Current Market Prices for Rolex Watches

So we are getting poorer or less insane it seems. Whatever reason that is positive development. 

Love it!!!  Thank you for actually providing a fact base!

It is striking to me that we're all talking about the crumbling of the "hype machine" when prices are still significantly above MSRP.  For example, the OP41 in Silver that I bought a while ago was $8,400 on Chrono24, it rose to something like $12,000, and now it seems the listings are at something like ~$9,000.

Nonetheless, in speculative markets, price volatility is a feature, not a bug!  Why?  Because human beings LOVE to gamble!  Why?  Because gambling is AWESOME!

In the case of Rolex watches, somehow, starting in 2016 they became a vehicle for gambling!  The danger for everyone gambling with Rolex as the medium for speculation is that if prices fall too far, everyone will move out of Rolex as the speculative medium...  in which case prices would crash significantly.

The best explanation I've ever come across for how speculative assets work:

https://johnhcochrane.blogspot.com/2020/02/tesla-bubble.html

https://johnhcochrane.blogspot.com/2017/11/bitcoin-and-bubbles.html

In any event, the above is why I sold off my small stake in Bitcoin.  At some point, everyone who's gambling and knows that Bitcoin's fundamental value is $0 says to themselves, "Okay, the volatility was fun for a while, but the game of musical chairs is going to come to an end at some point.  So, why not pull out now?"  At some point, you get a cascade and price declines as quickly as it rose! 

That must have been a lot of hard work tracking down enough grey market watches.  In my industry it would cost $4000.00 for a yearly subscription for the kind of information you just offered to us for free.  The sad thing is that even though I used to wear an OP every day I wouldn't even consider owning one now.  Between Rolex AD shenanigans and the snob appeal type of people who have been buying the brand, I want no association.  

Maybe as we get poorer we are also becoming less insane? 😂

Thank you! 

Yes, there’s a definite correction happening but the numbers seem to suggest that secondary market prices  aren’t going to fall under MSRP anytime soon. 

Apparently, I’m in the wrong industry 😆 

@celinesimon Thanks for the info, as usual.

Where are the secondary prices taken from?

You‘re welcome! 

My own special blend of watchcharts, chrono24, and luxxee’s in-house data. 

If you begin publish your market index prices weekly and lobby a congressman to write a bill that government agencies purchasing watches must pay prices based on your index.  Every watch seller to the government will become your subscriber at your set fee.  Hire an assistant to run the day to day business and take me to Switzerland with you for a watch shopping vacation. 

It’s interesting to note that November 2015 is when Rolex joined Instagram and 2016 is when the steel ceramic Daytona made its debut. 

I like your thinking! 

Yes, it’s based on average market prices. 

I think sites like StockX, watchcharts, and Chrono24 have the volume information you’re looking for.

I had no idea the submariner and sea-dweller had an average market price within $200 of each other. Thanks for compiling and sharing!

It's funny, but every time a gambling opportunity pops up, some family member of mine comes to me to ask me whether it's a good idea for them to "invest" in [insert flavor of the day] - I guess, 'cause I'm the "finance" relative.

Me:  Listen, what you do is you reduce your spending by $500 each month.  Stop buying your 2 venti double half-caff triple shot vanilla frappecinnos each morning, and that's ~$200/month right there.  Find another $300 somehow.  Put that $500 per month in a low-cost ETF that indexes the S&P500, and if the S&P500 meets historical trends of 10.5% returns (since its inception in 1957), at the end of 20 years you'll have almost $364k.

Every time:  But, my friend, Joan knows somebody whose uncle who knows a guy from pickle ball class who bought shares in this venture that plans to mine asteroids!  Did you know that asteroids have lots of precious metals in them?  He got a 10x return on his money in 3 days, and now he's living on an island surrounded by golden monkeys...  literally monkeys made out of gold!

Me:  So...  you're gonna buy...

Every time:  Asteroids!

Ooo…I’m going to have to look into that $500 per month in a low-cost ETF that indexes the S&P500 strategy - sounds like my type of “gamble” 

😜

You know, to be fair, I get that we all have different internal discount rates.  Like, some people are born with the natural inclination to save, while others are born with the natural inclination to spend.  I figure we're all just robots made of organic material, running on algorithms that are encoded in nucleotides, and we simply act according to that programming.  

So, there is no doubt in my mind that when my cousin buys his 2 venti double half-caff triple shot vanilla frappecinnos each morning, it really is a NEED for him.  He was programmed to NEED those 2 venti double half-caff triple shot vanilla frappecinnos each morning.

My only issue is that I wish he would stop telling his mom that his needs are greater than the rest of us kids, and that she needs to redo her living trust to pass everything down to him!  Like, literally, the dude is telling her, "I'm poor.  I'm drowning in debt.  If I can't make my condo payments, they're gonna repossess.  The others are doing just fine financially..."  Like, dude is literally trying to convince his mom to cut the rest of us out of our future inheritances, so that he can get it all...  because he spent all his money on frappecinnos and asteroid investments!

This is one wacky-a$$ world!

Finding even the slightest bit of sanity taking center stage is so refreshing!

well thought out article and you know where to get all that info through experience. Any predictions? I'm thinking the Chinese getting out of lockdown will drive prices up for portable wealth. Like a gold bar that ticks but border guards will not take.

Oh, dude, yeah.  This used to be the province of finance professionals and whatnot, but John C. Bogle popularized it - a true hero.  Nobody's ever heard of him before, but truly one of the greatest human beings to have ever walked the earth - he could have enriched himself off the backs of unsuspecting investors, but instead did right by Main Street savers:

https://en.wikipedia.org/wiki/John_C._Bogle

Here's a simple primer on how to think about investing:

https://investor.vanguard.com/investor-resources-education/how-to-invest/risk-reward-compounding

So, as they say...

The S&P 500 is just a market-capitalization-weighted index of the 500 leading publicly traded companies in the U.S.  Can people outside the U.S. invest in it?  I would imagine so.  So, for example, I will go to my brokerage, Charles Schwab, open an account, and every month, at the end of the month, I transfer in $500, and then use that $500 to buy "IVV" which is just an ETF that tracks the S&P 500 index:

https://www.google.com/finance/quote/IVV:NYSEARCA

And if you do that for many, many years, and don't take the money out, and reinvest all dividends, etc., etc., it grows into a giant EFF'ing pile of money.  

Exponential math is something that the human brain simply isn't designed to understand intuitively - which is all compounding returns is.  So, for example, if I said, "How much money will your investment be worth in 40 years if you put $500 away each month into a low-cost index fund that tracks the S&P500, and you never take any money out, you always automatically reinvest all dividends, etc., etc.?  Hell...  you just pretend the account doesn't exist, and only look at your brokerage statement 40 years later."  

Take a guess...

....

...

...

At 10.5% annual average returns, that $500/month transforms into $3.043M.  

Here's something even crazier.  Typical actively managed funds charge 1.5% fees.  That's nothing, right!  I mean, what's 1.5%???  So, if you put your $500/month for 40 years into an actively managed fund, and the fund manager performs just as well as the S&P500, you end up with...

Take a guess...

...

...

...

$2.027M!!!

In other words, the 1.5% difference results in you going from having $3.043M down to $2.027M!!!  That 1.5% makes a HUGE difference, because of the power of compounding over time!

Anyway, somehow turning this into a finance post!  If you want additional reading material, etc., etc., happy to PM you!

Very interesting read, thanks for sharing! 👏

Greater fool theory has unfortunately taken over just about anything that can be monetized

Better market for watch enthusiasts, worse market for flippers

Rolex make alot of watches a year sells them for a good fair price to mostly dealers. It's the dealer who sells them after they get them for a Rolex price. They marked them up double and triple the real Rolex prive. So high.  Greedy getting Rich. Yet so many still pay them high prices.  Please folks wake up. 

Thank you this information! 

I would have to go back and crunch the numbers to come up with an accurate answer to this. But from memory, Rolex used to only increase MSRP every few years and not by that much. However, in more recent times, I believe Rolex has increased MSRP every year and by at least double-digit percentage. Again, i don’t have all the data in front of me so don’t quote me but I’m pretty sure that’s been the trend. 

No predictions from me but I do think that Rolex should really pay attention to the frustrations of potential buyers and try to (genuinely) fix the distribution issues. 
 

There was a time when Baselworld was considered untouchable and management ignored all the criticisms…and their downfall was pretty spectacular. 

Thanks Morg! I can’t stand “shouty” commentary so I always try to stay as neutral and calm as possible when I write. 

Thanks Celine gor the research and information. Well done and thorough as usual. 

That was my impression, also. (No need to look up the details, but thank you.) It also seems to me that the availability in the pre-owned market had increased, also. Prices are much harder to gauge.

What I was trying to say is: If Rolex can continue with their latest pricing strategy without a significant drop in demand, then the latest price decreases on the secondary market are merely a correction.

Humm, From what I know Rolex is set up as a non profit origination and not as a company and hence cannot make a loss or have to give away any profits as under Swiss law they would lose Non Profit status and have to be set up as a register company which would also mean they pay much higher taxes. But I could be wrong 🤒