"Rolexes flew off the shelves over the weekend after the Swiss franc's surprise appreciation last Thursday sent Singapore's luxury watch enthusiasts on a buying spree before retailers adjust their price tags."
Source: The Straits Times.
Today, a fellow blogger sent me a message:
"I read today that pple are rushing to buy Rolex and other Swiss watches, from a value point do u think it is worth to buy now?"
To be quite honest, the thought of buying a Rolex or two crossed my mind too after reading the news regarding the Swiss Franc last week.
I thought about it a bit more and decided that although the prices of brand new Swiss made watches are certainly going to be higher in future, I would be silly to lock up money in what is a consumption item that is likely to depreciate in value over time even though I might have a margin of safety buying at the pre-adjusted prices. I am very sure, therefore, that it won't be an investment.
Depreciate in value? Don't believe me? Go to shops that sell pre-owned Rolex and other atas Swiss watches to take a look. Most people have relatively short memories but we might want to be reminded that, during bad times, we might even be spoilt for choice in these shops.
Well, it seems that many people disagree with me, going by the newspaper report today. Mr. Market is always right. So, AK is the silly one.
Anyway, my reply:
"Watches are consumption items. We can buy pre-owned Rolex and other Swiss made watches at a fraction of what they would cost brand new.
"I know some people say that luxury watches are investments. Well, I believe that some luxury watches can be investments. These could be highly sought after limited production pieces from very exclusive brands.
"It is not a subject that I have the time or inclination to learn more about. So, I am quite happy to stick to what I know which is that given a choice, I would rather hoard gold and silver than luxury watches."
Since I am not an expert on the subject, I have "invited" an expert to give us his view:
"The Swiss watch market is especially sensitive to economic depressions, and finds itself always having to aim where new money is. This is because high-end wrist watches for the most part are a poor economic investment. You should buy them because you love them, because they are beautiful, and because you want to wear them. Not because you think they will hold or increase in value.
"As a professional talking head on watches I often get asked about investing in watches for profit. The idea that you’ll buy a watch and wait until it increases in value doesn’t made for good sense. Plus, historically it doesn’t happen often even with extremely rare watches. Of course this is not the universally the case, but if I was your investment adviser, I would say stick with watches for wearing not anticipating." Ariel Adams in Forbes.
Have you bought your Rolex yet?
Related post:
My vintage Rolex.
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