Bubble talk........where is the market headed

[Gina Marie]

I think i can safely say that we have all done fairly well collecting these watches. I look at stuff i bought 2 years ago and wonder why i did not buy everything i saw. Look at what Heuers have done over the last year....i was looking at a 2446 gmt at 6200 with booklet unpolished a year or so ago....that watch now is 9-10k all day long. I remember looking at the Tudor snowflakes and shaking my head at 3500 a year or so ago....well that is now 6-8k....crazy. These prices cannot continue to appreciate at this rate or pretty soon a big block will be over 10k and most collectors will be priced out of the market. I am not saying that they are in bubble territory but some of these prices make no sense to me....look at the 5513 or even the 5512.....1680 reds, 1655s, etc. Where is this going? My buddy was telling me that his Movado super sea sub is worth 7500.....huh...that was 2k 2-3 year ago...with a plastic bezel.....gorgeous watch but come on. Help me understand what we are going through......looks to me like the P/E ratios are getting stretched a little here....

[greekbum]

Gina its a suckers bubble on some of these watches imho. Ive been collecting since the late 80's its a long time. IMHO prices on studs are way out of reach for many now and they are bidding up the duds. Believe it or not its the biggest topic recently among long term collectors and dealers. They don't know what to do either. On one hand they are not finding any fresh watches for over a year. On the other hand they have sold or are thinking of selling everything they have left as prices are strong. Then you add into this all the questionable watches showing up. The risks are high imho. One of the problem i see with the duds is that theres no parts or people that want to or can fix them. Even for somebody like me it can be a task to find something like a crystal for a Movado sub sea. I searched for years even going to zenith in Switzerland who had one but would not sell it unless full service. I finally found one. What does the collector who's not as resourceful do when one of these duds breaks or needs something is what I am wondering? Trust me it is not as easy as it sounds and will be very costly. Who knows what the future holds though. Today there is instagram and a new wave of vintage dealers. They have absolutely zero knowledge whatsoever about vintage Rolex. Usually a slick blog or website , little to no capital and shop others watches. Is it a bubble then?

[springer]

Gina, it's only been a week or two since the last "bubble" thread!!! Has something changed for you or us in the past couple weeks?

Personally, I worry more about the markets than whether a watch is overpriced or is about to explode from depreciation.

Let's enjoy these masterful pieces of engineering and art and fret less about values.

[R.W.T.]

I'm gonna step in the poo here....

The problem is machismo....that is the problem. Everyone has to have a sport watch....no normal watch will do...it has to have a big steel case and a rotating bezel or it's not like every other lemming collector. It's like politics...everyone is kind of marketed to, as to what they should think is cool, and they think it is cool, because they think they SHOULD think it is cool.

No offense I like sports Rolex too...but it is a bit of a follow the leader game at this point. Every new collector it seems is riveted on some sub, sea dweller, or gmt.

There are very rare and unique watches that are very under appreciated right now because of uncommon styling or size...we all now have to have a watch the size of a small alarm clock or we are not...manly men...when my father survived the Dieppe Raid in a Spitfire, where they lost 60% of the allied pilots by noon....wearing a Bulova Senator that was half the size of a matchbox....I assure you he was no wimp...balls of steel is more like it. Not many men today could bear the thought of such combat if they really knew what it was about...I know I couldn't.

People will always be in some form or fashion intrigued with mechanical watches...truly...even the contemporary watch market is in a slide. Rolex is not doing well.

Millennials don't get watches...they have...Smart phones and Smart watches. They don't get a lot of the things that we all had passion for...they prefer a scooter to a road bike or a classic cruiser. They think a Leaf is hipper than a vintage sports or muscle car.

They do however for some reason reject technology when it comes to music in many instances...seeking ancient vinyl...and paying WAAY more than it ought to cost...to get records. I saw a decent copy of Joplin In Concert at a local records store for 19.99...used...2 days ago.

I think what you will see is a seeking of quality original pieces of less sport fair...the larger of the 40's and 50's vintage watches by Rolex and other top swiss makers...Omega is strong...but things that are affordable comparatively...like a friend said...it's easy to get a Paul Newman or Big Crown or any high powered Rolex sport you want in the 100k - 1,000,000.00 range, all you need is a CC and a way to pay. Many dealers have them waiting for you to buy.

To find something rare and unique...a little more of a challenge though at this point it may not cost you so much...

The truth is you will see 50 Paul Newman's to every ONE of these you see.



And probably 10,000 to every one of these you see...



And I couldn't pay the interest on a month's CC bill on a Paul Newman for what I paid for both.

[eliu908]

As an equity trader, all I can say is that money is being poured into alternative assets such as paintings, watches, wine, and gold due to monetary policy. This can also be clearly seen through real estate.

Trump is right when he says the FEDs are manipulating everything. Equate the price of watches to the recent equity highs due to central banking reluctant to raise rates. They keep saying there is no inflation WTF, look at the price of watches as you just said.

Also credit and leverage is cheap and easy to get. The guys response above me was perfect as in saying that he forwent a interest payment bc of a watch.

[fusionstorm]

Originally Posted by eliu908

They keep saying there is no inflation WTF, look at the price of watches as you just said.

When did vintage collectibles get included in the Consumer Price Index, or any core inflation calculation???

[watchlovr]

Originally Posted by fusionstorm

When did vintage collectibles get included in the Consumer Price Index, or any core inflation calculation???

They don't but what inflation rate would it show if they were?

[roh123]

I think the market is changing and that some prices are vary inflated. I think what we will see is a slight shift where average to poor quality will stop or move down and high quality or very rare pieces will continue to move up. Probably not in the same rate as the last couple of years but I do not think prices are going to move down any time soon. The main concern I have is not that great watches cost a ton of money, the concern is that if great watches cost a lot; half good watches need to cost almost as much. I think this will change.

Personally I don´t have a big collection or very high price pieces. I have good watches but not extreme in any way. I still get a lot of questions from dealers, known and new, who wants to buy from me. This have changed a lot the last year and I believe a big reason for this is that the supply for good pieces is very limited today. I don´t see this changing any time soon as most people with decent collections collect and they are also very much informed of what their pieces are worth.

I might be naive but that´s my take. I still have the feeling that every time I sell a watch my gut tells me that I will never be able to afford such a nice example again.

Overall the development of vintage Rolex sucks. The hobby was so much more fun when you actually could afford it.. Today every purchase is so big and important and that kind of kills the fun. Also the fact that prices are as they are means that the best pieces aren´t worn as much as they deserve. I really hate myself every time I go to the bank to put fun watches away from reality.

[offrdmania]

You can have your crazy overpriced sport watches. Im happy purchasing my 35mm watches at under a grand. Seems to be a market that hasnt been affected as much. Ill take a 35mm/19mm $400 Tudor and a $900 Rolex any day of the week and twice on Sunday. I love them

[xeal]

I don't believe that the market will cool down again. It may go steady for a while (unlikely) and keep increasing gradually.
Let us face it, it has never been as bad as today. There have never been as little watches circulating in the market as today, and quality watches have never been as pricy or even close to what they cost today.
Dealers are struggling to find good watches, and basic references are not easy to find anymore

In addition, we haven't seen as many younger guys being extremely active and passionate in vintage watch collecting as today.

Many of us, including myself, will be forced out of the hobby.
I am okay with that because I have no choice. :)

[harry in montreal]

I think the price of vintage is in line with the price of New. So a new Gmt steel at about $8k can be bought at the mall anytime. So I suppose that a nice 1675 at 10k is not entirely insane. The price of new sport is what jacked up the prices of the 70s vintage. Only my dumb opinion.

[R.W.T.]

Originally Posted by eliu908

As an equity trader, all I can say is that money is being poured into alternative assets such as paintings, watches, wine, and gold due to monetary policy. This can also be clearly seen through real estate.

Trump is right when he says the FEDs are manipulating everything. Equate the price of watches to the recent equity highs due to central banking reluctant to raise rates. They keep saying there is no inflation WTF, look at the price of watches as you just said.

Also credit and leverage is cheap and easy to get. The guys response above me was perfect as in saying that he forwent a interest payment bc of a watch.

Not to get too political but in the USA...everyone is touting the economic recovery...and how it's all peachy...it's smoke and mirrors...

If you are personally facing 10,000,00.00 in credit card debt...(random figure) and instead of working seriously hard to pay things off....and your lifestyle is really suffering...you can't really pay your other bills and your house is needing a lot of repair...and your creditors come by and pull you aside and put their arm around your shoulder and say...hey man...it's alright...let's not worry about all that right now...you're suffering...tell you what...we're not gonna even LOOK at that 10 mil...here's a blank check for 10 mil more...go out and buy yourself some stuff and enjoy life...

What kind of an apparent lifestyle change could you make if they handed you 10 mil...instead of tightening your belt and getting some assistance in paying down your debt?

Answer: You could make it look like you were doing VERY VERY well...but really...you would be doing TWICE AS BAD.

That is our situation....the economy didn't get better...cash flow did...really your currency was devalued by 1/3 - 1/2....and things are really MUCH worse in the long run than they were. And now...there's no way to make any money because wealth is based on credit instead of savings...the banks are awash in fake cash made up out of thin air by the federal reserve (if you and I do that it's called counterfeiting) so no one will pay you interest to hold your money and lend it out...why would they do that...they can get it from the fed for free?

The cost on everything in this country is up 1/3-1/2.

I complain to a banker about the national debt and he says compared to GDP the extra 10 trillion dollars on the debt (doubling the debt of all time) since this administration took office, and he says it's nothing because the GDP is so high. I say...sure but what about when the GDP goes down again...the debt doesn't.

They are economic morons. Sorry.

[eliu908]

Originally Posted by fusionstorm

When did vintage collectibles get included in the Consumer Price Index, or any core inflation calculation???

There is no inflation according to the FEDs. I am talking in regards to alternative assets. Yellen is a trapped rat that has no other place to go. The FED is smart, but they are literally between a rock and hard place. Equities need to be manipulated so they do not crash. If equities crash and the wealthy panick, it will obviously affect the whole economy. Oil is trading at 50 bucks right now as if that is the all time high when correlating with equities.

Don't even get me started on quantatitve easing. How do Draghi or Kuroda sleep at night IDK.

Vintage watches = alterantive assets = price up. Just equate it to the explosion of interest in vintage wines.

[jdmi32]

I've seen crazier price increases with other collectibles. I'm of the opinion that the top pieces in terms of condition and eye appeal will continue to go up. If people think that paying a few thousand dollar premium for say a high end Red Sub vs an average Red Sub is bad now, wait a few years and let's see how much the discrepancy is then.

[adam78]

Tommy, you showed some nice watches, but not a bubble

[R.W.T.]

That's coz I keep selling you all the good ones...

But I keep this one.

[RGAmos]

These vintage sports models seem to have become fashion statements for people who may never own another Rolex watch and have no interest in collecting. It seems there are more people chasing after a limited supply which will not increase.

[locutus49]

Can we keep politics out of this forum? Please.

[rootbeer7]

in the uk, you'll earn 0.000003% interest on your money, the pound is cheap and people are looking for other items to put their money into!

[motoikkyu]

I don't understand politics so I don't generally discuss those topics. I do understand inflation from the perspective of having lived for a while. In high-school, I could buy a car that was good for maybe another 5-10,000 miles for around $100. By the time I hit graduate school, some eight years later, that same type of car (good for 5-10K) was $2500. Ten years later, about $6000. Today, I can show you any number of used cars for sale that have less than 20K left in them for over $11,000. Money loses purchasing power, that is inflation. That is not the government definition, that's the "real-world" definition. Watches, especially recognized brands, remain popular. Inflation is a matter of perspective. In 1992, a 1601 DJ (used) sold for $1400. Today, you can still find some decent examples for $1800. That's not too bad a jump, considering what a can of Coca-Cola did in the same time period.

[Gaijin]

This conversation concerning the prices of watches reminds me of similar conversations that were being had just before the GFC..

[ILuvSubs]

Originally Posted by eliu908

As an equity trader, all I can say is that money is being poured into alternative assets such as paintings, watches, wine, and gold due to monetary policy. This can also be clearly seen through real estate.

Trump is right when he says the FEDs are manipulating everything. Equate the price of watches to the recent equity highs due to central banking reluctant to raise rates. They keep saying there is no inflation WTF, look at the price of watches as you just said.

Also credit and leverage is cheap and easy to get. The guys response above me was perfect as in saying that he forwent a interest payment bc of a watch.

Very interesting... The same seems to be happening for Air-Cooled Porsche 911s. 964s, 3.2s, SCs are now going for silly money. Prices have been sky rocketing in recent years.

Watch out when interest rates rise... Will we see asset prices fall?

[Gina Marie]

All things equal higher rates will not affect asset values like most folks think......why would rates rise? Growth prospects are improving......if prospects improve then folks are doing well....if folks are doing well then prices rise....I have made more money in a rising rate environment than a falling one....the fed can raise the fed funds rate all they want.....the 10 treasury moves with the market....not the fed. The 10 yr treasury is what is used to price our mortgages, etc. not the fed funds rate. If you look at the 10 yr rate at the beginning of each QE that the fed did to lower rates vs the end of the QE....each time the 10 yr treasury rate rose from the start of the QE to the end.....quite the opposite of what was expected.....however the market saw economic improvemet and rates rose.....falling rates are more toxic to our hobby than rising rates.

[Gina Marie]

If rates fall.....prospects are dim....dim prospects do not help collectable values....

[oldLeatherNeck]

I'd the prices for vintages are now catching up with the new ones.
Would you rather a mint no longer made 1675 or better yet a 16750 matte for the same price of a new mass produced - chunky ones?

[SubKing]

Originally Posted by oldLeatherNeck

I'd the prices for vintages are now catching up with the new ones.
Would you rather a mint no longer made 1675 or better yet a 16750 matte for the same price of a new mass produced - chunky ones?

?
I'm pretty sure it's been like this for awhile now... for the price of a STEEL meters first red sub with B&P's, you could buy a brand new solid gold Rolex pres straight from your AD.

[SubKing]

Originally Posted by greekbum

Gina its a suckers bubble on some of these watches imho. Ive been collecting since the late 80's its a long time. IMHO prices on studs are way out of reach for many now and they are bidding up the duds. Believe it or not its the biggest topic recently among long term collectors and dealers. They don't know what to do either. On one hand they are not finding any fresh watches for over a year. On the other hand they have sold or are thinking of selling everything they have left as prices are strong. Then you add into this all the questionable watches showing up. The risks are high imho. One of the problem i see with the duds is that theres no parts or people that want to or can fix them. Even for somebody like me it can be a task to find something like a crystal for a Movado sub sea. I searched for years even going to zenith in Switzerland who had one but would not sell it unless full service. I finally found one. What does the collector who's not as resourceful do when one of these duds breaks or needs something is what I am wondering? Trust me it is not as easy as it sounds and will be very costly. Who knows what the future holds though. Today there is instagram and a new wave of vintage dealers. They have absolutely zero knowledge whatsoever about vintage Rolex. Usually a slick blog or website , little to no capital and shop others watches. Is it a bubble then?

I agree with you 10000% and feel the same. I think you hit the nail right on the head.

[onthedial]

Originally Posted by Gina Marie

All things equal higher rates will not affect asset values like most folks think......why would rates rise? Growth prospects are improving......if prospects improve then folks are doing well....if folks are doing well then prices rise....I have made more money in a rising rate environment than a falling one....the fed can raise the fed funds rate all they want.....the 10 treasury moves with the market....not the fed. The 10 yr treasury is what is used to price our mortgages, etc. not the fed funds rate. If you look at the 10 yr rate at the beginning of each QE that the fed did to lower rates vs the end of the QE....each time the 10 yr treasury rate rose from the start of the QE to the end.....quite the opposite of what was expected.....however the market saw economic improvemet and rates rose.....falling rates are more toxic to our hobby than rising rates.

I agree with you, with this caveat: This is a "new world" we're living in and in many ways a kind of economic experiment conducted (out of necessity) by the Fed. If/when inflation enters the picture it will be disastrous if we don't experience, only gradual moves higher. Quick, high moves up and we're toast. But as you said, deflation is the real killer. Case in point: Japan's "Lost Decade" morphed into a stagnant 20 years. Oof!
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Instagram: @onthedial

[Frosty]

Originally Posted by oldLeatherNeck

I'd the prices for vintages are now catching up with the new ones.
Would you rather a mint no longer made 1675 or better yet a 16750 matte for the same price of a new mass produced - chunky ones?

How about a matte dial 1675 and a matte dial 16750?

I think pristine examples in many cases are unavailable or out of economic reach, so more money is being spent on less desirable models due to the price point.

I know several of mine would be out of reach if I had not gotten them several years ago (Thanks, Greekbum). jmho

[onthedial]

Originally Posted by jdmi32

I've seen crazier price increases with other collectibles. I'm of the opinion that the top pieces in terms of condition and eye appeal will continue to go up. If people think that paying a few thousand dollar premium for say a high end Red Sub vs an average Red Sub is bad now, wait a few years and let's see how much the discrepancy is then.

Agreed.
Vintage watch collecting is a relatively new field. The top condition, rare references will likely be immune from any serious value deterioration. It would take something akin to an organized effort by the top collectors to sell en masse, to create a major drop in prices...and that ain't gonna happen.
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Instagram: @onthedial