All kinds of assets have been falling in the world, but “the second-hand watch market has fallen less“. So while the prices of luxury Rolexes, Patek Philippe and Audemars Piguet continue to decline, they have outperformed stocks and cryptocurrencies.
The figures are clear: the price of high-end used models only fell 8 percent in 2022while the benchmark S&P 500 index was down 19 percent, the Nasdaq Composite plunged 33 percent and bitcoin plunged 65 percent.
And here I share another interesting fact: in a period of two yearsglobal watch aftermarket prices jumped 26 percentoutperforming the S&P 500 and bitcoin.
The luxury watch market pre-owned
Research by the team led by Morgan Stanley equity analyst Edouard Aubin concludes: “Almost every asset class has fallen in the last 18 months, but the used luxury watch market has fallen less.”
Thus, the prices of the watches of the “big three” most common brands of pieces considered “investment” (Rolex, Patek Philippe and Audemars Piguet) decreased in the last quarter of 2022 due to an increase in supply and the normalization of prices. prices after a strong increase in previous years. But the same did not happen with the prices of models manufactured by mid-range brands (such as Cartier, Omega and Tudor), which increased in the same period.
In factall new luxury Swiss, German and Japanese watch brands have not stopped going up every yearwhich has also contributed to the appreciation of certain models in the secondary market.
Rolex, Patek Philippe and Audemars Piguet reign
Delving into the Morgan Stanley report, which includes data from the WatchCharts research platform until the end of January 2023, the main conclusion is that the prices of the “big three” brands already mentioned have continued to fall, albeit moderately. However, there is a big but…
With Rolex, Patek Philippe and Audemars Piguet accounting for around 70 percent of the value of all secondary market deals, it looks like widespread weakness. And in reality it is not so.
For example, the most attractive steel sports watches (such as the Rolex Daytona and GMT, the Patek Philippe Nautilus, and the Audemars Piguet Royal Oak) continue to trade several multiples above their authorized or recommended retail prices at official dealers, despite having fallen since the end of the first quarter of 2022.
Also, outside of those three luxury brands, the market has been much less volatile. The prices of the vast majority of watches did not skyrocket in the first months of 2022, and they have not plummeted since. There is, then, consistency and greater appreciation as a long-term trend.
By the way, the world market for “pre-owned” watches (used) is estimated at almost 20 billion Swiss francs and in 2030 could reach 35 billion, according to a study published by the consulting firm Deloitte. The growth of this segment is such that the British online platform Subdial has developed an index that follows the 50 most traded models and is on the rise.
And while the median price fell from a record 45,000 Swiss francs in February 2022 to 35,000 in September, Deloitte calls that drop a “correction” rather than a sign that the market was shrinking.
It’s time to get that Rolex you always wanted
In an inflationary global economic environment, with war tensions in Eastern Europe and Asia, rising interest rates and a recession that will arrive sooner or later, tangible, real assets will continue to outperform –by far– the performance of assets and instruments traditional investment
Hence, physical gold and silver, the dollar, raw materials, bitcoin, and heritage assets such as high-value real estate (in high-demand areas), works by renowned artists, and high-end luxury watches. “investment” brand watchmaking They will continue to function as safe haven assets and a store of value to which large capital will run in search of protection.for the benefit of those who have bought earlier.
The time is now, when the prices of centenarians and Rolexes, of the dollar and bitcoin remain low, when only the most seasoned, with the right vision, buy to sell in the future and maximize their profits. The vast majority will do just the opposite, which explains why the few always win, while the majority lose.
By William Beard
High level Alto Nivel is the Mexican medium with more than 30 years of stories, content and news on the economy, finance, business and leaders.