I own a bit of LVMH (luxury conglomerate) shares and I find it fascinating what they manage to sell to people, but I'm determined never to fall for it.

This little assemblage of $500 in parts is worth far more to me than the $8,000 that it's ostensibly worth. It has been there with me for so many of the most important events in my life:

My wedding: https://www.flickr.com/photos/defender90/3763369152/in/album...

My newborn first child: https://www.flickr.com/photos/defender90/7515534464/in/album...

Epic Utah adventure with my best friends: http://farm8.staticflickr.com/7247/7087962645_3d48ebb50b_z.j...

Filthy from the craziest day where we drove 250 miles of rough off-road trail in one day in the Owyhee Desert of Northern Nevada: https://www.flickr.com/photos/defender90/20220695396/in/albu...

Nah, my emotions work differently, and for physical objects I prefer stuff that is easily replaceable.

Also I'm pretty much Scrooge McDuck.

Btw, you should start a blog!

I don't blog much but I have done a few stories for Expedition Portal:

http://expeditionportal.com/expedition-journal-the-owhyee-de...

Here's the story of importing the truck:

http://www.expeditionportal.com/forum/threads/103685-Rocinan...

And a story about a Utah trip:

http://www.expeditionportal.com/forum/threads/111216-Utah-Ro...

Its a reference to the colonial days in the Caribbean. The folks who had money made if from agriculture and used the Land Rover to transport goods and traverse the rough terrain.

I do think there is something very cool about the engineering that goes into watches, and they are somewhat unique in the way they combine both engineering and more traditional artistry like hand finishing or enamel/lacquered dial work.

I should probably point out in case there is some confusion that I most certainly don't work for Rolex or the Swiss watch industry even though I sound somewhat like a shill in these comments.

Yes, I appreciate that, and I do too! Besides, at times I need to do some status signalling too. No disrespect intended.

I think you are being a bit harsh. You can get some perfectly fine mechanical watches at the 500 euro mark. Brands like Certina, Hamilton, Seiko and (to a lesser extent) Victorinox have several models in that price range which are perfectly well made.

For 3k you are either looking for something extremely fancy or you are already paying for 2k for the brand. Below a few brands, some very old, all of them use swiss made mechanical automatic movement. I don't remember having been in an airport and not having seen Rolex advertisement. But someone is paying for this advertisement. And again, if you buy from a dealer he may have something like a 100% mark up.

http://www.archimede-uhren.de/

https://shop.laco.de/

http://www.ebay.de/usr/erkahund

https://www.steinhartwatches.de

http://www.stowa.de

Here is an estimate of Rolex cost vs price and it is close what I suspected. " by gathering publicly available prices for similar products, we can estimate that the production cost of an average stainless steel Rolex watch retailing at USD 5,000 is less than USD 1,000. Maybe even less than USD 750."

https://www.quora.com/How-much-does-it-actually-cost-Rolex-t...

I don't say don't buy one. But understand that you pay 80% of the cost for the brand. If you need the brand, buy it. If you just like the mechanics you can get a very good watch for a tiny fraction of the price.

I have a Kazakh-American friend who did some contract work as a pipeline welder in Kazakhstan who told me all of the watch shop windows in Astana would empty out every time large oil/gas deals were being signed.

This segment of the luxury goods market is indeed very interesting.

Debatable, as it is a sports watch (arguably "the" sports watch). Wearing a sports watch with black tie suggests a middle class New Worlder. I happen to like these values (meritocracy, individual rights, equality of all before the law) much more than the alternative so see it as a positive signal. Also, (see [1]) signals ought to be true or the effect will be very negative, since nobody likes a fake, so better the sub with the "tuxedo" if that's "who you are".

The core value of a Rolex over other brands is two fold.

First, the company is ensuring that the value of the watches will never drop through limiting grey market availability and limiting supply generally even in the face of increasing global demand (people now complain about months-long waiting lists for special editions). As you point out this does make it a sort of global gold standard in terms of maintaining value and fungibility.

Second, it shrewdly invests in multi-generational, tightly integrated marketing to maintain the image of the brand in the global lower and middle classes' mind as "the" luxury watch, as well as in the target market (the GP piece is an example).

AFAIK it is the only brand that does it so thoroughly; Patek has similar operations (including bidding on its own vintage stuff, which even involved setting up a museum, to drive prices higher) but targeted at the aspirational upper middle class only [2], and the other brands are considerably less well recognised or not perceived as expensive. This investment in marketing builds "signal equity" for Rolex wearers in that everybody will see it, not just the readers of Hodinkee.

Which is why I disagree with you that:

> it doesn't scream "expensive"

To close on a humorous note: http://www.gq.com/story/male-engagement-ring-rolex

(I would, personally, blow my $50k on the new Laurent Ferrier Montre Ecole. /signalling)

[1] https://www.quora.com/Why-would-anyone-buy-a-Rolex-watch/ans...

[2] http://thelastpsychiatrist.com/2011/11/luxury_branding_the_f...

Rolex sells almost a million watches a year now. It's a brand bought by rich, knowledgeable watch nerds as well as plebeian, flashy status-seekers and everyone in between. Rolex are given as gifts often enough whether from family or from your old fat boss for you being the best salesman in the district. And by now in 2017, many ppl are wearing Rolex watches they inherited as the company has been big for well over a generation of customers. In short, a Rolex doesn't signal anything discernible that can be generalized. Ya there are a small % of people who will see it and recognize it and think its expensive, but it is not screaming expensive, it's not screaming anything. Reasons for buying or having or wearing a Rolex may vary but its just a watch now.

Also, a sports watch or any watch with a tuxedo? You're at a party, and hopefully drunk, I would say leave any watch at home. But that's debatable too, so do whatever the fuck you want, assumptions will be made incorrectly regardless. Cheers :)

You're disagreeing with yourself and agreeing with him. His point (I think) is that they adopted a marketing and pricing strategy which promoted brand awareness and maintained brand equity to both the "lower classes", and to the "upper classes" and also to watch enthusiasts, simultaneously.

That is to say, poorer people might recognise Rolexes as being something special, and might strive to buy one, but wealthier people also see it as something special and strive to buy one. And the fact that poorer people can get them doesn't dilute their positioning for wealthier demographics. Or as you put it..."It's a brand bought by rich, knowledgeable watch nerds as well as plebeian, flashy status-seekers and everyone in between."

And I completely disagree with your first statement. I would imagine that almost every adult recognises the Rolex brand. Sure, people might not recognise a Submariner from a distance as being a Rolex, or a Rolex design, but everybody knows the name. Whereas, on the other hand, almost nobody would even know the name Philippe Patek. But then, that's their marketing strategy.

Anyway this is just my experience. Rolex don't "scream expensive", but maybe to a few folks they burp that message. Not a perfect comparison but my old well-worn running shoes cost like $200 (fancy I know ;) few people recognize them, from the ppl who do some think that's expensive ($5 of leather for $200 ZOMG!), some people don't think that's expensive. Just because something is expensive doesn't mean that product "screams" expensive. Just shoes. Just a watch. YMMV

And I completely disagree with your statement. If you are at least a bit into the watches, you know Patek very well.

The part about everybody-recognizes-rolex - well that ain't true either. Over 90% of blue collar workers would see some bigger watch, that's it. Most of my colleagues wouldn't recognize them, and I am talking about private bank in Geneva, home of Rolex (and Patek).

On the other hand, Rolex is literally one of the most recognised and reputable brands in the world. There are companies which track this stuff, and every study ranks them within top 100 in the world for brand equity, recognition, reputation, etc among general consumers. Just with a cursory look now, I see one study from 2014 which ranks them second in the world, only behind Disney:

http://www.forbes.com/sites/arieladams/2014/04/14/why-rolex-...

Don't forget, they sponsor a lot of stuff. You can't watch sports without seeing their logo everywhere. As I said, people wouldn't recognise a Rolex watch...but the brand, yeah.

I'd be extremely surprised if 90% of people in a bank in Switzerland don't know of the brand Rolex.

Rolex + Tuxedo is the look popularised by the James Bond films to the extent that it has taken on a life of its own now.

In other words much of today's target market did not see Bond wear a Rolex in cinemas, and it is a testimony to the strength of Rolex's brand that Omega's own product placement has been hijacked in people's minds.

[1] http://www.jamesbondwatches.com/the-list-eon-movies.htm

Other than that, I agree with your sentiment. I own a couple of Longines and they're masterpieces of engineering. But they're a bit more discreet than Rolexes :)

There's a more recent comparison video of him driving an Aston Martin, a more expensive and arguably much nicer car, but because it's silver nobody gives a shit.

Unless you are truly flashy (red Ferrari, diamond watch) typically nobody will notice. And to the Rolex point specifically, there are more non-Rolex watches that look nearly identical to the Submariner than there are actual Submariners.

A friend of mine has what I thought for years was a Pepsi bezel GMT II. I caught a better look at it randomly and it turns out it's a Seiko.

Protip guys: vanishingly few ladies want someone with a nice car (and all that comes with).

for the same reason, I wear modest watches to client pitches. too pricey they'll assume we are making out better than them and thus we won't be enforcing the "clients first" mantra. The same also goes for hotels. When I travel to clients and they ask where I am staying, I'd be a fool to say the "Four Seasons". If you stay at the Marriott, they assume you product is priced fairly.

Of course, when I go to a meeting I'm aware that perception matters, and in certain contexts there's a good chance I'm going to meet somebody wearing a nice watch who might make judgement about me based on what I'm wearing (human nature sucks sometimes). So I'm not going to turn up for a pitch wearing one of my Seikos (even though I love them) because they're probably too affordable and, frankly, too casual (Orange Monster anyone?). What I need is something classy and relatively refined without being flashy or ostentatious. Eventually, specifically to fulfil that role, I bought a used Omega Seamaster (which has become just about my favourite watch because it's so versatile).

I'd certainly think twice about wearing a Rolex for a pitch because there's always the risk it might make you look expensive, but I wouldn't think twice about wearing the same watch in a social context. Why? Because I love a good timepiece, and since none of my good friends are into watches they never notice what I'm wearing anyway, so I can get away with anything within reason. (Btw, I'm talking about stainless steel models here; if you're talking gold that is a different matter because just by its very nature it's attention grabbing.)

I would posit that any meeting you go to where you are trying to sell something perception matters.

Could be a good project if you could make headway

Well, who said it's unwanted?

Besides, they often have bodyguards, and of course they don't regularly mingle with commoners. Difficult to get robbed in some Swiss chalet or some expensive neighborhood. And there everybody has money anyway, so they don't stand out much.

People I know that say similar things (along with comments about inappropriate sizing of their parts to compensate for) usually never drove any sports car, so have no clue how much joy this seemingly tedious task can bring on. And if you can afford it, why not go for a better experience with <insert_your_activity> ?

http://paulgraham.com/submarine.html

On balance this is not true for any non limited brand new watch you buy. On balance models that appreciate tend to be discontinued, or a combination of rare reference/variation/materials.

I agree though, If I had a lot of cash laying about, i'd buy lots and lots of good examples of vintage watches from marquee brands.

He wears it every day it, to every occasion, and it looks phenomenal. Recently, had it appraised in the $5000 range. He's beat the S&P many times over, not to mention the value he's received of having a nice watch every day.

Yea I get, it's not for everyone. But they're not the worst investments and they're truly beautiful machines. In the words of Ferris Bueller, 'if you have the means, I highly recommend picking one up.'

And for the super skeptical, here's a video of a man who bought a Rolex GMT Master in the 60s for $120 and had it appraised in the $80k range (despite decades of heavy use). https://www.youtube.com/watch?v=li0mRLcGbU8&feature=youtu.be

So your friend has a 25 year old Air King? This is not a vintage piece, it's just an old piece. Worth? $1500 - $2000 depending on condition. Secondly, in 25 years he had to service it at least 3 times. Each service cost? $400 - $800 depending on the issues. If he polished it, $500 more.

So all in he's put in $1,200 + ~$1,500 = $2,700.

Now had he place $1,200 in the S&P 500 on 1991 (exactly 25 years ago), he would have at the end of December 31 exactly $13,588 dollars (~9.78% on average per year).

I don't understand how you can say he beat the S&P many times over.

Same applies to rare luxury cars, real estate, etc.

Tudor is a Rolex sub brand that uses Rolex cases but swaps in more generic swiss movements. Less expensive servicing, especially since you don't need to send it to rolex, but all the Rolex quality on the outside.

[1] https://www.flickr.com/photos/defender90/4246326395/in/album...

At the time it struck me as really odd, but now that I know some people who own expensive watches I sort-of get it.

[0]: https://en.wikipedia.org/wiki/Homo_Faber_(novel)

Selling your watch for quick money (usually in a foreign country or after being robbed, crashed etc) is a common film staple in tons of adventure/noir etc movies.

"There are a few advantages to owning a Rolex that may not be so obvious: For starters, it's quickly exchangeable for a high percentage of its value in cash in virtually any major city in the world."

Please define "high". I have seen a Rolex sold for less than its value in gold (gold rolex).

They have sales tax (20% in Europe). The shop has likely something like a 100% mark up on a watch. Most of the costs of the Rolex are for advertisement. You can get a same quality watch for a tiny fraction of the price.

"Because you're always wearing it, that's $8,000+ in cash that you can have in short order if you needed it badly" If it is not made out of gold, I suspect you would get 1 or 2 grand for it. On a good day.

Precious metal rolexes don't hold their value nearly the same way as steel ones, since part of owning a gold rolex is the accomplishment of being able to buy it in the first place. They also come with a dizzying array of options, so if you want the right one you have to buy new. Sports rolexes have few options so they are interchangeable. Rolex has pulled off a neat trick of making them thought to be rare while selling nearly a million a year.

I find the latter nicer to be around overall.