Quote:
Originally Posted by Vince_76
You’re drawing a 1:1 correlation to fed funds rates/liquidity/economic health and asset pricing for a trinket.
I think you’re forgetting a key part of the analysis - that watches as “investments” was the flavor of the month so to speak during COVID. But things fall out of fashion, and it’s becoming ever more apparent that flippers are getting squeezed out. So the demand is not linear. Once we get to a point where folks realize they’re losing money out the door. And we’re getting closer to that every day.
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No, not drawing a 1:1 ratio - but know all too well that watches weren’t unique. They were one of many segments that were impacted.
Ultra speculative equities (SPACs, anything Cathie Wood endorsed), crypto, some watches, some cars, some cards, some comics, some coins, some stamps, some <insert additional segment here>) - all more than “linearly” impacted.
All those categories unwound. Sometimes carrying other assets down too far - savvy investors buy when others panic.
The watch market - Patek and AP in particular but also Rolex to a lesser degree, dropped sharply as well. But that unwind - it already knocked off the speculative flippers from AD waitlists. They are mostly not participating other than holding inventory. I mentioned the inventory overhang (or think I did) but that is unlikely to crater the market further. Why? Because the true excess demand has been there for a while… and global wealth has gone up more than production over the past few years. So fundamentals are strong.
I perversely wish the market would crater - but there are many others ready to pounce too. Remember, this is all dynamic and iterative, not static. If demand falls sharply overall, rates will follow. One won’t happen without the other and those trillions in short duration investments will flow right back in…