With crypto freefalling, stocks going into the red, inflation (and frustration) on the rise, one could say that we have entered a bear market. I thought the pandemic would have put us there already, but it did more of the opposite. When the cases of Covid-19 first spiked and we entered a lockdown, I remember thinking that nobody would care about watches. It turned out that with everybody at home, interest in this topic was on the rise. As most could also work from home, the income of a significant number of people didn’t decline, while the disposable part of it rose as many costs were cut as travel was restricted.
So after a slight dip, mainly caused by the manufactures forced to be closed during the lockdown, watchmaking went stellar. New products couldn’t be produced fast enough and were one of the reasons that the pre-owned and vintage market exploded. That is a part I didn’t in particular enjoy, as it is nice to see things maintain or gain their value, but in quite a few cases, the increase was so enormous that some models have become virtually impossible for an increasing group of collectors to afford. Another downside is that when watches gain so much in value is that they are worn less and less, as it makes people more conscious.
So what will be the effect of the bear market? Typically, this would lower demand, allowing the market to cool off, but is this still typical? Many of the ‘laws’ of economics have already gone out of the window, as the pandemic made expected effects not happen or even work the other way around. The bear market might also have this effect on watches, as many might still think that they are a wise investment, giving them almost the same status as gold. The question is also if a recession is going to happen. That will also affect the watch market one way or another, but in which direction, I don’t even dare to guess, but as always time will tell.
What effects do you think the larger market might have on the watch industry? Let us know in the comments below!
From my point of view, as a lover of watches and a minor collector, I find the current watch market to be quite disillusioning: many watches I have admired for some years, although somewhat above my price range during that time, have now relatively suddenly become completely unaffordable.
What makes that situation worse is that it is not just because they are unique, all-time grail watches, or inherently costly, such as Richard Mille, or Patek tourbillons. Those I understand – extremely rare, artisanal, or extremely complex to manufacture, or made of very costly materials. Fascinating to read about, but not in the same financial universe as I am!
Instead, the current market, like a high tide, has lifted the prices of many previously easily-available, reasonably ordinary, relatively mass-produced watches to multiples of what they were worth beforehand – think of many Speedmasters, Calatravas, and Daytonas, not to mention a number of “entry-level” models such as Aquanauts, Submariners, and so on.
My own response has been to distance myself from thinking or reading about watches I was previously very interested in acquiring; actually putting them out of my mind – because what is the point of reading and researching and anticipating owning those which are currently totally beyond any expectation of being affordable.
Instead, I have been enjoying what I have – a number of which I could not afford to purchase at today’s prices – and making sure that they are properly insured! If I feel the urge for another watch, I look at the watches that I currently own, identify the ones which have also risen significantly in value, and think about which of those I would be willing to sell or trade to acquire the new one. Unfortunately, for the watch market at large, my decision is almost always to keep the one I already own!
I am looking forward to hearing from others about how they are responding to the current market prices, and whether they are becoming less connected to the hobby as well.
There are no concrete indicators how everything will react due to mass amounts of panicking,
irrational, moronic individuals of the 1% bracket.
Price of popular luxury watches will increase much more and faster than gold.
It’s not the pandemic that caused damage, but the reaction to the pandemic. Our focus should be on the effect the lockdowns had on the economy. The pandemic is neutral.