk1 Sprite, it doesn’t even have doorhandles”
“These old SL Mercs are dinosaurs with lousy electrics, I better get out while I can”
“That Daimler SP250 I’ll just give away, nobody even knows what a Daimler is anyway”
“This Alfa GTV6 is only worth its weight in rust, $500 is better than the wrecker was offering”
“Nobody will ever decide one day to want a light blue Ford Anglia (Literally the exact color and spec of the Harry Potter one) so I’ll dump it at a scrapyard”

S.H. · Jul 22, 2021

dsio
From dad:

“I better take a grand, nobody is ever going to be dumb enough to pay decent money for a Mk1 Sprite, it doesn’t even have doorhandles”
“These old SL Mercs are dinosaurs with lousy electrics, I better get out while I can”
“That Daimler SP250 I’ll just give away, nobody even knows what a Daimler is anyway”
“This Alfa GTV6 is only worth its weight in rust, $500 is better than the wrecker was offering”
“Nobody will ever decide one day to want a light blue Ford Anglia (Literally the exact color and spec of the Harry Potter one) so I’ll dump it at a scrapyard”

I sold an extremely good exp2 three years ago thinking the price was right. The watch just did not please me, the dial and finitions were not worth 4 or 5k to me.

It doubled since then 🤦.

ghce · Jul 22, 2021

dsio
From dad:

“I better take a grand, nobody is ever going to be dumb enough to pay decent money for a Mk1 Sprite, it doesn’t even have doorhandles”
“These old SL Mercs are dinosaurs with lousy electrics, I better get out while I can”
“That Daimler SP250 I’ll just give away, nobody even knows what a Daimler is anyway”
“This Alfa GTV6 is only worth its weight in rust, $500 is better than the wrecker was offering”
“Nobody will ever decide one day to want a light blue Ford Anglia (Literally the exact color and spec of the Harry Potter one) so I’ll dump it at a scrapyard”

Reminds me of my uncle who left a Stutz Bearcat to rot away in his back yard before he gas axed it up and disposed of it or the Roller he sold for a hundred dollars because he was sick of it messing up his front garden.
Dont give a toss about the Rolls but the rust off a Stutz is worth more than the gold it weighs, oh well thems the breaks.

pdxleaf · Jul 22, 2021

dsio
From dad:

“I better take a grand, nobody is ever going to be dumb enough to pay decent money for a Mk1 Sprite, it doesn’t even have doorhandles”
“These old SL Mercs are dinosaurs with lousy electrics, I better get out while I can”
“That Daimler SP250 I’ll just give away, nobody even knows what a Daimler is anyway”
“This Alfa GTV6 is only worth its weight in rust, $500 is better than the wrecker was offering”
“Nobody will ever decide one day to want a light blue Ford Anglia (Literally the exact color and spec of the Harry Potter one) so I’ll dump it at a scrapyard”

Feel your pain. My father in law traded a 1953 Corvette for a 1963ish Renault Caravelle.

He was a mechanic at a Chevy dealer where the dealer had purchased the Corvette for his daughter. She drove it for a year and didn't like it. The dealer was trying to off load it on my father in law as he was a young guy who needed a sports car. Finally made it cheap enough so he bought it.

He drove it for awhile but said people kept hitting it. It was like they were looking at it and would then bump into it. So he traded it. That's like trading a Paul Newman Daytona for a Timex. They both tell time but we know where the prices went.

Still, it would have been fun to drive that Anglia around town...

Archer · Jul 22, 2021

Walrus
Is there a difference between an investor and a flipper?

Yes, at least in my view.

If I buy a modern Rolex thinking I'm going to wear it, but find that it's not for me for whatever reason and sell it quickly, that is a flipper. I think may collectors have just "not bonded" with a watch they that thought they would like, and have flipped them quickly. In the past, even with Rolex, this usually resulted in a loss.

But I personally would never do that, because modern Rolex a nothing but gaudy dreck to me, and I know I would never wear it. If I put my name on a list, and the AD sells me one, I would buy but only to sell it for a profit - again IMO they are ugly as feck, so there's no chance I'm going to wear it al all - zero, zip, nada.

Trying to emphasize that point that it's being bought only for profit - that is an investment in making money, not flipping a watch I happen to not like as much as I thought I would. To me it's like buying anything I'm not attached or even like, only to flip it for profit, so instead of a watch it could be just about anything - watches just happen to the be thing that I think I can make money from.

Walrus · Jul 22, 2021

Archer
Yes, at least in my view.

If I buy a modern Rolex thinking I'm going to wear it, but find that it's not for me for whatever reason and sell it quickly, that is a flipper. I think may collectors have just "not bonded" with a watch they that thought they would like, and have flipped them quickly. In the past, even with Rolex, this usually resulted in a loss.

But I personally would never do that, because modern Rolex a nothing but gaudy dreck to me, and I know I would never wear it. If I put my name on a list, and the AD sells me one, I would buy but only to sell it for a profit - again IMO they are ugly as feck, so there's no chance I'm going to wear it al all - zero, zip, nada.

Trying to emphasize that point that it's being bought only for profit - that is an investment in making money, not flipping a watch I happen to not like as much as I thought I would. To me it's like buying anything I'm not attached or even like, only to flip it for profit, so instead of a watch it could be just about anything - watches just happen to the be thing that I think I can make money from.

So how about the one who buys that modern Rolex as they have the opportunity to obtain at “MSRP” and sell right away for that reason and the purchase was made with the idea of profit. Would we make a distinction to that type of action which is often referred to here as “flipping” as an “investor”. Could just be splitting hair, like holding a stock for a day vs holding for 20 years. Mind you I don’t own a Rolex this is hypothetical in my case.
And yes I have done what you did with vintage seamasters. I accumulated like 4 or 5 as at first I liked them. After a month I thought “this is stupid they all look the same.” I think I made five bucks on selling one, gave a couple to family and the rest I just used to acquire some seikos I liked.

Archer · Jul 22, 2021

Walrus
So how about the one who buys that modern Rolex as they have the opportunity to obtain at “MSRP” and sell right away for that reason and the purchase was made with the idea of profit. Would we make a distinction to that type of action which is often referred to here as “flipping” as an “investor”. Could just be splitting hair, like holding a stock for a day vs holding for 20 years. Mind you I don’t own a Rolex this is hypothetical in my case.

For me the length of time is irrelevant - it's the intent that is the key.

As I said in my post above "flipping" because you didn't bond with the watch would typically result in a loss, not a gain - the current Rolex market is so distorted that the term flipping may now be associated with profits, but in the very recent past it was pretty much always taking a loss.

Walrus
And yes I have done what you did with vintage seamasters. I accumulated like 4 or 5 as at first I liked them. After a month I thought “this is stupid they all look the same.” I think I made five bucks on selling one, gave a couple to family and the rest I just used to acquire some seikos I liked.

Just to clarify, I've not done either of the things that I have described in my post above. I'm not a "flipper" because I tend to hold onto watches that I buy a very long time, and I do not buy watches as investments or to sell later for profit. I don't make impulsive purchases, so don't find that something I just bought I no longer want 3 days later.

I simply buy what I like, and for the the enjoyment of the watch is the thing, not what it may do on the secondary market. If it goes up, that's good, but if not I'm not worried about it. Even if the value plummets I'm good with that - I expect that hobbies will cost me money. I don't feel it's a loss anyway, because I enjoyed the watch when I owned it.

Walrus · Jul 22, 2021

Well here is where I failed at “watch investment/flipping. Now I got this seiko Ltd for around 300 usd. It was a limited run of 5,000 pieces but actually that’s just the dial color. Still I just liked the look and got one. Now I see them selling for 600 to 1,000 usd. Mind you that’s what people are asking I have no idea what people are paying. So let’s say for the sake of argument people are paying 650 usd (I doubt they are) had I been smart I would have just bought all 5,000 pieces, waited a year and sold them all for 650 usd. That would have brought in 3,250,000 usd. That would have gave me like 1,750,000 usd profit before taxes and fees etc. sure I would have had to come up with a million and a half to get them all but it’s sounds like no way anything could have gone wrong. Darn the watch that could have solved all my problems I’m so dumb

Canuck · Jul 22, 2021

Walrus
Well here is where I failed at “watch investment/flipping. Now I got this seiko Ltd for around 300 usd. It was a limited run of 5,000 pieces but actually that’s just the dial color. Still I just liked the look and got one. Now I see them selling for 600 to 1,000 usd. Mind you that’s what people are asking I have no idea what people are paying. So let’s say for the sake of argument people are paying 650 usd (I doubt they are) had I been smart I would have just bought all 5,000 pieces, waited a year and sold them all for 650 usd. That would have brought in 3,250,000 usd. That would have gave me like 1,750,000 usd profit before taxes and fees etc. sure I would have had to come up with a million and a half to get them all but it’s sounds like no way anything could have gone wrong. Darn the watch that could have solved all my problems I’m so dumb

The only problem with your reasoning is, that when the market is flooded with a particular item, the price often plummets!

JwRosenthal · Jul 22, 2021

Canuck
The only problem with your reasoning is, that when the market is flooded with a particular item, the price often plummets!

Exaclty! @Walrus would have to trickle them out one a month. So he could have them all sold in 416 years

JwRosenthal · Jul 22, 2021

Nobody saw the skin diver craze coming. Chrono’s, pro-divers and tool watches have dominated the trend for the last few years, the less expensive vintage skin divers (34-38mm) have sat at the same price for years….until last year. Watches like the Bulova 666, Zodiac Seawolf, and Omega SM120, or any mid-tier and even chrome plated numbers have doubled, or even tripled in price. Although seemingly small change to many, a 300% increase on a $300 watch is theoretically a far better return than a 10% increase on a $10k watch.
Bully for the speculators, suck for those of us who actually collect these watches to wear.

Walrus · Jul 22, 2021

JwRosenthal
Exaclty! @Walrus would have to trickle them out one a month. So he could have them all sold in 416 years

Wtf @Canuck and @JwRosenthal gotta come at me with logic and ruin this on me. It sounded perfect in my head, damn man reality, what a concept. That’s why I avoid it as much as possible. I think your both just jealous you didn’t think of it first although tbh I didn’t think off it till i wrote it anyway.

Dan S · Jul 22, 2021

JwRosenthal
Nobody saw the skin diver craze coming. Chrono’s, pro-divers and tool watches have dominated the trend for the last few years, the less expensive vintage skin divers (34-38mm) have sat at the same price for years….until last year. Watches like the Bulova 666, Zodiac Seawolf, and Omega SM120, or any mid-tier and even chrome plated numbers have doubled, or even tripled in price. Although seemingly small change to many, a 300% increase on a $300 watch is theoretically a far better return than a 10% increase on a $10k watch.
Bully for the speculators, suck for those of us who actually collect these watches to wear.

The problem for "investors" is that these returns are impossible to scale up to absolute amounts that they would care about. Good luck finding 100 nice Seawolfs. 😁

JwRosenthal · Jul 22, 2021

Dan S
The problem for "investors" is that these returns are impossible to scale up to absolute amounts that they would care about. Good luck finding 100 nice Seawolfs. 😁

No shit! Took you how long to find one?!!

It is the saving grace for the true collectors of vintage- we have far more persistence than the day traders…or is it neurosis…hmmm

Walrus · Jul 22, 2021

JwRosenthal
No shit! Took you how long to find one?!!

It is the saving grace for the true collectors of vintage- we have far more persistence than the day traders…or is it neurosis…hmmm

Actually that is a valid point. I think it took me 7 months to a year to finally find that pouge and that dome dial Connie was a solid year. The captain cook probably longer but it also helps when your not buying to sell and you realize it’s just a watch and life will continue just fine if you don’t get it. I moved to quickly at the start and didn’t do too bad with noob taxes all things considered, gotta keep this fun, it really is one of my favorite distractions but I perfectly understand those who look at watches and see only dollar signs, people need to support themselves

MTROIS · Jul 22, 2021

Walrus
Wtf @Canuck and @JwRosenthal gotta come at me with logic and ruin this on me. It sounded perfect in my head, damn man reality, what a concept. That’s why I avoid it as much as possible. I think your both just jealous you didn’t think of it first although tbh I didn’t think off it till i wrote it anyway.

Not so fast!! You AND them were up to something:
- buy all 5,000 pieces = create (artificial) scarcity
- communicate on said scarcity on social media, online blogs and other publications = pump
- release them to market AS A TRICKLE = dump
- but OBVIOUSLY NOT at $650... because remember scarcity = me want too = I will be paying VERY high prices...

... so that you don't have to wait 416 years.

Of course there are a few caveats:
- 5,000 May be too large a number so find something more scarce or rare
- you need to be creating a very enticing story that people will be buying (or find some good celebrity to play along, just like a good SPAC)
- and of course, you can make much more $$$, if you have the cash flow to buy more expensive pieces (say Richard Mille) and hold them as long as is needed (see the gentlemen flippers on YT)
-... and voila.

Walrus · Jul 23, 2021

MTROIS
Not so fast!! You AND them were up to something:
- buy all 5,000 pieces = create (artificial) scarcity
- communicate on said scarcity on social media, online blogs and other publications = pump
- release them to market AS A TRICKLE = dump
- but OBVIOUSLY NOT at $650... because remember scarcity = me want too = I will be paying VERY high prices...

... so that you don't have to wait 416 years.

Of course there are a few caveats:
- 5,000 May be too large a number so find something more scarce or rare
- you need to be creating a very enticing story that people will be buying (or find some good celebrity to play along, just like a good SPAC)
- and of course, you can make much more $$$, if you have the cash flow to buy more expensive pieces (say Richard Mille) and hold them as long as is needed (see the gentlemen flippers on YT)
-... and voila.

Ya I gotta be honest even coming up with the 1.5 million to buy the 5,000 seikos would have been an issue

YY77 · Jul 23, 2021

Walrus
Ya I gotta be honest even coming up with the 1.5 million to buy the 5,000 seikos would have been an issue

Even if you would have 1.5 mln, no way they would have allowed you to buy all 5000 Seiko's (too much logic?). ::stirthepot::

Walrus · Jul 23, 2021

YY77
Even if you would have 1.5 mln, no way they would have allowed you to buy all 5000 Seiko's (too much logic?).

Ya you guys are really starting to piss me off I giving up on watches I going to Pokémon cards this place is no fun

STANDY · Jul 23, 2021

Why buy watches for investment.

There is so much money in knives. 100% in Spyderco LE sprints at the moment.
Custom knives off a 8 month waiting list knife maker you have doubled your money before you even have the knife.
Buy a knife distributor special colour that’s limited to 600 pieces and if your lucky to get one in the 11 minutes before they sell out there is hundreds waiting to pay triple on EBay.
Instagram has made anything EDC (every day carry) hot. Lanyard beads, prybars, pens and knives.

These lanyard beads are $70 a pop and are always sold out.

$200 a pop on EBay a day later are always sold out just as quick.

What Makes Luxury Watches Lose Value?

dsio

S.H.

ghce

pdxleaf

Archer

Walrus

Archer

Walrus

Canuck

JwRosenthal

JwRosenthal

Walrus

Dan S

JwRosenthal

Walrus

MTROIS

Walrus

YY77

Walrus

STANDY

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