The crowd-favorite Cosmograph Ref. 116500 has been in a months-long slide from its peak in mid-March at around $48,500, down more than 16% to about $39,500 today, according to data from Watch Charts.
The decline of that particular referent, along with others in its family, is driving a wider drop in the brand’s performance on the secondary market, which is down more than 10% over the past three months, per Watch Charts.
An echo chamber supercharged demand for top-tier models
Similar drops are also happening to the two other Holy Grail watches that collectors flocked to during the pandemic: the Audemars Piguet Royal Oak and the Patek Philippe Nautilus.
“The watch world has, in the last couple of years, become kind of a big echo chamber in some ways,” WatchCharts founder Charles Tian told Insider.
Ultimately, this has created an extreme level of interest not just in the leading three brands, but also very specific individual models that are basically impossible to buy new in a store.
Altieri said his customers tend to have their eye on their 401k when considering a purchase, and stocks and bonds have both taken a beating in 2022.
A Goldman Sachs analysis found that the classic 60-40 portfolio — generally known to be the most conservative investing strategy balancing stocks and bonds — lost 17% in the first six months of this year, the biggest decline since 1932.
By those measures, the declining quarter for Daytona looks rather less bad, and more like a necessary correction of a market.
“While the level of growth in the secondary market since 2021 may be unsustainable, we believe that there is a strong baseline of value to be found in ‘investment-grade’ luxury watches,” Morgan Stanley analysts Edouard Aubin and Elena Mariani wrote in a research note.
What makes luxury watches a different asset from securities or crypto is the baseline of value established by enthusiast collectors across decades, Tian said. “Those people aren’t going to go away just because the market drops.”
A new generation of collectors is now figuring out a new balance between purely enjoying the horology and expecting a return on investment, he added.