Key insights

• ⌚ Influence of pandemic-era stimulus and hype on luxury watch prices
• 🇨🇭 History of the Swiss watch industry, including the Quartz Crisis and the shift to high-end mechanical watches
• 📈 The rise of China and auction of rare watches led to an increase in luxury watch prices
• 💰 Expensive watches gained utility as a store of value and means of payment in certain parts of the world
• 🔗 Supply chain disruptions led to a drop in watch production, causing unprecedented demand and price hikes
• 💸 Dealers and flippers started selling watches when used prices were roughly 20% above RRP, leading to a decline in prices
• 📈 Interest rate hikes are leading to higher mortgage payments, affecting consumers' spending on luxury items like watches
• ⌚ Shifts in the luxury watch market, with women's increasing interest in mechanical watches and changes in demand for gold watches

Q&A

• What percentage of wealth do ultra high net worth individuals allocate to collectibles?

  Ultra high net worth individuals allocate around 6% of their assets to collectibles, which significantly underperform the stock market. However, despite the financial returns, it's reasonable to buy and enjoy collectibles if affordable.

• How are changing trends impacting the luxury watch and classic car markets?

  Changing trends are impacting the luxury watch market with more women showing interest in mechanical watches and younger buyers favoring newer classic cars, posing potential risks to collectors and investors.

• What are the reasons behind the decreasing demand for luxury watches?

  The decreasing demand for luxury watches is attributed to factors such as interest rate hikes, restrictions in China, increased watch production by brands leading to market saturation, a rise in watch theft-related crimes, and evolution of production by luxury watch brands.

• What led to the decline in luxury watch prices?

  The decline in luxury watch prices occurred when dealers and flippers started selling their hoarded watches, coinciding with the US Federal Reserve hiking interest rates and impacting inflation and borrowing costs for watch dealers.

• What historical events have shaped the Swiss watch industry?

  The Swiss watch industry has been shaped by the Quartz Crisis, which led to a shift to high-end mechanical watches.

• What factors influenced the spike in luxury watch prices and their perception as investments?

  The spike in luxury watch prices and their perception as investments were influenced by the influence of pandemic-era stimulus, the rise of China, the auction of rare watches, supply chain disruptions, increased wealth from lockdown savings, celebrity endorsements, and the perception of expensive watches as a store of value and means of payment in certain parts of the world.

• 00:00 Luxury watch prices spiked, leading to claims of them being new asset classes and investments, influenced by factors like pandemic-era stimulus and hype. Swiss watch industry history includes the Quartz Crisis, leading to a shift to high-end mechanical watches.
• 05:02 Brilliant offers new data science content for learners at all levels with a problem-solving approach. The rise of China and auction of rare watches contributed to the increase in luxury watch prices and their perception as an investment. Expensive watches gained utility as a store of value and means of payment in certain parts of the world. The pandemic caused a panic in the watch market.
• 09:59 The luxury watch market experienced a surge in demand due to supply chain disruptions, increased wealth from lockdown savings, and celebrity endorsements. This led to a peak in prices followed by a decline when dealers and flippers started selling their hoarded watches. The decline coincided with the US Federal Reserve hiking interest rates.
• 15:10 The demand for luxury watches is decreasing due to factors such as interest rate hikes, restrictions in China, and increased production by watch brands, leading to a market saturation. The rise in crime related to watch theft and the evolution of Rolex's production are notable developments.
• 20:09 Luxury watches and classic cars are experiencing shifts in their markets, with women showing more interest in mechanical watches and younger buyers favoring newer classic cars. The changing trends in these markets are impacting sales and prices, posing potential risks to collectors and investors.
• 24:55 The percentage of wealth held in non-financial assets varies by country. Ultra high net worth individuals allocate around 6% of their assets to collectibles, but collectibles significantly underperform the stock market. Despite the financial returns, it's reasonable to buy and enjoy collectibles if affordable.