the facts are in the headline news... for this past week
- US$6 trillion was wiped out in global markets
- US$6 trillion pumped in by governments did little to dent the massive selloff
the predictions are foreboding...
- unemployment.. loss of jobs and incomes & ability to pay off loans..
- negative equity situations for all collateralised loans... mortgages... margin calls
-
businesses will suffer.. exports dip further.. company closures..
business spending will fall.. cattle class travel, less excesses of the
recent boom times...
interestingly enough at the extreme of the
scale, the ultra high net worth are seemingly not so badly impacted or
stand to gain the most from this time... many still have loads of $$$
to spend it seems... and to buy near the bottom (if inclined). lets
see, there's
- strong bookings for the recently launched ferrari california in Asia...
- no significant decrease in sales in the higher-end luxury car marques...
- watches above the US$100k mark are still moving it seems...
but what about for those not sitting on huge treasure chests as a famine/winter approaches?
a definition of luxury
what
is perceived as 'luxury' varies depending on your personal
socio-economic standing at a point in time... it is the opposite of a
necessity and is typically an expense more for personal pleasure thats
there because of PERCEPTION,
utility not being the key buying consideration (eg you have arrived if
u get a merc, and you are a good dad if u have a patek to pass on to
your son) the luxury sector is also more susceptible to changes in
income being what it is.. luxury products are more expensive relative
to average prices of the same product... eg. you can buy a leather
alligator bag for a couple of hundred or low thousand if unbranded...
drop a Hermes, LV or Prada on it and the prices go a bit haywire... the
Hermes for eg. could be S$40-50k.
'stealth wealth'? sorry i don't subscribe to fashion dictates
apparently
'stealth wealth' is in and vulgar flashing of it is out...eg. don't
drive the loud orange lambo and head out in a more quieter bmw sedan...
don't wear that oversized Audemars Piguet Limited edition and wear a
humble omega speedy so if u got it, nows not the time to flaunt it,
it seems... but i have never cared for fashion n u shouldn't too.. buy
what is a classic to you and that should be wearable/usable regardless
of the fashion at the time...
brands and retailers are gonna take a hit
on
another note, i think many of the brands and retailers are slowly
realising the 2008 is not going to be anything like 2006 / 2007 which i
believe were banner years for many in the haute horlogerie industry...
the picture for 2009 is more bleak.
some advice then...
while
i have always told folks to buy what they love and enjoy the watches
they acquire, looking upon any rise in price of the watch in the
secondary market as an added benefit should the day come that they have
to sell it off...(that was a mouthful)...
if
you still intend to acquire and not put your $$$ to other uses, it is
also good to cater for some additional factors of consideration for
buying in these times...
1. buy only those that are special to you and that are hard(er) to come by
people
holding on to things they like may be forced to sell em and suddenly
you could acquire what was previously not on the market or that could
be obtained for closer to what you are willing to pay for it...
don't
buy a watch that is in regular production now if u can avoid it,
holding cash for other more important needs, as you could always buy it
later when times are better.
2. pre-owned will save u a chunk of change
as
list prices this year has seemingly defied all economic forecasts and
continued to see price increases through the year, which i think is not
very smart on the part of brands and retailers, the secondary market
will be the place to go watch hunting... especially if sellers are
desperate to offload pieces in full knowledge that its a buyers market,
u could pick up finds at good value...
last but not least... the other side of the coin...
if
you are thinking of selling, just be mindful that buyers will push your
selling price way down, so if its not so desperate times, hold on to
what u got. if u can't put food on the table or pay the utilities bills
than that patek/ap/rm on your wrist does not make a whole lotta sense
and u r kinda forced to dump it... i hope u r able to sell them for
good values then (uhm thats unless u r selling them to me jus
kidding all)...
hold on to your rolexes guys, we're in for a
bumpy ride and i wish whoevers reading this, a happy journey even
through troubled times.
cheers
raph
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