Will Pateks keep dropping?

[francoamerican]

I saw a white 5711 sell on loupethis for $94,601.10 (including buyers premium)

I don't expect the people who we think of as completely "recession immune", who are watch enthusiasts, pay above MSRP for new pieces.

My anecdotal experience is that the majority buying watches online at premiums are folks with good incomes, but not even independently wealthy (they want to *appear* like the ultra wealthy) However, they *aren't* going to obliterated from the planet of course, so it's just a matter of how widespread the pain is.

I think Patek sports will be like birkins indefinitely going forward (prices rise and fall but always hard to get and never available for MSRP ). They are just too useful and appealing and at the top of the food chain for most people who buy watches.

[huncho]

Originally Posted by francoamerican

I saw a white 5711 sell on loupethis for $94,601.10 (including buyers premium)

I don't expect the people who we think of as completely "recession immune", who are watch enthusiasts, pay above MSRP for new pieces.

My anecdotal experience is that the majority buying watches online at premiums are folks with good incomes, but not even independently wealthy (they want to *appear* like the ultra wealthy) However, they *aren't* going to obliterated from the planet of course, so it's just a matter of how widespread the pain is.

I think Patek sports will be like birkins indefinitely going forward (prices rise and fall but always hard to get and never available for MSRP ). They are just too useful and appealing and at the top of the food chain for most people who buy watches.

agree, same with a lot of royal oaks and certain rolexes

[raclaims]

OR...just perhaps...just perhaps...those same big investment vehicles that love to manipulate markets...those same ones who have invested heavily into the watch market... are using the exact same techniques here...drive up the market...sell off...promote fear and sky if falling....buy up more at discount...drive up the market again...rinse and repeat...

Just something to think about...

[francoamerican]

Originally Posted by huncho

agree, same with a lot of royal oaks and certain rolexes

We’ll see where things are once Rolex makes their next 10,000,000 watches.

[rolexandlange]

Originally Posted by francoamerican

I saw a white 5711 sell on loupethis for $94,601.10 (including buyers premium)

I don't expect the people who we think of as completely "recession immune", who are watch enthusiasts, pay above MSRP for new pieces.

My anecdotal experience is that the majority buying watches online at premiums are folks with good incomes, but not even independently wealthy (they want to *appear* like the ultra wealthy) However, they *aren't* going to obliterated from the planet of course, so it's just a matter of how widespread the pain is.

I think Patek sports will be like birkins indefinitely going forward (prices rise and fall but always hard to get and never available for MSRP ). They are just too useful and appealing and at the top of the food chain for most people who buy watches.

disagree on the last point. the top of the food chain is vintage, rare fresh to market from the original owner/family, and remarkable condition. patek modern sports and the like are just used to fill in blank spaces at the auctions.

[huncho]

Originally Posted by rolexandlange

disagree on the last point. the top of the food chain is vintage, rare fresh to market from the original owner/family, and remarkable condition. patek modern sports and the like are just used to fill in blank spaces at the auctions.

in the watch world or the real world? in the real world most don't care about vintage. how many celebs/millionaires do you see going for vintage vs just a plain 5711? even the ones who are watch guys with crazy collections don't really have vintage (kevin hart, mark wahlberg, ellen, etc)

[rolexandlange]

Originally Posted by huncho

in the watch world or the real world? in the real world most don't care about vintage. how many celebs/millionaires do you see going for vintage vs just a plain 5711? even the ones who are watch guys with crazy collections don't really have vintage (kevin hart, mark wahlberg, ellen, etc)

in the real world most people don't care about watches at all, we are all freaks and that line won't be drawn between vintage and modern. anyway, ellen, who you cited, bought a vintage daytona JPS for $750k, there was a NYT story on it. Jay Z wore a gold patek 3800 to the super bowl. john mayer is a vintage guy. i could go on and on. but case in point a 3700 costs a lot more than a 5711.

[ChetBaker]

Originally Posted by huncho

how is that off topic? did you bother reading the posts or just skimmed them and decided to make a snobbish comment? the point was a lot of the people spending 6 figures on steel models off grey dealers were young kids coming from crypto (as proven on a bunch of youtube channels), and the reasoning was explained. now everything in that world crashed and so did watch prices. i guess it's a coincidence and we went off topic by talking about investments in a thread about watch prices dropping, you can only post so many times about price speculation

ironically you made 0 posts in this thread when it was "on topic"

The point was clear - I was just amused at all the crypto lingo that really made no sense to me and perhaps others in this thread. Anyhow, back to discussing Pateks. Thanks.

[francoamerican]

Originally Posted by rolexandlange

disagree on the last point. the top of the food chain is vintage, rare fresh to market from the original owner/family, and remarkable condition. patek modern sports and the like are just used to fill in blank spaces at the auctions.

I have access to hodinkee too.

But the top of the human food chain see these as the top of the watch food chain.

[joa]

Originally Posted by ChetBaker

The point was clear - I was just amused at all the crypto lingo that really made no sense to me and perhaps others in this thread.

in a thread called "will Pateks keep dropping" a discussion about the influence of crypto markets has the same legitimacy as a discussion about interest rates and supply chains.

[DonLee]

Originally Posted by huncho

i never said perfect timing, you would have at MINIMUM made 200k and upwards of 400k if sold at the perfect time.

you originally said people made 600-850k from just airdrops in 2021. That's why i questioned you.

That being said, the whole bored ape/ NFT market is VERY small, compared to the stock market. Even at bored ape's peak, the combined value was less than 5 billion dollars. Tesla stock moving up 1% is already more than that.

The nasdaq is a much better indicator of the overall liquidity of the market. down as much as 34% from all-time highs, that means over $10 trillion has been evaporated. Recently the market has rebounded a bit, but we don't know if that's a dead cat bounce or not. IMO, until the war is over in Europe, inflation won't stop, and the market won't recover.

I think that this market downturn has hurt hype watch pieces the most. Cuz dealers hoard them like investments. When things go south, they have too many to sell. Meanwhile, dress watches, complications, these have held value much better.

[Vetracer]

Originally Posted by DonLee

you originally said people made 600-850k from just airdrops in 2021. That's why i questioned you.

That being said, the whole bored ape/ NFT market is VERY small, compared to the stock market. Even at bored ape's peak, the combined value was less than 5 billion dollars. Tesla stock moving up 1% is already more than that.

The nasdaq is a much better indicator of the overall liquidity of the market. down as much as 34% from all-time highs, that means over $10 trillion has been evaporated. Recently the market has rebounded a bit, but we don't know if that's a dead cat bounce or not. IMO, until the war is over in Europe, inflation won't stop, and the market won't recover.

I think that this market downturn has hurt hype watch pieces the most. Cuz dealers hoard them like investments. When things go south, they have too many to sell. Meanwhile, dress watches, complications, these have held value much better.

I wouldn’t say “$10 Trillion has been evaporated”. If someone makes a profit, there is someone else who is making a loss. A lot of people have become extremely wealthy with the recent decline of the stock market.

[cascavel]

Originally Posted by Vetracer

I wouldn’t say “$10 Trillion has been evaporated”. If someone makes a profit, there is someone else who is making a loss. A lot of people have become extremely wealthy with the recent decline of the stock market.

Uh, no, that's not how the stock market works, it's not like commodities where for every long there's a short. A stock can drop in price on little or no volume so that all the shareholders lose money. And even if someone sells the day before a sharp drop, the buyer of those shares takes the loss. The concept of money "evaporating" is exactly right, and when stocks go up money is being made out of thin air. Take Tesla, for example. At its peak the market capitalization was about $1.1trillion, now it's $750billion. What happened to the $350billion difference? It evaporated.

[beshannon]

Originally Posted by Vetracer

I wouldn’t say “$10 Trillion has been evaporated”. If someone makes a profit, there is someone else who is making a loss. A lot of people have become extremely wealthy with the recent decline of the stock market.

Exactly

Originally Posted by cascavel

Uh, no, that's not how the stock market works, it's not like commodities where for every long there's a short. A stock can drop in price on little or no volume so that all the shareholders lose money. And even if someone sells the day before a sharp drop, the buyer of those shares takes the loss. The concept of money "evaporating" is exactly right, and when stocks go up money is being made out of thin air. Take Tesla, for example. At its peak the market capitalization was about $1.1trillion, now it's $750billion. What happened to the $350billion difference? It evaporated.

No this is not correct. There is no new money created in the secondary markets, all trades have a buy and a sell. If a stock drops in price it is because there are fewer buyers. No money evaporates.

[Nicof]

Originally Posted by beshannon

Exactly



No this is not correct. There is no new money created in the secondary markets, all trades have a buy and a sell. If a stock drops in price it is because there are fewer buyers. No money evaporates.

Dude…I don’t even know what to say here. Have you ever owned any stocks?


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[beshannon]

Originally Posted by Nicof

Dude…I don’t even know what to say here. Have you ever owned any stocks?


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It’s ok you will understand someday

As for your question yes, I was a Series 7 broker, CFP and Commerical Bank branch manager specializing in credit and mortgage underwriting. But what do I know.

Good luck

[DonLee]

Originally Posted by Vetracer

I wouldn’t say “$10 Trillion has been evaporated”. If someone makes a profit, there is someone else who is making a loss. A lot of people have become extremely wealthy with the recent decline of the stock market.

That is not how the stock market works.
It is not a foreign exchange market, where your loss MUST be someone's gain. If your statement were true, then on average NOBODY would make any money from investing in the stock market, because your gain is someone's loss and they would even out.

Then why would the whole country's pension plan be stacked on large cap index funds? The S&P on average grows 7-9% a year, investments keep compounding every year, then who is losing the money?

If I buy Apple 10000 shares for $130 a share, and the price goes up to $180. I've gained $500,000 in unrealised gains that can be accessed the moment I sell.

Nobody lost money. The people who sold my the shares at $130 didn't "lose money". They simply didn't make any, because they thought $130 was not a worthy price for the stock.

however because I didn't sell it at the time, the price now has dropped back to $130, and suddenly I'm nowhere as rich as I once was.

Originally Posted by beshannon

Exactly

No this is not correct. There is no new money created in the secondary markets, all trades have a buy and a sell. If a stock drops in price it is because there are fewer buyers. No money evaporates.

Not true at all. If no money evaporates, then no money can be grown from investing either.
A price of a stock is what the market AGREES it is worth, where one party is happy with the price to sell, and one party is happy with the price to buy.
If there literally is nobody to buy from, doesn't make the stock worth infinite.
Every transaction connects 1 buyer to 1 seller.

A stock is a piece of a company's business, a very small piece. If the company is making more money, paying higher dividends, growing its revenue, people will believe the price should be higher.
Or there could be government interference like internet businesses in China that lose 20% in value because of a new law restricting kids from playing online games.
The price goes up or down in this case NOT from the number of buyers or sellers, but by what the total market agrees should be the new price of the stock.

So when Tesla was worth just $50 billion, and Elon Musk owned 22% of the company, his net worth in Tesla was just $11 billion. When Tesla shares go up to $1200 billion, his net worth is now over $220 billion. Tell me, who lost 200 billion then? You only lose if you buy all his stake, AND that the company value drops back down to $50 billion.

[Nicof]

Originally Posted by beshannon

It’s ok you will understand someday

As for your question yes, I was a Series 7 broker, CFP and Commerical Bank branch manager specializing in credit and mortgage underwriting. But what do I know.

Good luck

So to recap, according to a former « broker », there is a finite amount of money in the world and when my stocks go up it means somebody else is losing money while when my stocks go down it means somebody else is making money…good to know!

And the earth is flat I guess…


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[cascavel]

Originally Posted by beshannon

Exactly



No this is not correct. There is no new money created in the secondary markets, all trades have a buy and a sell. If a stock drops in price it is because there are fewer buyers. No money evaporates.

Imagine that the market has closed and Tesla comes out with earnings, they're fantastic! Tesla closed at $750/share, the post earnings quote is $850 bid and $860 offered. There have been no trades yet but the market cap of TSLA has risen by $100 billion. That money was created out of thin air. Shareholders of TSLA feel richer, and they are. If the opposite had happened and the new quote on TSLA was $650/share, $100 billion would have evaporated.
The equities market, the secondary market, is designed to create money but is also capable of destroying money, it is not a closed system where one person's gain is another's loss.

[DonLee]

Originally Posted by cascavel

The equities market, the secondary market, is designed to create money but is also capable of destroying money, it is not a closed system where one person's gain is another's loss.

That is exactly why i tell people NOT to "invest" in foreign exchange. where every currency is valued relative to each other. By buying Euros and holding it for 10 years, it's really isn't going to "grow" in value like the S&P500.

lol imagine if the guy was right, that money can't be "evaporated"

Then the stock market crash in 2008, where EVERYONE lost so much money in the stock market, then who made trillions then? why would the economy go bad then since no money was lost

[Incroyable12]

How much has the 3800 dropped?

[cascavel]

Originally Posted by DonLee

That is exactly why i tell people NOT to "invest" in foreign exchange. where every currency is valued relative to each other. By buying Euros and holding it for 10 years, it's really isn't going to "grow" in value like the S&P500.

lol imagine if the guy was right, that money can't be "evaporated"

Then the stock market crash in 2008, where EVERYONE lost so much money in the stock market, then who made trillions then? why would the economy go bad then since no money was lost

It would certainly make central bank policy more difficult if they couldn't take the air out of the economy by raising interest rates and squashing the stock market since for everyone who lost money, someone would be making it. Versus the reality of markets where two interest rate hikes, one for 25 basis points and another for 75, has practically put us into a recession.
I agree that buying another currency isn't really an investment. It can be a hedge, perhaps, the way we bought Swiss francs in the late 70s to hedge against a drop in the $. Ditto for gold.

[Jamesd20]

Originally Posted by Nicof

So to recap, according to a former « broker », there is a finite amount of money in the world and when my stocks go up it means somebody else is losing money while when my stocks go down it means somebody else is making money…good to know!

And the earth is flat I guess…


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Me thinks someone used to tell his clients ‘it’s not a loss if you don’t sell’

[vitalsigns]

We have some definitional issues here. Money is not created merely when a stock goes up (think aggregate money supplies such as M1/M2). Paper wealth is certainly created, but that wealth is only accessed by selling (or some similar transaction), thereby drawing actual money from the buyer (or counterparty). But the wealth effect (i.e., general increase in the value of assets) definitely has an affect on the willingness to spend, so a paper wealth contraction will affect other assets. No surprise there.

Also, prices are set on the margin--i.e., the last sale establishes the value of all outstanding supply. If TSLA trades up $1.00, even if only a single share, then the entire market value of each outstanding share reflects that single share increase. In reality, all of TSLA's stock could never be liquidated at that price (too much supply relative to demand). But money itself isn't created by the $1.00 increase in TSLA value, nor is money extinguished by a decline in the value of TSLA stock. For every buyer there is a seller, and vice versa.

You can thank skyrocketing watch prices on actual money creation....trillions of dollars (euros, yen, yuan, etc.) of stimulus and debt creation around the world and a concomitant increase in asset prices generally. The willingness to bid up asset prices is very much dependent on money supply (the money has to find a place somewhere, and financial assets (and more lately hard assets), for the last few decades, have been the destination of choice...think art, collectible automobiles, fine wine, and yes, watches).

[DonLee]

Originally Posted by vitalsigns

We have some definitional issues here. Money is not created merely when a stock goes up (think aggregate money supplies such as M1/M2). Paper wealth is certainly created, but that wealth is only accessed by selling (or some similar transaction), thereby drawing actual money from the buyer (or counterparty). But the wealth effect (i.e., general increase in the value of assets) definitely has an affect on the willingness to spend, so a paper wealth contraction will affect other assets. No surprise there.

Also, prices are set on the margin--i.e., the last sale establishes the value of all outstanding supply. If TSLA trades up $1.00, even if only a single share, then the entire market value of each outstanding share reflects that single share increase. In reality, all of TSLA's stock could never be liquidated at that price (too much supply relative to demand). But money itself isn't created by the $1.00 increase in TSLA value, nor is money extinguished by a decline in the value of TSLA stock. For every buyer there is a seller, and vice versa.

You can thank skyrocketing watch prices on actual money creation....trillions of dollars (euros, yen, yuan, etc.) of stimulus and debt creation around the world and a concomitant increase in asset prices generally. The willingness to bid up asset prices is very much dependent on money supply (the money has to find a place somewhere, and financial assets (and more lately hard assets), for the last few decades, have been the destination of choice...think art, collectible automobiles, fine wine, and yes, watches).

saying that a stock that rises is only paper wealth, also applies to houses, gold or any asset. Certainly when your house value goes up, your net worth goes up too.
You don't need to sell your house to know how much approximately it's worth, if your neighbor sells his, and yours looks similar in size and quality.
If you have no house insurance, and someone comes over and burns down your million dollar house, nobody gains a million dollars. That wealth is just vanished.


Also if I bought a house at $100k, and later sold it for $1 million 20 years later. I would have turned $100k into $ 1million. Did the person who bought it lose money? No, he can sell it back for around $1 million and get it back.

You can argue that no physical money was created in the process of investments, but actual value and wealth, definitely.

[Aconitase]

A lot of Wall Street summer interns could do with reading this thread.

[vitalsigns]

Originally Posted by DonLee

Also if I bought a house at $100k, and later sold it for $1 million 20 years later. I would have turned $100k into $ 1million. Did the person who bought it lose money? No, he can sell it back for around $1 million and get it back.

I don't have any issue with your first or last paragraphs. That's the wealth effect in action. But to actually realize that wealth/net worth, someone else has to pay you with actual money. The money always has to come from somewhere (absent outright barter).

As to the quoted section, did the person who bought the house lose money? There is no gain or loss at all yet. A non-paper gain or loss requires a transaction (i.e., purchase or sale). To resell the house and not lose money, the owner would have to find another buyer who uses actual money to purchase the house (i.e., money savings or debt (money can be created via debt)).

[fsprow]

Originally Posted by Aconitase

A lot of Wall Street summer interns could do with reading this thread.

Actually I believe they would be shocked at how many watch enthusiasts know so little about economics.

[Tay821]

But the tooth fairy creates money and puts it under the pillow...Isn't that out of thin air

[AHG]

I don't know (not sure anyone "knows") if prices will keep dropping. I recently bought my 3940J in March and after reading this thread decided to reach out to some well known resellers to see what they'd pay for it. It was quite the lowball which I presume is because they know it might be hard for them to sell it. The vintage market is unique but also there are limited buyers. That being said they were going to pay what the watch was selling for just pre-COVID. So I think luxury watches are correcting in price but there is a new higher baseline than 2-3yr ago. That can obviously change in an instant. Just my observation. For now, I'll hold on to and enjoy my beautiful Patek.