Luxury market is not going to collapse because people that buy very high end items had very little impact on this downturn. 9 to 5 people will be impacted the most. Try buying a Bugatti sold out until 2025. SF90 or other exclusive Ferraris they don’t even take your name.
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Originally Posted by sigma089
Bingo, great post.
For some reason the market bubble hasn't burst yet.
I for one believe that this has to do with the fact that most newbies haven't been confronted with the harsh reality that the money they have "invested" in watches is gone. I think this has mostly to do with the fact, that most haven't tried realizing their "gains" yet. Many of us who have been into watches for a long time are used to losing money on watches. New "collectors" aren't. We have been walking out of ADs down on most transactions for ages. I know I have and I knew I would. I never spend 3x retail on a Daytona or an Aquanaut though.
Another reason why the bubble seems to be intact still is that greys apparently aren't hurting enough. Reason for that might be that they still have money to burn from the times when they were making absurd amounts on in production models, or with them just refusing to acknowledge the reality that no one in their right mind (them included) is buying. I think a lot of them are overleveraged and will need to start selling at some point.
Once greys start liquidating, all things watches will drop rapidly. Buyer base will return to pre-hype conditions, with A LOT less demand. Everyone who got burned on their Rolex, PP and AP investment pieces won't go anywhere near watches in the foreseeable future.
Prices were driven up by IG and greed. From what I experienced first hand many newbies who became interested in watches over the last few years bought them as status symbol, because money supply was plenty AND they were priced out of many other assets such as real estate, despite them making good money. Now the money is gone.
What I also think that currently might be overlooked by proponents of stabilizing prices is the following: the general outlook on luxury items might change due to the recession. Luxury items might very well be frowned upon by large swaths of society due to many people struggling to make ends meet, especially if IG moves on.
Regardless, I sincerely hope and believe that willing enthusiasts will be able to buy basically everything at MSRP in 2023. Friends and family will again think we're crazy for our interest in watches. I can't wait.
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