There's HUGE generational changes that are going to hurt some buyers really bad. You used to buy a Rolex as an "I made it" gift after having taken care of many life affairs. Now, flex culture resulted in 20-somethings rushing to drop $40k on a watch instead of purchasing real estate. This could end disastrously for them.
It certainly appears there's several things going on: A) people hoarding watches B) Dealers/flippers/Investors basically buying watches from each other, assuming the prices will continue to go up. C) to a lesser extent people just buying watches to sell later, not because they particularly enjoy watches. Etc. The market is just waiting for a tipping point! I've been wondering if the situation in Ukraine/Russia might just be that tipping point!? Luxury watch brands have pulled out of Russia, that could have an unknown effect on supply!? Once prices start to go down it wouldn't take much for them to go into free fall. Those people who paid too much in the first place will panic sell to cut their losses.
The supply issues haves eased up a lot and Rolex has increased production. They are currently moving all of their Tudor production to a separate factory, freeing up capacity for Rolex. This is even evident at ADs in the past month or so. Most ADs have these watches in the back and they wait for the “right” clients to purchase them. Anecdotal story. I know someone who works directly with a very famous individual and he went into a major boutique, and he was told that they don’t have anything. The next day the celebrity who he works for went in and walked away with 3 watches including a Panda. They have watches, they just don’t want to sell to you.
On the subject of dealers just trading these pieces between themselves and not actually selling to the end user - I was literally saying this to my friend yesterday after going to the London watch show. 90% of exhibitors basically had the same offering in their display cases. The ones who held a vintage offering were 10 times more interesting in my opinion
Your dealer to dealer analysis is super interesting. And this makes perfect sense. You see dozens of Rolexes in independent jewelry store watch cases but they're priced so ludicrously that no one will buy them. They don't want to sell them. Maybe this price insanity is mostly created by dealers buying from each other? Interesting point.
Great on the scarcity as always! Completely agree and the notion that you will not be able to get a Rolex under retail is bs - who wants to buy a GMT BLRO from 2018 in 2028? Seriously, who ever is thinking this market is sustainable is nuts - there is nothing that makes a new Rolex attractive in the future from a vintage perspective, so unless they literally discontinue the model - I see no way that a Rolex from this decade will stay at +2x retail, no way
I agree. Making them impervious to aging is going to kill the future "vintage" market. Unless, like you said, they never make another GMT. Or they screw up the design somehow. Which won't happen.
@@BiffTannenBTTF Agree! Ceramic and Superluminova will never patinate - quality is too high overall and the design changes will be minimal. What will be better is the movement and materials which will make the current version of less material quality and no vintage appeal - i.e. lower than retail (2018 model should be cheaper than 2028 model, because why wouldn’t it)!
When food and fuel prices start to really take off a good many of these posers will dumping their watches at the nearest pawn shop or grey market dealer. "If" the grey market don't go bust first. Back in 2008 I bought my first Rolex and it was a NIB Air-King for $2600 and no tax. Now you can't even touch a used Rolex for that price. It's insane.
Hoarding at dealer and speculator level is a reality. Experienced collectors will not buy at these prices even if they can afford it. Prices will come down for sure but will remain at a hefty premium from retail for a long time to come.
In addition to watches I’m also into guitar playing and vintage guitars, and I follow RU-vidrs like this in that world as well. The vintage guitars are also very expensive, but there’s a big difference: The focus is almost never on prices and value when vintage guitars are discussed. In the watch world, focus is almost only on value. What does that say about the people and the culture in these hobbies? Are the guitar afficionados more low key and discrete while the watch guys are a bunch of flexers? Or is it because there are more interesting topics to discuss around guitars than watches?
It’s going to be interesting IF the economy tanks, what will happen to the watch market…people who have financed themselves up to the eyeballs with cheap money to buy watches could be in for a very bad time. Think I will stick to trying to buy at retail, save money and be there to pick up the pieces if it ever happens
I remember writing my thesis about watches as an investment and being stunned how the 5711 bloated up to 50k. Little did I know, it's selling selling for a quarter million now..
Back in 2001 I was offered to buy a pre-owned 3700 in good condition (granted after some tough negotiations) for 12.000€ in a WEMPE store i Hamburg but I was a first year student to become a watchmaker and my girlfriend was pregnant so it didn´t quite make sense at the time. I ended up with the 16610 instead for 2500€ which was an okay price back then and made me a lot of money later but oh that 3700...The one that got away..
Dealer to dealer transactions is a big part in many places apparently. Uptick Reviews mentioned a few possible evidence in Hong Kong. In Rolex Japan, it seems quite well managed ... especially now since there are less inbound tourist sales. We don't have waitlists and ADs vet the customers on flippers or not. I was able to get an explorer with no previous purchase history at the local boutique after having a good chat with the sales rep. I was also told to sign a doc wth submission of ID that explains they will not sell me another sports watch for a year (major models, not all)
As for an exploration/expedition watch. You mentionner the Breitling being a perfect watch for that and most of times you'd be right. But as a Canadian citizen that love hiking, especially in the winter, you mentioned Alaska, well, hmm, batteries die in the cold. My cellphone dies when it's -15 Celsius and below if it's not directly on my chest. There a french explorer our age that crossed Canada by foot in winter a few years ago and even his GShock turned off or the screen froze at some times when the temperatures were below -30 Celsius. All while a mechanical watch, built for expeditions, will handle it all. The watch I wear the most during hikes are the Yema Pearldiver and sometimes my Speedmaster and they both handled very well temperatures of -27 Celsius on the thermometer for 12 hours this winter when I walked to islands in the middle of the river. They handled a whole day hiking mountains above the treeline in either a blizzard or a -20 temperature at the warmest. I can't say that I would bring a quartz watch in these circumstances. Maybe if the quartz watch is directly on my wrist that would be fine, but it wouldn't take it if it's strapped outside of the coat. Or if I have to remove it or move it.
@Stefan Schweizer I have never noticed accuracy lost over cold or hot weather. I sometimes wear it over my coat, but in all honesty that's maybe 10% of the times or less. On the other hand I often remove it from my wrist and put it like on the ice or a rock or a bottle of rum and take it in picture for some Facebook groups. So you're probably right in the sense that my watches are mostly on my skin. However I have noticed some condensation on the crystal sometimes due to the cold and though it's water resistant and I wasn't in water because the cold condensates the humidity in the air of the watch. Sometimes in windy conditions my watch felt ice cold, so maybe it wasn't at -20 or below, but it clearly was below freezing even though it was on my skin. When it's below -20 the cold really gets you deep and you have to be very well dressed to spend the day outside.
@Stefan Schweizer I don't recall visiting Kamloops, but I spent two summers picking cherries in the Okanagan back in 2014 and 2015. Had a Casio dress watch while at it. Beautiful landscapes in BC and very nice weather in the summer.
The things is that there are plenty of watches out there immditiately availible. I was in Vienna the other day and the dealers had plenty of watches for sale, just not the ones the sheep or hype merchants want! One store had two Chopard Alpine Eagle chronos for sale at list for 10k less than the street price of a Daytona. What this market shows me is that having lots of money does not mean individualism, in fact, looking at the market it seems a great many well off people are just sheep following trends.
I´ve been into watches for nearly 30 years (I´m WOSTEP Certified since 2004) and used to be a great little subcultural community to be a part of. I´ve made friends all over and 15-20 years ago a polite mail to AP, VC or JLC was all it took to get an invitation and while you where there you met other enthusiasts who ALSO actually KNEW about watches. Nowadays it´s just f-n heartbreaking mess of posers pretending they´ve also been "doing it forever" but are absolutely clueless if you ask them for an opinion on the simplest of things when it comes to the actual craftsmanship and techniques that goes in to making a watch.
My father in law owns and wears that breitling for years, 24/7. For some reason it’s so cool, just suits his personality so well. Definitely a signature watch. Nice to see it getting some love.
@@daniellewis9240 not by name, just the convo about rich guys bankrolling grey market watch dealers and saying yeah they can get a ferrari but keep it in my name. If you watched Timepiece gentleman when they had discussions with his investor it always felt like that
You guys are viewing AD discounts from solely an American business perspective. In many parts of the world, haggling is the norm and accepting the initial price is an insult to the seller and not offering discount is an insult to the customer. Since watches are a global commodity, you see a blending of cultural norms and expectations.
As for the Aerospace I think the coolest is the 40mm one, especially the one from the last year when they fitted superquartz movement in it. And it has acceptable size and the design seems nice to me than the later Evo.
This is much more a product of The Daytona effect - wanting what you can’t have. Rolex realizing that starving the market is more advantageous than suppling it is all this is.
Hey look, my wrist! Breitling Aerospace owner here, appreciate the credit. One small correction, that’s actually the Avantage model that came directly before the Evo. Very similar except 1mm smaller and more unique dial texture. Interesting idea with the solar discussion. I wouldn’t be opposed to it, but I’m not sure if there are currently any High Accuracy Quartz movements available with solar. If I had to choose between a COSC certified HAQ with a battery and a more traditional quartz with solar I would definitely go with the former.
If it gets any worse people are just going to throw the towel in, if there is no watches to buy to even get on a list for a watch. Dealers are going to push nonsense like jewelry and it is going to put a bad taste in people's mouth.
Hi Theo and Harris, great you cover Jaquet Droz, especially their contributions since the early 1700s. They are, however, from a french origin so if I can offer a tip, you pronounce the name Jaquet (the t is silent) and you got that correct, but Droz should be pronounced more like 'Droze' with the z audible. Hope that helps even if you're unfamiliar with french, you can still nail the proper pronunciation.
I had a conversation on the CRM YT channel about how the gray market is propped up on and the influence of the market is entirely based on gray dealers.
The Bretling with the distress beacon is called 'Emergency' and has a stated battery life of approximately 2-3 years. I guess you're supposed to get a new battery before every trip, just in case. Pretty ridiculous. Solar power would definitely make sense.
Sheesh this comments section has some downers. Love the show. You guys are by far the best watch content out there and one of my favorite things to watch on RU-vid. Sorry about all these divas.
126710BLRO is a hype example but if I can get it at retail you better believe I am taking it and keeping it. It should always have appreciation maybe just not the 30k Chrono24 is listing at.
Two items: Michael, said you won’t know if Rolex makes less. Yes those numbers are published and the sales numbers are published so you will see a drop because all watches are at msrp. There will be no collapse the upper guys have tons of money and are holding watches forever hiding money because the government is taxing everything. Watches can hide some of that. So dealers are trading up with other dealers so end collectors and the top dealers are selling to billionaires. So the billionaires are supporting the market. How many people who were in Chinese realestate and said hey let’s dump a small part as a hedge in watches.
Love you guys. It doesn't make sense that middle men are driving up prices. It IS the consumer market, 100%. Consumers didn't cause shortages, but their behavior en masse sets the prices. The idea that some mysterious band of oligarchs is fueling price inflation through indiscriminate funding of watch investments is not realistic, or broad enough a variable to explain the magnitude of the change.
You are correct on 50% of your statements. Rolex, AP and Patek will not correct in the next 5 years at least to a level that would reduce the current prices of the watches dramatically. Prices are getting softer already, but not by much. So if you pay triple the price of a GMT Pepsi today, you will not loose more money then before this spike in a 5 year period. I am from Canada and know a few of the grey market dealers personally. And in Canada 90% of the sales of those brands go to end users and not other dealers. Yes Rolex may get to their 1 million capacity at some point but there are 10 million waiting to buy a watch. Do the math.
Commodity trade of Rolex - demand and supply- where dealers are brokers. Consumers don’t dictate any commodity prices. It’s interesting on how there’s a market of Rolex alone
A bit late to this party but decided to comment. There are no supply issues with Rolex. The latest Morgan Stanley report estimates that Rolex sold 1.05m watches in 2021, 50k more than 2019, pre-pandemic. They had a ~20% dip in 2020 with the shutdown but things have been back to normal for a while. Interesting commentary on the current prices. You are inferring that it's the dealer-to-dealer trades driving prices up, but surely there has to be an end user paying the price. You'd have to be a poor dealer to start paying more than the market value for a watch to resell. Do you really think that of your fellow dealers?
I think that this new grey market layer of economics isn't new but I believe it's being promoted into new products (eventually bananas) to continue the acceleration of money velocity as an alternative inflation that isn't obvious to most people. This started in the government property biz in the early 1900's and has been trickling through commercial property, small biz and now luxury goods of all kinds.
Hi Michael and Christian, I think the challenge for Rolex, AP and Patek is the enourmous success to stay focused with the management team and the whole work force. Think about your own business is drowning in money pouring down on you. What is the challenge for you? You might do crazy things, starting to expand, starting overspending, everything seems possible - a dangerous environment - and your getting lazy in your own complacency. It is much easier to chase a goal in a competitive arena than being on Mount Everest getting champaign served every day. What is your next goal - to be sold out the next 10 years? The competition will take a chance and will get base business from Rolex, AP and Patek. They simply lose business with new clients in entry level. Greetings from Germany - Great stuff - I like your videos
If Rolex increases their prices by 10% each year, as they did this year, the prices will be double what they are today in 7 years. The price of a sub between 1995 and 2012 almost quadrupled from $2000 to $8550. I don’t disagree with the points raised here but the fact is that all assets or things of value have gone up substantially the last few years. Too much money not having a home. People have decided that they are happier with $10k on their wrist than $10k in the bank. At least they get to enjoy it each day and they can sell it if they need the cash. Watches are an asset class with growing acceptance and that is the one point missed in their conversation.
Iam not a watch insider but have been an enthusiast for more than 20 years. I think Rolex will not fix this problem because it dovetails with their long term goals. The scarcity of Rolex has extended to their once discounted precious metals and datejusts so its clearly a market driven result affected by the pandemic supply constraints etc. Why would Rolex expand production and damage their brand long term by flooding the market. The fact that the DJ can sell for premiums will allow them to consistently increase prices across the range and sell more precious metal pieces which was always their goal pre pandemic. When their precious metal pieces reach PP prices retail they really will have reached their goal and the holy trinity of watches will mean the next 3 after Rolex. I think that may happen and thats why the Cellini has a long term place in their future when it makes sense for them to make more complicated watches.
Why don’t you invite every now and then a viewer in the chat? Your videos are the only ones I would really like to come in with a drink and chat my point of view. Need a European special guest?
The supply chain/Rolex issue is a bit of a myth, or at the very least unsubstantiated. Rolex manufacture almost everything in-house, so effectively protecting themselves from global shortages of OEM and ODM componentry. Rolex are the only watchmaker with their own foundry for instance. There are no shortages of watches from almost every other brand other than Rolex and certain sport's watches from AP and Patek 🤔 Have Rolex actually come out and communicated to their partners that they are having supply chain issues? They haven't. The grey market and to a certain extent Rolex, are taking advantage of and leveraging this situation (global supply chain) and using it to create further artificial hype, demand or whatever you want to call it.
Did you guys just say that Rolex is producing less, ADs get very few if not 0 watches??? Really??? How do ADs survive? The smallest Rolex dealer has 4 employees, di you think they don’t get watches? They are loaded with Rolexes, but they sell to certain “customers”. In 2021 Rolex has made CHF 8billion. What’s the average retail price for a Rolex, 10k? Let say 12k? ADs pay 60% of that for the 40% remaining to cover their costs and produce a profit. It’s 8billion/7.2k chf = 1.1million watches per year. How many Rolex ADs are in the world? 1400? Let’s say 1500? 1.1million/1500=733 watches per year. Yes, the average Rolex AD gets and sells 60+ Rolex per month. Worst case, as I believe the avg retail price is less than 12k and ADs are closer to 1400.
I doubt the insight on supply chain issues. No one really wants to see this as it affects industry hard and even though some might seem to profit from it - majority don't
I PRAY that one of the big brands has to close down due to the artificial scarcity they made, even before these supply issues due to covid happened. A big economic recession is coming imo, and hopefully it'll bring down the waitlists and make brands have to change their ways
The only annoying thing with you is that over the funny joking millieu I know for sure if I go to sell in my hulk 100% convinced that the offer would be just a little over retail and the selling price 28k. This is the watch business milking the enthusiasts to marrow with a wild smile
Amen. Many of these watch enthusiasts should look at the signs of the times versus over-paying for a Rolex. The verse comes to mind about "people buying and selling" during the end times.
These videos are getting unwatchable with only a few minutes of information and tons of Christian swearing and talking about nothing. His image is more construction worker than businessman.
Not to be disrespectful or rude but the advertisement time on the video is way way too long of a time I do enjoy your videos but it’s a big turn off too long of videos of advertisement
I hope The one on the right breath doesn't smell or spit when he talks, because his mouth is always talking and drinking or eating. Maybe that's why Michael's hair is somewhat frizzy and he turns his face frequently to the camera when the one on the right talks! Eewwwww!
How exactly does the clickbait title 'The Next 5 Years Will Be Brutal for Rolex, AP, and Patek' relate to anything in this rather pointless episode? Just an excuse for gouging the advertisers I guess. Pretty weak boys.
@@ErikL727 Oh, I see your point - Rolex, AP and Patek are reporting record sales and have waiting lists years long, so the next 5 years is going to be 'Brutal' for them? I think not. If one looks very hard one can maybe find a point in there that dealers holding large stocks of those brand's most hyped models could be negatively affected by a downturn in the market (of which there is no sign and most of the smart industry observers say is unlikely to happen). That's really clutching at straws. I usually enjoy the boys' banter and that's why I'm a subscriber, but I stand by my assertion this episode was a vacuous excuse for a wine commercial, with a clickbait title.
@@davidjb3671 I think what you're missing is that the recent boom in desirability is directly tied to the notion of "investment value" and when that goes away, so does the global attraction to these brands. When they simply become stores of value rather than investments, the crest is over, and they become just another luxury watch. Tha talk changes from "You should buy it, it'll be worth twice as much in a year" to "its a good watch, and you shouldn't lose your @$$ on it." From the brand perspective, it's essentially a riches to rags story.
@@ErikL727 I understand that and I despise the idea of watches as an investment, since I bought all mine from love. But the eloquence of your argument is exactly what's missing from this video, or at least so poorly communicated as to be nugatory.
@@davidjb3671 fair play, Sir. I agree it was probably not illustrated in terms most concise manner. The watch world has truly been ruined by the wrong people buying up everything for the wrong reasons. I guess we'll see if world events have any impact as we move through 2022.
