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Watch market update 2023 Fall/Winter

 
High inflation started the hike to higher Interest rate, which in turn aims at nullify consumer’s spending to cool off inflation. Although now might be at the end of interest hike, but the rates cuts might not come as fast as we hoped for; we believe high interest rates will persists into 2025. New conflict in the Middle East and the ensuing tension generated this situation worse.
 
Resale price for luxury watches may continued to fall, as effect of monetary tightening kicks in. On our previous review (6month ago), we were expecting price to fall as spending luxury will slows and further dip in prices wasn’t unexpected:
 
To simplify the discussion we will talk about high interest rate rather than inflation. Previous narrative on inflation was important since we were trying to predict how high the rates will go. Next we need to know how long these rates will hold, and to look at the effectiveness of these actions, the extend the economy will slows and consequently the consumer’s confident and spending. COVID19 stimulus boosted spending as the cash handout was effective in preventing a melt down of the economy during the lock downs, that however sowed the seeds of a runaway inflation in 2021, almost all asset classes including luxury goods become entwined with speculations.
 
In 2022 the start of a sharp hike interest rates along with the resumption of travels, started the decline in the luxury watch price. Because of the bubbly watch prices, it quickly came crushing down, many of the hot models Rolex & Patek Phillippe prices halved (off the peak) just a year later.
 
Prolong period of elevated interest rates will eventually hurt spending, as high cost of borrowing slows down the economy and affecting employment, wages etc. Demand for luxury will reduce too.
 
 
 

Rolex Submariner 126610LV

What might happen?
The trouble in China’s property market and the shadow banking looms. For certainty we are not able to get an accurate picture of the situation there right now. Western analysts and Chinese information will never sync, hence it is better to take a more moderate stance when assessing the impact from the troubles there. Chinese demand for luxury is the key driver for demand for Swiss watches over the past decade or so. It is understandably the factors will have a negative pressure in the luxury watch market. Keeping interest loose monetary policy (like Japan, BOJ) will be critical to prevent any crash in the Chinese economy. This However, this will further dampen the Chinese appetite for luxury watches.
 
The wars in Ukraine and Middle East:
The world attention on the war in Ukraine is diverted to the troubles in Middle East. So far both conflicts are localized, but ongoing tensions can easily cause a spark in the Middle East’s haystack. Rich oil states are big patronage of luxury watches. They definitely going to cause the market to stir should they be drag into conflict of any sorts.
– Reopen of leisure travel:
As we stressed previously, the resumption of travel after Covid19 has now played a significant part to the slowing for watch market. Travel and vacation will be prioritize
over buying of luxury goods in 2024 through to 2025, especially when luxury watch prices continue to unperformed.
 
Investors and Speculators Exit:
Similar to crypto and NFT, the once coveted Swiss watches like Rolex, Patek Philippe AP, Richard Mille etc. became speculative in 2021-2022. And as quickly, it fizzled out.
 
With market prices now close to pre-covid. It is painful but inevitable, once the speculative forces were in play, it usually don’t up end well. This may plays out well for genuine watch collectors since “investors” fled the scene.
– the return of the artisans focus watches. Collector focus will divert back to the quality and the beauty of the creations, rather than the “future value”. With the demands of luxury watches expecting to slow down during the next 2-3years, this allow watchmakers catch a breather and shift their focus to making higher quality models, rather than focus on meeting the seemingly in-exhaustive back-logs.
– situation at AD wait list improves, bundles strategies will no longer can help AD boost sales. It is back to human interaction and sale convictions to entice collectors to swipe their cards. The return of luxury shopping experience.
– Interest rate cuts:
 
Markets of late become very buoyant by the talk of rate cuts happening as early as next March. This is something we have to be very careful about. Should they done it too soon, the inflation be come back strongly again, it will be harder to cool off again. Just the talk of rate cuts can cause the Market to celebrate and DJIA almost hitting all time high. Quite blatantly, the condition is obviously to ready rates cuts, there is just too much liquidity and purchasing power out there. Any sort of positive news or will spark such massive rally; it is too early for such victory lap, because war against inflation is not won yet. With USA presidential election approaching, political pressure may come into play too.
What we ought to do?
Our philosophy is always avoid the herd-mentally, and avoid assets and shares when late in the game, avoiding them when at uncomfortably high valuations. Take necessary profits and wait patiently for new opportunities.
While we are avocation self-control and being prudent over the past year, that doesn’t mean we have totally stop spending on luxury. Having avoided the investment pitfalls over the past year and while having shifted huge chunks of portfolio to a safer interest yield accounts or bonds, etc. why not reward yourself with a nice watch?
 
However, in lean times we do get better service in luxury boutiques and restaurants. Spending on times when your peers are not capable of, it is very visible. When times are good everyone are just trying to outdo each other. By the law of diminishing return, luxury become “expensive” and “competitive”; luxury is “more exclusive” during downturn, walk into a near empty boutique and there will be at least a couple of SA waiting to serve you. Money is spend“more wisely” and more efficiently.
 
Situation now limits what we can gain from investment into physical assets, but that doesn’t mean we cannot buy. If a genuinely grail watch appeared at an acceptable price. Why not consider?
 
Let’s continue the process of reviewing our watch collection. Trade or sell off the excess watches and have to fund ready for grail or simply redeploy the cash elsewhere. I cannot stress more that protecting capital is always the most vital part of investment. Chinese proverb: as long there are trees on mountain, and we won’t have to worry lack of fire wood.
Brands in prospective:
 
Rolex:
Rolex, one of the largest private entity that creates physical asset, had since acquired Burcherer, a leading luxury watch retailer in Europe. They also rolled out the certified used Rolex program, aiming to capture a segment of used market as the retailing network. While we are yet to understand the impact, one thing for sure is Rolex now have the influence across the entire Rolex watch’s life span (R&D>design>mfg>sales>servicing>reselling>vintage recertification/sales). This impact probably will be clearly 1-2years down the road.
 
Patek Philippe:
Patek Philippe continues its color and gems-setting trend, they also created a minute repeater on Aquanaut, ref. 5260/355R. The first repeater ever on the PP sports models. Judging for the recent Nautilus and Aquanaut release, we will be expecting Patek Philippe to produce more Aquanaut/Nautilus in precious metals rather than in SS. With Nautilus 50th Anniversary, just merely 3years away (2026), we won’t be expecting 5811/1A or 5812/1A to launch anytime soon.
 
Audemars Piguet
AP perhaps is the biggest loser of all. The Royal Oak 50th Anniversay haven’t be a success unfortunately. They need better better innovations and ideas in order to recapture the market share. In the weakening it will be very tough.
What have Les Precision been doing:
The effort to lower our watch inventory it is slower than expected, since the last update we mentioned the strategy for 2023 will be a 30:40:30 (watches:fixed income deposit:cash). However, it seems the watch market situation deteriorated faster than we expected. We decided to cut losses on some watches we had, as always most important is always capital preservation. Inflation is far from over, we believe FOMC to keep interest rate above 4% at least throughout 2024. Work on inflation is far from over, with inflation lowering much slower than expected. We are worry about the holding of other physical assets, including properties and precious metals. Now the world is in the process of ending inflation and what will follow WILL BE THE REVERSE. It is still a far shot, but it is better to drill in this concept and place the bets correct before big institutions recognize and follow suit. Assets will become “less investible” as money supply dwindles down. It is important to understand that, it is matter of time before assets prices drop further. Hence keeping wealth in cash is more important than anytime since 2009. It is hard to understand concept, and the reason why we want to put this forecast out 12-18months before it happens, is because it is getting much harder to liquidate assets going forward. Hence, it is better know and prepare for it before the masses wake up to their senses.
 
Disclaimer:
* Do note that “prices” we refer to in this article are referencing from the grey market. Watch prices can be very volatile recently. Any reference to the price and value is only valid at the point of writing.
* We are not affiliated to any brands, neither do we received any advertisement money. This is purely written out of individual views and standpoint, we do not take responsibility of any losses result from the actions taken according the information or views published above.
* This article is written based on the current understanding on the world and financial situation; situation can change or deteriorate. We will also disclaim against the other possibilities of disruptions to the economy like for example trade wars, natural disaster or oil/energy supply shock.

ROLEX SUBMARINER 126610LV “Starbucks” Mk1 vs ‘Mk2

During April Rolex collectors noticed that the photo of Submariner 126610LV in the Rolex website appeared in a lighter shade of green. Hence the speculation of the imminent release of the Mk2 “Starbucks”.

A little later, in June we starting to see these Mk2 appearing. Here’s the photo comparison between Mk2 (left) against Mk1 (right). 

Watch market update 2023 Spring/Summer

 
High Interest rate means higher cost of borrowing. Business needing loan expansion will have to pay much interest on the borrowing. This in turn will cause a slowing down in businesses hiring and hence competition for hiring qualified workers become less intense. Inevitably, the need to pay higher salary to attract the suitable workers is no longer necessary. Lower salary and a higher unemployment rate, will bring along lesser consumer spending power, hence easing the inflationary pressure. That’s main tool that Fed Reserve using in the battle against inflation of the past few decades . Again this discussion on luxury watch market will be dominated by the monetary policy of the central banks. Curbing the spending power of individuals are the most effective tools they have to bring down this runaway inflation.
 
The cheap money, the ample funds which government dished out during the pandemic, a tight job market aftermath all contributed to the phenomenon price surge for Rolex and Sports Patek and AP prices up till the early 2022.
Since peaking during March of 2022, plummeting prices wipe away 40-50% value of many people watch collections. We shouldn’t be too surprised that the decline of watch price coincided with the start of Fed Reserve interest rate hike at around March 2022. Some journalists are quick to connect the dots and attributed the watch market burst because of cryptocurrency downturn. I personally disagree (to some extent) with this notion, as it is clear that other asset classes such as Bitcoin, bond prices, and housing market in some countries also start reeling from the steep rates hikes: As the supply of fresh funds to pump up the asset markets sudden slowed.
Patek Philippe Nautilus 5980/!R (Boss Watch)
In May, cryptocurrency market was further rocked by the dramatic collapse of Lunar and triggered the fallout of a major hedge fund, the Three Arrow. These send the crypto world into a downward spiral. The crypto market themselves like the watch market are merely the victims of interest rates hike. The lack for regulations and governance will further exacerbate the situation as we witness several more collapse of the crypto exchange and funds, just months following the start of rate hikes. Rates hike don’t imploded the crypto market, it only provide a spark in the sea of dry hay, as poor regulation and lack of clarity were cruelly laid exposed.
 
Now, we all should come to a consensus that for inflation to be eradicated, 2023 will have be a year with less job opportunities, less salary growth, slightly higher unemployment rate, higher interest and month installment for house mortgages….etc. So spending on luxury will slow down and prices of watch may take a further dip. High interest rates will around longer than most people hope: hence a sluggish rebound watch resale price will be expected. It might be late as 2025 before the watch price will start the appreciate once again.
Previous review: we highlighted the risk of inflation and what are the consequences of Fed Reserve’s action will bring:
 
Rolex Daytona 116500LN (Panda)
The inflation of today can be resulted from the Quantitative Easing (QE) policies from the central banks has been in place for past decade. Cheap borrowings flooded the markets with hot money ended up speculating almost on anything with value, from Crypto to Nike Sneakers, from watches to properties. Compounding this problem are Geopolitical problems like Ukraine war which created havoc to energy and food supply chain; OPEC cutting energy output amid European energy crisis, changing weather pattern, trade wars etc..
 
At the same time a very tight job market (favorable wage growth) means the purchasing power of individuals improve and runway asset price and unwanted inflationary pressure follows. When individuals are flush with cash, surely they will indulging or speculating/investing on luxury watches Rolex and Patek watches. These luxury watch is a symbol of wealth and they become a common goal for many.
 
Now as interest rates rise many of these individuals experienced increasing difficulty on the cash flow. Houses bought with low cost loans (low interest rates) previously now have to repay at a much higher SIBOR rates. Some may sell watches from their collection to free up some cash as their priority is to have adequate funds to refinance the loans, to lower the borrowed amount. Cash rich individuals who once lamenting on low interest rates were and decided to put money into watch investment instead for better yield, can now sell of their watches and go back to bonds or fix deposit.
Rolex Oyster Perpetual 41

What might happen?

 
China and post lockdowns
Many of the people I spoken to are hoping that the opening up on China economy will no doubt positively impact the luxury market. This might be true, but only for a couple quarters at most. China emerged from the lockdowns much later than all the countries, the people have penned up frustrations and willing to spend. However, at the same time, the world demand for the goods that Chinese produces are waning: Western countries and USA economies are still engaging in a form trade against the Chinese. China just entered the period of negative population grow last year, yet the entire generation are saddled with a housing loan that may take more than a generation to repay. They too will be heading for a 1990s Japan style of housing bubble collapse, yet at the same time have to difficult situation of inflation to deal with. The authorities may have to keep the interest low, to reverse the fortune of the property market, but this will cause inflationary pressure, especially raw material and food prices, which will harm their competitiveness.
 
The business of war in Ukraine:
War is inflationary. Imagine nations spending heavily on weapons, then destroying them in action and buy more again, the cycle continues on. This cycle consumes energy and raw material. It has to be funded so how by someone. It is actually a cycle inflation:
  • Drive up the demand for raw material and energy
  • Jobs creation in the arms industry.
  • Funded by loans and money creation. This have to be bear by tax payers for years to come.
  • War machinery built will to be destroy in action and new weapons will be needed once again.
  • Being a big agricultural country, food supplies web across the world are disrupted, leading to higher food prices.
Perhaps now is not the best time to keep non-yielding assets, such as gold, watches, crypto etc. Basically assets that rely on capital (value) gain for profits. (Even properties for that is not rent out also falls into this category, especially those properties that is funded by loans). These will be stagnant in prices, while investors holding them will be losing opportunities on interest generation in bond or fixed deposit (FD).
For example: Rather than buying a Daytona 116500LN at S$40,000, putting this amount of money in the bonds and FD, the investor can instead gets 4-5% (S$1600-2000) return next year.
 

Travel resume, will-be buyers channeling funds for travels or choose to buy luxury when overseas, taking advantage of tax free shipping instead, hence a weaker demand on resale or grey market.

Investors/speculators exited:
Rolex, Patek Philippe AP, Richard Mille etc. now close to pre-covid prices. Painful for the collectors and investors who bought luxury watches as a hedge against the surging inflation. This correction of 2022 was caused by bursting of speculation bubble. We believe prices will continue to show weakness till 2024 after. Even by then, there may not have a situation of a quick price rebound, as confidence had taken a hit; speculations on watches will not re-emerged so quickly.
  • the demands of luxury watches is expected to slow down next 2-3years, although the current stock situation in ADs remains visibly low.
  • situation at AD waitlist may improves a little as premium of resale of hot models in grey market drop. These help watch buyer as AD will be asking for a potentially smaller bundles attached to some of the hot models too
 
 
Rolex Daytona 6241

What we ought to do?

 
As always, we urged everyone not to put all the cash into watches. This more critical now as situation now is clearly not the most ideal time to invest into physical assets. While we can take comfort that watches are going to worth some money at the end of the day. In events of economic downturn, watches are the first thing people sell or pawn; most people need a roof, they need a mode of transport for delivery and continuation of the small businesses. Let’s continue the process of reviewing the watches held within our collection. Streamline our collection and at the same time free up capital to fund for new purchases or simply standby some cash for any possible opportunities that may come by. Some affluent individuals may still need material comfort even in lean times, so there is really nothing wrong hanging on to a watch collection. After all we do want to enjoy the finer things in life; we must understand as long there are speculation and profiteering, losing value (or gain) on watches is a byproduct that we all have to deal with.
 
However, the shift trends was evident, current models and newer model/design have better resale price. This means as time goes, a watch actually suffers from degenerative price as it gets older. So it is unlike few years ago, when any discontinued watch is naturally a good investment bet. This we feel is the most troubling now, as it is making modern luxury watches un-investable.
Rolex Submariner 126610LV (Starbucks)

Brands in prospective

 
Rolex
 
Rolex continue to lead the market as the premium luxury brand, although speculations had eased somewhat; many people still is Rolex watches and value protectors. Daytona received a total make over for the 60th anniversary; certainly to the delight of collectors who are hopping that the “Panda” and “John Mayer” Daytonas will see significant gains in prices after discon. Also Milgauss was removed from catalog. However, we urge caution in to buying discounted models as the appreciation in price very much depends on the future taste/trend. As mentioned earlier, people prefer now prefer newer and slicker Rolex. We aren’t too sure if collectors will be consider a 116500LN or 116400GV when come to grail hunting. Since 126500LN are making in the thousands and 116400GV seem pretty dull and not as exciting as the GMT or green Submariners.
Patek Philippe Nautilus (left to right) 5711/1A, 5712/1A, 5980/1A
Patek Philippe
 
Patek Philippe continues its rebranding process and continue to try be relevant to the trend of the day, launching colorful Grande complications and Calatrava models. I haven’t enjoy looking at these new PP creations over past few years; perhaps they are try too hard to stay relevant to the demand of today’s watch collectors. Needless to say, we aren’t to worry about what we don’t like. We just make sure the Nautilus and Aquanaut remain popular and liquidatable.
Audemars Piguet Royal Oak Ultra-thin 15202
Audemars Piguet
 
AP once part of the “Trinity”, seem to join Vacheron Constantine and slipped quiet in to obscurity. After Offshore, AP banked on Royal Oak series to generate the buzz which didn’t happened. The push to introduce tens of new model and hundreds of new colors only left collectors dumbfounded and confused. It back fires big time. We definitely not considering AP watches to be investment worthy anymore.
What have Les Precision been doing:
 
We felt the worst for the watch market is over, yet we resisted the temptation of going all on watches. Although inflation is improving, but still it is far from over; the collapsed of banks in USA only send a clear signal to central banks that they cannot raise rates they deem fit, without harming any parts of the financial system. It is a tricky situation, as slower rise means the battle against inflation will prolonged. It is evident from the sharp rise in gold price lately, that investors rather park their wealth in asset and hold on to the safety of gold. We understand watches can never be on par with the safety of gold, yet better rather than hold cash and be eroded by inflation. (Gold can be subjected to quick price fluctuations as nigh funds or institutions can move vast amount in and out of it as situations arises) We prefer this strategy for 2023, 30:40:30 (Blue-chip watches*:fixed income deposit:cash).
*Some blue chip watches we recommend:
PP 1518, 2499, 5970, 5004, 5711, 5712, 3712, 5980. Rolex sport with stable price history and such sports models.
 
As it stands, we may want to reduce watch holding further as 2024 approaches. It is going to get harder to cash out watch investment, as challenges in the greater economy, will put many people off against buying more watches.
Rolex Submariner 16610LV Kermit

Watch market update 2022 Fall/Winter

INFLATION. We are living through the worst period of inflation in the living memory. I have spoken on it a couple of months ago when Rolex and Sports Patek and AP prices are plunging. Today I need to reiterate that inflation is very “sticky”, it is something that don’t come or go away easily. High interest rates will be here to stay. Most people still haven’t make the connection how badly this high interest rate is going to hurt the watch market. I do want to talk more about the Macro-economy situation ahead especially in 2023.

Previous review: we highlighted the risk of inflation and what are the consequences of Fed Reserve’s action will bring:

https://lesprecision.com/…/watch-market-update-2022…/…

https://www.facebook.com/847818355239027/posts/5180942225259930/?app=fbl

The inflation of today can be resulted from the Quantitative Easing (QE) policies from the central banks has been in place for past decade. Cheap borrowings flooded the markets with hot money ended up speculating almost on anything with value, from Crypto to Nike Sneakers, from watches to properties. Compounding this problem are Geopolitical problems like Ukraine war which created havoc to energy and food supply chain; OPEC cutting energy output amid European energy crisis, changing weather pattern, trade wars etc..

At the same time a very tight job market (favorable wage growth) means the purchasing power of individuals improve and runway asset price and unwanted inflationary pressure follows. When individuals are flush with cash, surely they will indulging or speculating/investing on luxury watches Rolex and Patek watches. These luxury watch is a symbol of wealth and they become a common goal for many.

Now as interest rates rise many of these individuals experienced increasing difficulty on the cash flow. Houses bought with low cost loans (low interest rates) previously now have to repay at a much higher SIBOR rates. Some may sell watches from their collection to free up some cash as their priority is to have adequate funds to refinance the loans, to lower the borrowed amount. Cash rich individuals who once lamenting on low interest rates were and decided to put money into watch investment instead for better yield, can now sell of their watches and go back to bonds or fix deposit.

– Sell off increase:

Rolex, Patek Philippe and Richard Mille enjoy a year long rally, until recently, as prices took a plunge. Last 6months can be bitter for both collectors and investors alike, the value of watches drop, despite of surging inflation, and this mostly attributed to the speculation during the few months before that. We believe prices will continue to show weakness till 2024. Even by then, there may not have a situation of a quick price rebound, as confidence had taken a hit; speculations on watches will not re-emerged so quickly.

What might happen?

The inflation is not as bad as that of 1970s but does have some similarities. For example: the geopolitical tension around the oil embargo vs the energy crisis started with Ukraine war and currently OPEC deciding on cutting down production despite the uproar from USA; collapsed of Bretton Wood agreement (USD was unpegged to Gold) vs the decade-long monetary easing since the Great Recession of 2008. More worrying right now is this situation is set to continue into 2023 and beyond. It is been more than 6 months since the Fed Reserve started the steep interest hike and the combat against inflation don’t seem to gain much ground since. Especially when other Central Bank such as BOJ, China Central Banks doesn’t share the same urgency. It is hard to cap-off the inflation when the second and 3rd largest economies still on loose monetary policies. Another observation is that market rally easily on any positive news, this goes to show the market is still flooded with excessive liquidity, this is excessive is something that has to go before the fight against inflation can take a turn.

– now is not the best time to keep non-yielding assets, such as gold, watches, crypto etc. Basically assets that rely on capital (value) gain for profits. (Even properties for that is not rent out also falls into this category, especially those properties that is funded by loans). These will be stagnant in prices, while investors holding them will be losing opportunities on interest generation in bond or fixed deposit (FD). For example: Rather than buying a Daytona 116500LN at S$40,000, putting this amount of money in the bonds and FD, the investor can instead gets 4-5% (S$1600-2000) return next year.

– the demands of luxury watches is expected to slow down next 2-3years, although the current stock situation in ADs remains visibly low.

– situation at AD waitlist may improves as premium of resale of hot models in grey market drop. These help watch buyer as AD will be asking for a potentially smaller bundles attached to some of the hot models too

– Strong currency hurting resale price. Although watches in countries with weakening currencies like for example, Japan somewhat hedged against it own currency weakness.

– Travel resume, will be buyers channeling funds for travels or choose to buy luxury when overseas, taking advantage of tax free shipping instead, hence a weaker demand on resale or grey market.

What we ought to do?

As always, we urged everyone not to put all the cash into watches. This more critical now as situation now is clearly not the most ideal time to invest into physical assets. While we can take comfort that watches are going to worth some money at the end of the day. In events of economic downturn, watches are the first thing people sell or pawn; most people need a roof, they need a mode of transport for delivery and continuation of the small businesses. Let’s continue the process of reviewing the watches held within our collection. Streamline our collection and at the same time free up capital to fund for new purchases or simply standby some cash for any possible opportunities that may come by. Some affluent individuals may still need material comfort even in lean times, so there is really nothing wrong hanging on to a watch collection. After all we do want to enjoy the finer things in life; we must understand as long there are speculation and profiteering, losing value (or gain) on watches is a byproduct that we all have to deal with.

Brands in prospective:

Rolex:

Rolex watches will still be the top luxury watch brand, although current hot models had been subjected to speculations. Demand for Daytona, Submariners, GMT etc. will still be there. Only question is availability and price. As usual I only recommend SS (steel) model should be kept as the core part of your collection. Historical, steel is the metal that Rolex collectors favor, there isn’t any metal that can match SS subtleness and practicality. The recent launched of the DeepSea Challenge 126067 in titanium and left hand GMT-master can be a sign that Rolex is moving towards a more diverse offerings. But they won’t go into AP style of confusing collectors with a offering of multiple color dials for single models.

Patek Philippe:

Patek Philippe proclaimed the brand itself bigger than Nautilus or Aquanaut, but somehow raised a few eyebrows when 5811/1G was launched. I haven’t not spoken too favorably for PP creations over the past few years. Unfortunately this is again another proof that riding on the Nautilus waves is hard to resist. However, we feel in future there will be more Nautilus of precious metals and less in steel. The appetite for Nautilus or Aquanaut is inexhaustible, even more expensive gold models sell well. This should make the SS Nautilus more collectible: 5711/1A, 5712/1A and 5980/1A. These contemporary designs remain the watches that I will continue to recommend. They will continue to worth more than their own weight in pure gold.

Audemars Piguet

Much anitpaction on AP Royal Oak’s 50th Anniversary didn’t become the talk of the town. If fact it become so clear that AP isn’t very interested to sell you a Royal Oak (RO). They want you to buy a bus load of them. This is absurd when you look at how many colors they are offering and all the rainbow dials they producing. If Offshore can’t sell, why not try sell more RO?!? Collectors will decide if enough is enough.

What have Les Precision been doing:

Over the past 6 months or so, we exited from most Rolex and most Patek Philippe Nautilus. Since Feb-March we have cash out as much as we can, despite of the surging prices at that time. It pays off somewhat as we manage to execute what we hope to sell. Rolex 116600, 16600 been our long term investment and we still feel it is worth holding to some. We held on to a 3712, although it since lost 30-40% from the peak of March 2022, 5712/1A might the next to be discontinued right after 5711/1A. Still might be good to have 1 or 2 5712/1A or 3712/1A in the collection.

Watch market update 2022 Spring/Summer

The restrictions on COVID will surely eased off in later half of 2022, this will make way for boarder expansion economy and reprisal for industries/businesses battered by the pandemic. Before we pop the champagne and dusk off the travel bags, let analyzed whether these optimism indeed for the better, especially the lofty price luxury watches.
(Previous review)
Rolex Daytona 116506, once again is subject of speculation on possible discon

Background

The Quantitative easing policies from the central banks has been in place for past decade. Just when they are in the process of tapering and increasing interest rates, COVID struck. Backed by almost unlimited money supply, crashing of economy was averted. When the system is flush with cash, along came the runway asset price and unwanted inflationary pressure. Money have to spend or invest somewhere, this will explains the phenomenal price of Rolex and Patek Philippe sports’ watches recently. Moreover, many people now find it lucrative to hold (or hoard) watches, this resulting in further shortage of watch supply coming onto the market, as result, further escalate the prices.
 
War in Ukraine:
Russia is being punished with heavy sanctions, but collateral damage hits both the Russian’s economy and the rest of the world. In any war there are only losers, here’s why:
– Russia is an exporter of energy, gas and oil price export ban is pushing the energy prices up across the world. Every type of raw materials, agriculture produces, and manufactures products are affected; basically almost everything requires energy to produce, process and transport.
– Russia is the largest country with enormous natural resources, banning the export of mineral and ore, raw materials cost will be driven up too. Food price will be affected too, as both Russian and Ukraine are the largest gain producers in the world.
– Precious metals price are up. Uncertainty of the conflict drove the gold prices up.
 
The China’s big COVID question:
China zero Covid policy, means it is going to cut her people away from globe travel. This is bad for many of the embattled economies that rely heavily on Chinese tourism, thus slowing down the prospect of recovery post Covid in these countries.
 
Inflation?
2021 inflation was resulted from excessive monetary supplies that causing excessive spending habits; 2022 will be the story of rising energy/material/food cost. 2022 is going to be more painful, every house hold is going to have less extra cash to go around each month, after paying for the life essentials. There is also a general fear or reluctance for investors to keep cash is this situation, this lead to a rush into investment of assets, which may lead to the likelihood of an asset bubble. But in due course, this also may cause central banks the rethink the plan to hike interest rates, as they don’t want to overdo it and stall the economy or bursting the asset bubble which lead a much serious situation.
 
 
For second successive years, rumors of discontinue, drove the price of Daytona 116508 (John Mayer) double from 6months ago.
By now we more or less understood the reason why watch prices shot up. Many people now consider Swiss Watches to be an asset and some of them invest their money on watches in favor of the more traditional investment like shares, bond, etc:
– Popular models from Rolex, Patek Philippe, Richard Mille and Audemars Piguet sold out and resale price skyrocketed. This unfortunately also created a sales culture which many of us dreaded: bundles deal (purchase with purchases).
– Efforts by these above brands to curtail the premium pricing of watches resulting in AD forcing customers to take up “bundles deals” and customers are require hitting certain amount spent before allocating a hot model watch like Rolex. This not only boost sales for the AD, as customers now are force to buy the less popular brands like Tudor IWC, Franck Muller, Bulgari etc. in order to “clock enough purchases”. The getting people to buy watches that they don’t need caused a huge excess stocking of these models in the resale market. These watches are traded at a fraction of the retail prices. Huge losses in these watches means that the hot Rolex have become more valuable; as customers “sacrificed” huge losses in bundles just to have a chance to buy a Rolex. While it may look good to the export numbers of these lesser brands, the real issue is the lost of reputation and desirability are actually irreversible – damage is permanent.
Rolex 116500LN, another of the big price gainer

What might happen?

The big 4 (Rolex, PP, AP and RM) are set to continue the boom but at the same time, we are also very cautious:
 
– The Fed Reserve’s hawkish in their stance to combat the inflation this year. Money is supply is draining at both sides (by the monetary policies as well as the rising commodity costs).
 
– War in Ukraine is casting a cloud of uncertainty in the wider economy and creating chaos in the commodity markets.
 
– There always concern on the 2 largest watch market: USA and China (USA’s rising interest rates and high inflation; China’s property market and COVID19 lockdown)
 
– Resuming of leisure travel and people spending money on travel again, cutting back on buying luxury goods and watches in their local resale market.
 
While there are still factors sustaining the demands of luxury watches:
– GST increasing to 9% in 2023. This drives an increase buying in latter half of 2022, before the tax hike in Singapore.
– People assuming that only way to combat inflation is to continue to buy assets. (But buying asset at inflated price normally does more harm than good)
 
 
Patek Philippe Nautilus and Aquanaut prices shot up after the December 2021 Philips Auction

What we ought to do?

As always, we urged everyone not to put all the eggs into same basket. While we can more or less say watches are an asset class that can provide a hedge against inflation, but the truth is very trend-driven. Keeping an overly hype-upped watch is as dangerously as keep a speculative stock. Trends come and go, inflation is 5% a year, watch price can easily drop more if they are out favor. Even the incredibly hot Rolex SS Daytona 116500LN already fell more than 5% over the past month. This is equivalent to more than a year worth of inflation. So the more we to review our existing collections and offload watches that we don’t wear from time to time. After all, we have a good reason why we are not wearing some of these watches in our collections. This is good way to trim our collection and free up capital for new purchases. It is also necessary to take profit from watches should price become too attractive, after all we want both enjoy wearing watches and at the same time realizing capital gains whenever it is possible.
Rolex 116500LN

Brands in prospective:

Rolex:

Rolex watches have performed very well in the past 9 -12months. No major discon models this year for us to be excited: Air-king 116900 and Deepsea 126660 gotten upgrading and these models should see a price drop slightly as a result. We are looking to a price correction of about 10-25% for the popular SS Daytona, Submariners and GMT Master 2 since they are really overpriced. The supply will continue to be limited and costly since ADs are still sticking to bundle deals strategy, this will help to support the price from crashing. 5-digits model will continue to be the safe haven; their price movement will not be as volatile as the ceramic models they can be a safe hedge to inflation.
 
 
Discontinued in 2022 Rolex OP41’s Light Blue, Red and yellow
 

Patek Philippe (PP):

What a year for Patek Philippe Nautilus and Aquanaut, some of these are now worth than grand complication watches. This is undesirable because PP will not want Nautilus to be as famous as the brand, but ironically it is Nautilus and Aquanaut that make PP relevant in today collector’s market. PP shrewd move to discontinuation of the popular model 5711/1A, but yet releasing the immaculate end-of-production models (5711/1A-014, 5711/1300A-001 (green dial) and Tiffany & Co 5711/1A-018) had sent collectors into pure ecstasy. This caused a crazy demand for the sports PP and caused them to be traded at the intoxicated prices now. We noticed Patek Philippe perhaps are changing strategy on the sports models they haven’t launch the new models Nautilus during the Watch & Wonders this week. I suspect this is to give the industry a chance to focus on the new (non-Nautilus) offerings. They can simply do a soft launch for Nautilus and Aquanaut on a later date. We are concerned with excessive valuations of Nautilus and Aquanaut; it is possible they will correct 20-30% from the peak prices over the course this year.
 
 
Discontinued in 2022 Patek Philippe Nautilus Travel Time Chronograph Ref. 5990/1A-001

Audemars Piguet (AP)

Much anticipation on AP Royal Oak’s 50th Anniversary fizzles late last year. To make matter worse, they re-launch RO ultra thin as 16202, with practically the same look. Perhaps it is Patek Philippe who decided to gate crash Royal Oak 50th birthday with the Tiff & Co limited edition 5711/1A; whether it is pure coincidental or deliberate, it certainly shows that Patek can easily beat AP at their own game. The master of hype (AP is known for their mastery in using color and limited editions) was clearly beaten by a simple stroke of genius from PP. Still this isn’t the end game for the ROs, in fact this is a start of the new gen of RO that set to define and be the benchmark for mechanical sports for decades to come.
 
 
Audemars Piguet celebrating 50th Anniversary. Jumbo 15202 is replaced by 16202

What have Les Precision been doing:

Looking back over the past 6 months: regrettably we under-invested in Rolex, instead we opted to keep a lighter portfolio of Rolex (mainly the submariners and Seadwellers. Consequently, we missed out the large gains of the Daytona or GMT. Some readers will recall that we are already guarding against these red hot Rolex models, so we can never deviate and make exceptions in this period. Deviations can really hurts in the world of investments. However, we did well with PP Nautilus during this period. These Nautilus watches were added in the late 2021 was promptly cash out in Jan-Feb. We are preferring to hold larger cash and fixed income position (interest is going up, yield will increases). Although we feel the Big 4 (R, PP, AP & RM) are overpriced, but a crash of prices seems very unlikely. We will monitor for next 6month before whether to make substantial bets. It is still a lesser evil to keep cash: remember we don’t need to be investing all the time. If there is nothing worth buying, we don’t buy/invest. Inflation is bad, but it is a lesser evil comparing to overly priced assets – the latter can kills your wealth if it crash.
5712/1A (and 3712/1A) build around the Caliber 240 oldest Nautilus model in production

Watch buying guide 2022

Time of the year to look what’s worth buying.
(Note I using grey market resale price, not following RRP)
Les Précision recommendation:

$0-999

– Swatch Automatic
– Casio G-Shock
– Seiko automatic
– Seiko Diver watches
 

$1000-$4999

– Tudor models
– Azimuth models
– Omega Seamaster older models
– Omega Speedmaster older models
– IWC Pilot Mark VIII etc.
– Rolex Oysterdate 6694
– Panerai PAM 0000, 0005
– Bell & Ross models
– Tag Heuer Monaco
Tudor Black Bay Chronograph

$5000-$9999

– Omega Speedmaster Moonwatch
– Omega Seamaster 007 Limited editions
– Tudor BB chronograph
– Rolex DateJust 36mm 16233 16234
– Panerai PAM112, PAM104
– Hublot Fusion
– IWC Portugieser
– IWC Big Pilot
– Chopard Mille Miglia
– Cartier Santos 100 XL
– Grand Seiko
 

$10000-15000

– Chopard L.U.C models
– Rolex Explorer 124270
– Rolex Explorer 39mm 214270
– Rolex Explorer 2 16570
– Rolex Sea Dweller 16600
– Rolex Submariner 14060m, 16610,
– Rolex Milgauss 116400GV
– Rolex Explorer 214270
– Rolex DeepSea 116660 (Black)
– Hublot Big Bang, Unico
Rolex Explorer II 216570

$15000-20000

– Jaeger-LeCoultre Master Control Chronograph Calendar SS
– Rolex DeepSea 116660 (DeepBlue)
– Rolex Submariner No Date 124060 or 114060
– Rolex GMT 16710 or 116710LN
– Rolex Deepsea 126660 Black
– Chopard Alpine Eagle XL Chrono
– Bvlgari Octo Finissimo Automatic
Rolex Oyster Perpetual

$20000-30000

– Rolex Submariner Green 16610LV(discon) or 116610LV
– Rolex Submariner 126610LN
– Rolex Sea Dweller 116600
– Rolex DeepSea James Cameroon 126660
– AP Offshore Drivers
– AP Offshore Black Themes or Volcano (older generation)
– AP Royal Oak Offshore Bumble Bee
– AP Royal Oak 15500ST or 15400ST
– IWC Perpetual Calendar
– Vacheron Constantin Fiftysix day-date Stainless Steel
Rolex Submariner 126610LV “Starbucks”
Rolex Submariner 116610LV “Hulk”

$30000-50000

– Omega Chronograph 42 mm “Silver Snoopy Award”
– Rolex Daytona 16520 (Zenith) or 116520
– Rolex Submariner Green 116610LV (Hulk) 126610LV (Statbucks)
– Rolex GMT 126710BLRO (Pepsi)
– Cartier Santos Skeleton Large 40mm
– A.Lange & Söhne Grand Lange 1 Moonphase
– AP Royal Oak 15300ST, 15400ST, 15500ST
– Patek Philippe Annual Calendar 5146, 5396
– Vacheron Constantin Overseas Chronograph or Dual time
Rolex Daytona 116500LN

$50000-$100000

– Patek Philippe Aquanaut 5167A
– AP Royal Oak 15300ST Blue
– AP Royal Oak 15500ST or 15400ST
– Rolex Submariner 116619LB
– Rolex Daytona 116508 or 116509
– Rolex Platinum Day-Date2 41mm 218238
– Rolex DayDate 36mm Turquoise dial 128238
– Patek Philippe 5070J, 5070G, 5070R
– A.Lange & Söhne Odysseus Stainless Steel Blue
– A.Lange & Söhne Platinum Datograph
– Hublot Spirit of Big Bang Sapphire
– Ulysse Nardin Freak
Rolex Daytona 116509 Metorite
Rolex DayDate 36mm Turquoise dial 128238

$100000-$250000

– Rolex Platinum Daytona 116506
– AP Royal Oak 15202ST ultra thin
– AP Royal oak perpetual calendar 26574ST or Equation of time;
– Hublot Takashi Murakami models
– Patek Philippe Nautilus 5712/1A, 5711/1A, 5712R
– Patek Philippe Aquanaut 5168G; 5164A, 5164R travel time
– Patek Philippe Nautilus 5980/1A, 5980/1R, 5726/1A
– Patek Philippe World Time 175th 5575
– Patek Philippe World Time enamel dial 5131R/J/G
– Patek Philippe 5970J 5970R 5970G Grande complications
– Patek Philippe Nautilus 3711/1G, 3712/1A
– Watches independent watch makers: MB&F, F.P. Journe, Urwerk
– A. Lange & Söhne Lange 31
– A. Lange & Söhne Lange Zeitwerk Striking Time
– Jaeger-LeCoultre Master Grande Tradition Tourbillon Céleste
Patek Philippe Nautilus 5990/1A
Rolex Daytone 116508 ‘John Mayer”

$250000 and beyond

– Patek Philippe 5070P
– Patek Philippe 5004, 5970P Grande complications
– Patek Philippe Nautilus 5980/1R, 5990/1R
– Patek Philippe 6002G Sky-Moon Tourbillion
– Rolex Rainbow Daytona 116598RBOW, 116599RBOW, 116595RBOW
– Jaeger-LeCoultre Gyrotourbillon models
– Richard Mille models
– A.Lange & Söhne 1815 Tourbograph Perpetual “Pour le Mérite”
– AP Royal Oak Perpetual Calendar Openworked 26585CE.OO.1225CE.01
– Vacheron Constantin Traditionnelle Perpetual Calendar Skeketon
– Breguet Classique Double Tourbillon 5345 “Quai de I’Horlogue”
– Ulysse Nardin North Sea Minute Repeater
– Grand Complications from the independent watch makers: Philippe Dufour; MB&F, F.P. Journe, Greubel Forsey, Laurent Ferrier
 
Rolex GM-Master II 126755SARU
Rolex 116655SABR
This year’s recommendations are purely based on aesthetic and artisan merits (unlike the past where investment potential was the main considerations). I did include some newer models, which I feel are not iconic yet
Throughout 2021, the soaring resale prices for the iconic Rolex, RM, PP and AP continued, and because of these high valuations the investment potential in them had diminished (risk increases consequently and exponentially).
Hopefully with this list, I can offers alternatives and reintroduce some the technically sophisticated watches to community.
 
^Although designs can be evergreen, but no trend can last forever. If we want to do well in investment, we must stay ahead and look beyond those in-trend models.
 
^^ Again I had omitted the vintages watches from the list. For buyers with sophistication and taste for vintages, I feel they may not need a list like above. Also there are many pitfalls in the world of vintage, which is the reason why I will not recommend beginners or intermediate collectors to venture into the vintage Rolex or Patek Philippe.
 

Our plead: Please buy only what you like to wear. We all have a finite and limited budget for watches buying, always be mindful on every watch purchase. Buying a hot watches and posting on Instagram may feels great, but they all come with hefty price tags. Also investment will hit and missed, don’t let it take away the joy of this hobby. Finally do understand, there are definitely more important things in life. Invest sensibly and please don’t buy on impulse. Wishing everyone a healthy and safe 2022!

#rolex #Daytona #patekphilippe #patek #pateknautilus #nautilus #aquanaut #patekaquanaut #watchcollector #watch #investment #luxury #watchcollection #watchcollecting #gmt #submariner #Explorer #explorer2 #explorer2polar #2022 #2022planner #2022goals #newyear #AP #aproyaloak #aproyaloakoffshore #omega #tudor #JLC #alangesoehne #Chopard

Patek Philippe 3712/1A, 5712/1A

Luxury Watch Market update 2021 Fall/Winter

The Quantitative easing policies from the central banks had successfully averted a financial crisis in 2020. But with it came along the runway asset price and inflationary pressure, which partially explains the stellar performance of Rolex and Patek sports’ resale price over the past 18 months. There is no signs of slowing down in the watch prices. The disrupt of 2020 production of Swiss watches because of government enforced shutdown was another key reason. As we all know prices will go up if the supply is reduced, especially since there is no sign of waning demand during this period. Another of the observation from the 2020, are the reduction of the number of lower end watches sold. It could be the either the smart watches taking over the market shares and people preferring to concentrate on buying more upscale models, this trends is set to continue in 2021 and well into 2022:
– Polarization increase: Rolex (Tudor), Patek Philippe and Richard Mille dominates the respective price bands spectrum, with Audemars Piguet competing fiercely against Patek in the luxury sport category.
– Efforts by these above brands to curtail the flow of watches into grey markets, resulting bundles deals and customers force the keep the watches period before it is “safe” to resale. This “lock-up” period cos the resale market to dried up further, driving prices further up. The more the intervention, the trickier the situation gets. We can no longer walk in to a Rolex to view various models and decide the next purchase, because of empty display cabinets, instead we are presented on a bundle deal plan on how to get the desired watch (if we know the sales staff well enough).
What might happen?
 
Rolex Daytona 116506 in Platinum
The boom luxury market is set to continue but at the same time, we are also throwing some caution into the wind.
– the Fed Reserve indicated in the latest meeting that they are looking into reducing the stimulus and a possibility of an interest hike in the early 2022, to combat the inflation concern. This signal the start of the end of cheap borrowings. Assets valuations are fuel buy cheap loans, the song might come to an ending soon.
– Tech sectors other industries facing reality checks lately. We discussed previously: the boom in the shares market is not necessarily a clear indicative of the situation in the wider economy. There might have corrections if US and China both don’t manage their issues accordingly. (e.g US treasury budget, debt ceiling or inflation); China property market)
While there are still factors sustaining the demands of luxury watches:
– GST increasing to 9% in 2023? This drive an increase buying in 2022, before the tax hike in Singapore.
– Covid still preventing travel or other leisure pursuits; recreational budget for many people channel to buying luxury goods and watches.
Patek Philippe Nautilus 5712/1A and 3712/1A (centre)
What we ought to do?
As always, we urged everyone not to put all the eggs into same basket. While we can more or less say watches are investment tools and a likely hedge against inflation. It is still trend-driven; trends come and go. We should continue to review our holdings and replace watches within our collection from time to time. After all, our personal taste change too; so is our purchasing power. Selling off the watches we don’t wear is good way to streamline our collection, at the same time free up capital to fund for new purchases. It is a hobby that will give us capital gains if we manage it well.
Rolex Daytona 116508 “John Mayer” in yellow gold
Brands in prospective:
Rolex watch in generally has preformed very well in 2021 especially the Daytona watches and focus is now on the Platinum 116506, the first ceramic Daytona. Submariners, GMT and also on the rise as the supply continue to be limited going into 2022. Although the hype in Explorer and Explorer 2 ended with much disappointment, the price still well above the pre-Covid period. Yachtmaster 1 will see a face-lift soon and ceramic bezel for the SS model should be inaugurated within the next few years.
Rolex Submariner 126613LB
 
Patek Philippe:
What a year for Patek Philippe Nautilus and Aquanaut, some of these men’s model had appreciated 50%-100%. This trend seem to be continuing, there just not enough of Nautilus or Aquanaut to go around. As I mentioned earlier, efforts by Patek to curtail the resale market, including announcing the discontinuation of the super popular model 5711/1A backfired spectacularly. End or production models 5711/1A-014 and 5711/1300A-001 (green dial) traded at half a million price range 10x the recommended retail price. This really give a sense of desperation and greed (speculation aspect) that had driven the watch market of late. 5712/1A also under our spot-light as the possibility of Patek Philippe changing strategy on the sports models, small thin models giving way to large chunky models like 5726 or 5990. It is possible 5712 to be discontinued since it is now the oldest 30th Anniversary model (launched in 2006). We also wondering if 5167 (40mm) will be making way to 5168 (42mm) within the next few years.
Keeping Patek Philippe watches in original factory seal for better price appreciation. These seal watches performed significantly better in a auctions as compare to those worn ones.
Audemars Piguet
All eyes on AP Royal Oak’s 50th Anniversary in 2022. They already announced the current RO ultra thin 15202 to be discontinued, hence causing a the resale price to surge. 15202 has been the flagship model for AP and it is the direct descendent of the original Gerald Genta RO Jumbo 5402. It still using the original movement design till now. Such a significant model, it is a watch purist dream and it is unsurprising that the price of 15202 had doubled. ROs like 15500/15400/15400 and complicated ROs also see very substantial price increase.
Audemars Piguet Royal Oak ultra thin 14802BA Jubilee Edition in yellow gold. Circa 1992
What have Les Precision been doing:
Over the past 6 months or so, we have disinvested most of the Rolex. We fully exited from 116710LNs completely and some other submariner and dive watch models. We profit take on some of the 116600s. 116600 been our long term investment and we still feel it is worth holding to it. We did buy in Nautilus during this period adding 5712 to the 3712s. 5712 might the next to be discontinued right after 5711. Compare to 2020 we are actually holding to much higher cash (or fixed income) position, this is inline with our strategy of risk management against price fallout.
Since the announcement of discontinuation in the 2021, Audemars Piguet Royal Oak Ultra Thin 15202ST saw the resale price more than doubled

Watch market update 2021 Spring/Summer

As the world as yet hit by another wave of COVID inflection, the uncertainty about the effectiveness of vaccine grew. The virus might have found a way around the vaccine. Optimism may have faded; the situation will surely delay the normalization of our lives.
(Previous review)
 
 
PATEK PHILIPPE NAUTILUS 5712/1A TIFFANY & Co, co-branding watches enjoy successes at auctions

The Overviews

Covid pandemic did not bring down world’s economy, it simply upset the balance. Newer industries thrive, those that cannot adapt crumble and fail. It permanently changed the way we work and live, it is changes the way we spend. Rich and poor gap widens, it is about the HAVE and the HAVE-NOT. Those with assets get richer, those without fallen further behind.

– Similar for watch owners, those who owned sports Rolex, sports Patek Philippe (PP), Richard Mille (RM) benefitted as the prices soared; those who didn’t have to spend 40-50% more money to by a Nautilus or Daytona.

– Social media at work. There is an increasing trend of social media influencing the watch market. It is definitely true we are spend more time on social media now, and we do listen to bloggers or influencer when doing our research on the next watch purchase. This unfortunately leads to certain amount of unnecessary speculation. A good example was the circulation of rumors about a certain Daytona getting discon, which caused the grey market price shoot up 50% in just 2 weeks, right before Rolex announced the 2021 novelties.

– Watches as investment and keeper of wealth: More and more people realized inflation is real and asset like watches can be a good hedge. It also during the pandemic, that Rolex/PP/RM prices surged to an unprecedented level. There is just too much liquidity injected, but unfortunately was disproportionately distributed. At the same time we realized because unlike most other asset classes, watch can be worn and flaunt. But what really appeals the masses is that sustained value increment, which ultimately convinced most people to park their cash into watches.

– Dominance by a handful of brands: We have this situation of people flocking to the “blue chip” watches, the sports Rolex, PP etc. Other brands have to cut back on the production so as not to oversupply the market preventing the over inventories. This is evident of the sales figures Rolex/Tudor now surpass Swatch group as the largest watch company.

 
 
ROLEX DAYTONA 116508

What’s likely to happen?

Supply of watches are not going to be increase until next year, COVID already disrupted the production and the supply chain. Prices are likely to be more volatile as on social media exert its influence and watches are now subjected to speculations. Speculation is evident as some Daytona models surged 20-40% within 2 weeks prior to the release of 2021 models on April 7th.

Trend towards precious metal is likely to continue as long as prices for steel Rolex/PP remain sky high. There are still many collectors flush with cash and waiting to purchase and sports model. High premium in steel models is a huge turn off for them; Gold watch sports model can be a good alternative, from the value stand point.

It is also common to see individual increasing the amount cash park in watches as asset. Nowadays it is likely to hear collectors claiming that they hold 5-10x more value in watches, as compare to a decade ago. This possible due to the sheer cost of watches nowadays; and at the same time, average number of watches in an individual’s collections also increased. This shift can only be attributed to everyone faith’s in Rolex, RM or PP ability to hold value and beating the inflation.

However, everyone will still have to be mindful during each purchase. Also do watch out for illiquid watches being bundle with you key purchase. Sometimes it is more worthwhile to pay premium rather than having a fortune stucked in unsellable pieces.

PATEK PHILIPPE 5070G

Key Brands:

Rolex: The 2021 Novelties are somewhat disappointing. Downsizing the Explorer, in our humble opinion, is a key move to capture the ladies market rather than that of a purist approach. More and more women are spotted wearing the professional Rolex models and this huge market that none of the major Brands can ignore. As for the overall grey market price trend it will be stable. But models like GMT or Submariner might increase slightly as they become good alternatives to Daytona, which can now be a little unassailable now. Demand for full gold watch models are also on the increase as we loathed the stainless steel pricing.

Patek Phillipe: the discontinuation of Nautilus 5711/1A-010 (blue dial) and replacing by the final year run of 5711/1A-014 (green dial) this spring is a notable development. Surely Patek Philippe is having a problem; they don’t want Nautilus to overshadow the entire brand, like how Royal Oak had became greater than the brand itself. Curiously, Patek Phillipe is choosing to end the 5711 reference by 2022, the 50th anniversary of the AP Royal Oak (RO). The rival already announced an anniversary RO “Jumbo” model will be dish out next year. Curiously, PP’s decision to pull out their very own “Jumbo” model, will means they are gracious to allow AP to have a free hand to this segment of the market. PP perhaps have intent to relanuch a newer model for the Jumbo Nautilus (6711?) next year or perhaps they are looking to upsize the entire Nautilus collection to likes of 5980, 5990 or 5726.

 
 
Now discontinued ROLEX EXPLORER 2 216570

What we ought to do?

The strong demand for watches is set to slow down somewhat, but we do not expect the price to fall badly. But as the pandemic prolonged, consumers with deep pockets will still continue to spend on luxury and asset like watches as safe-haven.

Although we are still preaching on having a healthy cash position, but the same time we are on the lookout for good value investments like the undervalue 5digits Rolex models. The 5digits are defensive play: These contemporary Rolex are the “floor” of the sports Rolex, or we call them the entry level models and the price are stable and move up steadily. Complicated Patek Phillipe watches seem good value against the against the Rolex/PP sports watches, it can be a good alternatives for wearer. They are overlooked and there are gems waiting to be uncovered.

While we do not see an imminent fall in prices of Rolex & Patek Phillipe sports watches, but we always feel they are fully priced and upside will be limited. Till today this fear had proven to be unfounded. However, we should always adopt “enter at your own risk” approach. We too must prepare for price volatility, as news or rumor of discontinued of certain sports Rolex will surely weigh in on the prices.

For investment over a mid – longer term horizon, we might want to look at contemporary (discon) PP Nautilus models like 3710, 3700, 3711, 3712 etc, despite of current pricing, they yet to achieve the valuations that they deserved.

PATEK PHILIPPE 5712/1A and it predecessor 3712/1A
Les Precision update:
It is still a “hold” for the Nautilus pieces awhile we awaits the fate of the 5712/1A in 2022. We already disposed off the 116619LBs after the capital gains in Sept 2020. Also at the same time significantly reducing holding of GMT2 116710LN as well as other SS Rolex sports. So reducing our exposure but at the same time look out of good value 5 digits models as we still feel they are lagged in price and undervalue. However, the 5 digits ref. Rolex are only for those who prefer a mid to longer term investment, they will take a longer time to meet the price target. But we do view them as safe-haven so to speak.
 
Look out for short production models as a keeper, Photo: Rolex SeaDweller 116600 (2014-2017)

Disclaimer:

* Do note that “prices” we refer to in this article are referencing from the grey market. Sports Rolex, RM, AP Royal Oak and PP Nautilus or Aquanaut prices can be very volatile recently. Any reference to the price and value is only valid at the point of writing.
* We are not affiliated to any brands, neither do we received any advertisement money. This is purely written out of individual views and standpoint, we do not take responsibility of any losses result from the actions taken according the information or views published above.
* This article is written based on the current world and financial situation; CONVID situation can change or deteriorate. We will also disclaim against the other possibilities of disruptions to the economy like for example trade wars, natural disaster or oil/energy supply shock.
#rolex #patek #lesprecision #marketreview
Keeping complete set will enhance the resale value

Watch buying guide for 2021

Our Traditional time of the year to look what’s worth buying.
(Note: I using grey market resale price, not necessarily I will follow RRP)
Les Précision recommendation:
 
$0-999
– Swatch Sistem51
– Casio G-Shock
– Seiko automatic
– Seiko Diver watches
 
$1000-$4999
– Tudor models
– Azimuth models
– Omega Seamaster past 007 Limited editions
– Omega 3570.50.00 Moonwatch
– IWC Pilot Mark VIII etc.
– Panerai PAM 0000, 0005
– Bell & Ross models
– Tag Heuer Monaco
Omega Moon Watch 3570.50.00 discontinued in 2015
$5000-$9999
– Omega Limited Edition Speedmaster Moonwatch
– Panerai PAM112, PAM104
– Hublot Fusion
– IWC Portugieser
– IWC Big Pilot
– Chopard Mille Miglia
– Cartier Santos 100 XL
– Rolex Explorer 114270, 214270
– Rolex Explorer 214270
 
$10000-15000
– Rolex Explorer 2 16570
– Rolex Sea Dweller 16600
– Rolex Submariner 14060m, 16610, 124060 or 114060
– Rolex Milgauss 116400GV
– Rolex Explorer 214270
– Rolex DeepSea 116660 (Black)
– Hublot Big Bang, Unico
 
 
Rolex Milgauss 116400GV
$15000-20000
– Jaeger-LeCoultre Master Control Chronograph Calendar SS
– Rolex Submariner 126610LN
– Rolex DeepSea 116660 (DeepBlue)
– Rolex GMT 16710 or 116710LN
– Rolex Sea Dweller 116600
– Chopard Alpine Eagle XL Chrono
– AP Offshore Black Themes or Volcano (older generation)
 
$20000-30000
– Rolex Submariner Green 16610LV(discon) or 116610LV
– Rolex GMT 116710BLNR (batman)
– Rolex DeepSea James Cameroon 126660
– AP Offshore Drivers
– AP Royal Oak Offshore Bumble Bee
– Rolex Daytona 116520
– Rolex GMT 126710BLRO
– AP Royal Oak 15500ST or 15400ST (discon)
– IWC Perpetual Calendar
– Vacheron Constantin Fiftysix day-date Stainless Steel
 
 
Audermars Piguet Offshore 42mm “Volcano”
$30000-50000
– Patek Philippe Aquanaut 5167A
– AP Royal Oak 15300ST Blue
– AP Royal Oak 15500ST or 15400ST
– Rolex Submariner 116619LB
– Rolex Daytona 16520 (Zenith)
– A.Lange & Söhne Grand Lange 1 Moonphase
– AP Royal Oak 15300ST, 15400ST, 15500ST
– Patek Philippe Annual Calendar 5146, 5396
– Vacheron Constantin Overseas Chronograph or Dual time
 
$50000-$100000
– Patek Philippe Nautilus 5712/1A, 5711/1A, 5712R
– Patek Philippe Aquanaut 5168G; 5164A, 5164R travel time
– Rolex Platinum Daytona 116506
– Rolex Platinum Day-Date2 41mm 218238
– AP Royal oak perpetual calendar 26574ST or Equation of time;
– Patek Philippe 5070J, 5070G, 5070R
– A.Lange & Söhne Odysseus Stainless Steel Blue
– A.Lange & Söhne Platinum Datograph
– Hublot Spirit Of Big Bang Sapphire
– AP Royal Oak 15202ST ultra thin
– Ulysse Nardin Freak
Patek Philippe Nautilus 3712/1A (left) & 5712/1A (centre, right)
$100000-$250000
– Patek Philippe 5070P
– Patek Philippe Nautilus 5980/1A, 5980/1R, 5726/1A
– Patek Philippe World Time 175th 5575
– Patek Philippe World Time enamel dial 5131R/J/G
– Richard Mille RM011
– Patek Philippe 5970J 5970R 5970G Grande complications
– Patek Philippe Nautilus 3711/1G, 3712/1A (discon)
– Watches independent watch makers: MB&F, F.P. Journe, Urwerk
– A. Lange & Söhne Lange 31
– A. Lange & Söhne Lange Zeitwerk Striking Time
– Jaeger-LeCoultre Master Grande Tradition Tourbillon Céleste
 
$250000 and beyond
– Patek Philippe 5004, 5970P Grande complications;
– Patek Philippe 6002G Sky-moon tourbillion
– Rolex Rainbow Daytona and other all diamonds sports Rolex
– Jaeger-LeCoultre Gyrotourbillon models
– Richard Mille models
– A.Lange & Söhne 1815 Tourbograph Perpetual “ Pour le Mérite”
– AP Royal Oak Perpetual Calendar Openworked 26585CE.OO.1225CE.01
– Vacheron Constantin Traditionnelle Perpetual Calendar Skeketon
– Breguet Classique Double Tourbillon 5345 “Quai de I’Horlogue”
– Ulysse Nardin North Sea Minute Repeater
– Grand Complications independent watch makers: Philippe Dufour; MB&F, F.P. Journe, Greubel Forsey, Laurent Ferrier
Dial Details of Patek Philippe Grand Complications 5970/1P
For 2021 I had decided to broaden the list to include many newer models, as what I perceived as icon in the making. I also include some already iconic design, but just that I excluded them in the past because of lack of investment potential. 2017-2020 basically were the years that sports model from PP, Rolex and AP took all the attention and their prices soared, and because of these high valuations the investment potential in them had diminished.
Hopefully with this extended list, I can offers alternatives and reintroduce some the technically sophisticated watches to community. Although designs can be evergreen, but no trend can last forever. If we want to do well in investment, we must stay ahead and look beyond those in-trend models.
^^ Again I had omitted the vintages watches from the list. For buyers with sophistication and taste for vintages, I feel they might not need a list like above. Also there are many pitfalls in the world of vintage, which is the reason why I will not recommend beginners or intermediate collectors to venture into the vintage Rolex or Patek Philippe.
Our plead: Please buy only what you like to wear. We all have a finite and limited budget for watches buying, always be mindful on every watch purchase. Buying a hot watches and posting on Instagram may feels great, but they all come with hefty price tags. Also investment will hit and missed, don’t let it take away the joy of this hobby. Finally do understand, there are definitely more important things in life. Invest sensibly and please don’t buy on impulse. Wishing everyone a healthy and safe 2021!

Review: ROLEX OYSTER PERPETUAL 41 ref:124300

4 most popular colors of the Oyster Perpetual Ref 124300
Quite a surprise that Rolex launched these color candies this year, the ref: 124300. Beside the lovely color selections, let’s see what’s new about the watch. The watch enthusiasts will notice the indices at 3, 6 and 9 o’clock are now double stick indices.
The Rolex crown logo at the watch clasp is also changed in the form of engraving, rather than a pop up crown.
Other spec:
– water-resistant to 100 metres
– new calibre 3230. An automatic movement with 70 hours of power reserve.
– Like all other Rolex watches they COSC chronometer certification.
There seven dial colours for the 41mm OP are bright black, coral red, bright blue, turquoise blue, green, yellow and silver.
The price of the Rolex Oyster Perpetual 41 ref. 124300 is retailing at S$7,910.