WatchQuant

01/03/2024

Market Brief: Last 24 Hours Analysis - 1/3/2024
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Overall Market Price: Increased by 0.12% - A significant move for one day of action.
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Rolex: No change.
Patek Philippe: -0.02%.
Audemars Piguet (AP): -0.07%.
Vacheron Constantin (VC): +0.03%.
Omega: Significant increase of +0.12%.
Tudor: Notable increase of +0.30%.
Breitling: Slight increase of +0.04%.
Cartier: -0.02%.
IWC: -0.02%.
Zenith: -0.04%.
Panerai: No change.
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Liquidity Changes:
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Aggregate Liquidity: Massive increase by 74.88%.
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Gold Index Liquidity: Significant increase by 37.25%.
Platinum Index Liquidity: Large increase by 12.16%.
Two-tone Index Liquidity: Huge increase by 57.14%.
Non-Precious Index Metal Liquidity: Enormous increase by 83.21%.

What does this mean?? Liquidity is a weighted dynamic metric, measuring Historical demand, Recent Demand, Today's Supply, Historical supply, relativity of these measures over the brand and model collection averages, and finally, price spread between bid (what professionals are likely to pay) and ask (what retail buyers are likely to pay), relative to the fair market value (larger spreads are generally less liquid).

That was a mouthful... BUT this is why it's precise. When you see aggregate liquidity increase by 50%, it indicates net-inflows to the index of measure.

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Market Valuation:

The overall market valuation decreased slightly by 0.16x. (A measure of price over intrinsic value (adjusted for materials, weight, craftsmanship). In todays case, we see an increase in the underlying value with Gold sitting around all-time highs and platinum well off its lows.

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Trending Assumptions:

Market Dynamism: The overall market is dynamic, with substantial liquidity increases indicating a relatively active trading environment.

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Brand-Specific Trends:

Brands like Omega and Tudor are experiencing short-term surge in popularity, as indicated by their price increases, and the liquidity increase in non-precious watches (most of the watches produced by these two brands are non-precious).

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Material-Based Shifts:

The significant increases in liquidity for all materials, especially non-precious metals and two-tone, suggest a growing interest in diverse watch types.

This 24-hour snapshot reveals a potential bottoming signal for the market in aggregate - as we've seen stabilization in price and liquidity decreases for the last 2-3 weeks.

Nonetheless, this is just a single day so, head over to the app to see more, deeper, and trending data that will be more significant!

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Psychology:

Given the increased inflows relative to the past 12-18 months, we can see a significant correlation with macro and other markets. Recent, large spikes in Stocks and Crypto generally leads consumers to feel more comfortable about their 401k and account balances, people are more likely to invest in or speculate on timepieces!

See the Liquidity vs Volatility inversion across brands for the day, ending at Omega and staying healthy (liquidity above volatility) for all of the non-precious brands) here below (as an example of how you can make sense of visualizations!
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Brought to you by WatchQuant

01/02/2024

THE Watch-Market Brief: 12/28/2023 to 1/3/2024

Prices:
Overall Market Price: Increased slightly by 0.02%.
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Rolex: Decrease of 0.04%.
Patek Philippe: Significant decrease of 0.73%.
Audemars Piguet (AP): Decrease of 0.08%.
Vacheron Constantin (VC): Increase of 0.01%.
Omega: Increase of 0.07%.
Tudor: Decrease of 0.06%.
Breitling: Increase of 0.09%.
Cartier: Notable increase of 0.62%.
IWC: Decrease of 0.12%.
Zenith: Decrease of 0.03%.
Panerai: Decrease of 0.13%.
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Liquidity Changes:

Aggregate Liquidity: Increased by 5.84%.
Gold Liquidity: Decreased by 1.53%.
Platinum Liquidity: Significantly decreased by 42.05%.
Two-tone Liquidity: Decreased by 4.40%.
Non-Precious Metal Liquidity: Decreased by 3.29%.
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Market Valuation:

The overall market valuation (FMV Price vs. True Value) increased marginally by +0.07x, meaning all in all, prices have increased when compared with their intrinsic values which have also increased due to material values increasing.
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Trending Assumptions:

Price Sensitivity: Brands like Patek Philippe and Rolex are showing higher sensitivity with noticeable price changes. In contrast, brands like Vacheron Constantin and Omega exhibit more stability during this period.
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Liquidity Fluctuations:

The massive drop in platinum liquidity points towards a market moving away from traditional, high-cost luxury staples. Conversely, the increase in aggregate liquidity suggests a healthy market with relatively more active trading.
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Market Valuation:

The slight increase in market valuation indicates a growing market confidence or increased interest in higher-valued watches.
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Precious vs. Non-Precious Liquidity:

The decrease in liquidity for gold, platinum, and two-tone, compared to the relatively stable non-precious metal liquidity, suggests a trend favoring modern, non-traditional materials, something we expect to see happen in more greedy/speculative environments... Following the fed-pivot like a charm!

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Brought to you by WatchQuant, the only watch markets platform worth its salt.

12/31/2023

The Saga of John The Watch Trader, GoggleSheets and Mighty WatchQuant

In Today's Fast-Paced World of Watch Trading... Picture John, a whiz at watch trading, juggling a dazzling array of timepieces. He invested $100,000 in his portfolio and had been using GoggleSheet to track his PnL. Sure it was manual but heck - it did the job, didn't it??

Ah, GoggleSheets, bless its heart. Just like that one friend who juggles 3 beer bottles at a party but can't keep down his 4th drink without yakking. Sure, it kept tabs on buys and sells when John remembered to update it... and yea, it had an AWESOME SUM() functionality... Super high-tech.

The ‘Oh Crap’ Moment:

Well... John's wife was getting nervous. $100,000 and GoggleSheets?

Together they came up with a golden rule. "Never risk more than 5% of the portfolio on any single wrist candy position. But there's a twist - Google Sheets, in all its glory, was simply unaware of such a notion... Risk? As far as John could tell... His 10, $10,000 watch positions were already breaking his rule!

The Game Changes...

Just as storm clouds of the 2022 watch markets began to roll-in, WatchQuant made it's debut. This tool was specifically for John and people like him. Not just a watch collection tracker... it was a map, a ship, and a steering wheel for the modern trader.

John (for free), took 3 minutes to enter in his 10 positions to the Portfolio tool on Watchquant... And what the heck?

Net portfolio value updating in real time?

Demand-supply dynamics?

Liquidity, Volatility, Risk & Reward ratios?

John knew, these metrics, dynamic, precise and changing every day, would help him keep his promise.

Sadly, John's old buddy GoggleSheets couldn't dream of such things.

The Tumultuous Tides of the Market:

John was now able to see that, in-fact, each of his 10 watch positions was actually exposed to $3500 each of risk. Watchquant has incredible precision about risk-to-reward as, it is the #1 metric for helping investors and traders make portfolio decisions!

Armed with his new and futuristic friend, John entered the 2022 bear market prepared!

BAM

"Well, that was quick", John muttered... He watched his net worth (automatically) do a dramatic tango, dipping to $90,000 over the course of just 7 days.

The steel watches, once the high-demand and easy to sell profit centers of his collection, were now the chinks in his armor. GoggleSheets, in all its quaint charm, was clueless about this seismic shift. He stayed quiet...

The Big Alert:

WatchQuant, on the other hand, showed John that, in fact, the 7 Steel watch positions he owned were all risking $5000 with "Oh Crap" pawn shop prices of only $5000... WatchQuant also showed... The max price John would earn from here would be a break-even $10,000... But that was high, and demand was slowing across the whole market (WatchQuant shows this too).

Here comes the punchline: WatchQuant, with its array of shiny dials and gauges, revealed that John’s steel squad was trampling over his 5% rule. Time for action! John, channeling his inner watch-warrior, decided to sell, stemming his losses at a cool 1% of his portfolio each.

John's wife was thrilled that he was such a trading God... Now liquid to the tune of $63,000 and ready to soak up the blood coming to the streets! WatchQuant would be there to show John those opportunities as they came...

Sadly, GoggleSheets wept quietly in the tab next to WatchQuant's. Never to be seen or heard from again. Banished to the aether-realm of broken toys and mishap spreadsheets.

The Aftermath: Dawn of a New Era:

After the dust settled, there stood John – slightly bruised but wiser and... no longer blind to the underlying dynamics of the Watch Markets!

The Moral of the Story:

In the thrilling world of watch trading, where fortunes flip faster than a GMT-II from your AD... WatchQuant is your secret weapon. It's like swapping out your bicycle for a Porsche. If your collection tracker isn't helping you steer the ship and make informed decisions... Well, just head over to WatchQuant and enjoy the free platform for as long as it is free!

What's Next?

As we turn the page, John sets his sights on mastering 'Carry Costs' – a challenge GoggleSheets would have tried so hard to help with! Well, we will read about dynamic Carry Costs, and how they should effect your buying and selling decisions in the next one!

Stay tuned!

12/24/2023

Using the "Today's Top 100 Most Popular Watches" Bar-Chart to find out which watches in your fave brands are currently trending---

Watch traders and investors! Today, we're diving into the "Today's Top 100 Most Popular Watches" bar-chart on WatchQuant. This chart is a strategic tool for anyone looking to understand the balance between a watch's popularity, its market liquidity, and its supply/demand dynamics.

The Chart Unveiled
The chart is structured around three key metrics:

Recent Sell Through Estimates: This ranks watches based on their recent sales volume. It’s crucial for understanding which watches are currently in favor in the market.

Demand Velocity (Hype): Represented by the dark blue bar, this metric shows the change in demand for a watch. It compares recent demand against historical data, giving insight into current market trends.

Demand/Supply Dynamic: Shown as a light blue bar, this ratio compares demand to the current supply of each watch. It’s essential for gauging market pressure and potential scarcity.

The chart is more than just a popularity contest. It offers a nuanced view of the market:

For example, Watches with high Hype levels, but low Sell Through rates might be trending, relative to historical norms, but their market impact could be limited due to lower overall sales volume. Those watches will show up nearer to the end of the 10 pages of watch references on this bar chart.

Conversely, a watch with lower hype but high liquidity (Sell Through rate) could indicate a staple in the market, offering consistent trade opportunities, though a lackluster long-term investment.

Using the Chart Effectively:

Understanding these metrics in tandem allows you to make informed decisions.

High Demand/Supply ratio with low volume: Be cautious. While the watch is in demand, its lower sales volume might indicate a niche market or limited trade opportunities. It may also indicate a growing popularity for this watch.

Balanced Demand/Supply and Sell Through rates: These watches could represent stable and profitable trading opportunities, as they indicate both popularity and market liquidity.

Skewed Sell-Through rates vs Hype rates: This is an interesting thing to identify. If you see a watch close to the first page, that indicates a high sell-through rate. If, however, you also see a low Hype rate, (below 30%), it could indicate that this watch is selling through well now but is slowing down. To confirm, use the next bar over, the demand/supply ratio. If that is also quite low, below 30%, it indicates a 3X supply to demand in the market today... a terrible sign for future prices of this watch.

Conclusion
The "Today's Top 100 Most Popular Watches" bar-chart is a sophisticated tool for traders and investors in the watch market

It’s not just about finding the most hyped watch, or the getting the best prices... but understanding the market dynamics behind each piece and sourcing watches at good prices that also have good market demand and a rising tide for hype & demand vs Supply.

You can use this chart for free as it has a search bar built in with a brand filter too... Find out which watches in your fave brands are currently trending!

We'll be back for more watch markets basics and more!

12/16/2023

Watch Markets, Finding A BOTTOM?!

Following our previous brief that focused on the drawdown of demand velocity, this update highlights a different but notable shift in market trends. The past two weeks have seen a significant (10%) drop, in the supply of high-quality, fairly priced timepieces. This change has led to a measurable impact on several key market indicators.

- Supply and Demand Trends:

Steady Demand with Reduced Supply: Compared to the previous period, demand has remained consistent, but there's been a noticeable decrease in supply.

- Impact on Demand Velocity and Volatility:

The current market situation, characterized by stable demand and reduced supply, has led to an increase in Demand Velocity. Additionally, Volatility, which tracks historical and near-term price and supply/demand fluctuations, has shown signs of improvement.

Demand to Supply Ratio: This important metric, which balances very recent demand against available supply, has seen a notable shift due to the 10% reduction in high-quality supply. This means a healthier ratio overall.

Price Shifts and Brand Performance:

Overall Market Price Shifts: WatchQuant's market average index has registered a minimal absolute price shift of -1.01%, indicating a market that's finding its footing in terms of pricing.

Brand-Specific Trends:

Tudor, Breitling, and Omega: These brands have shown positive growth, with price increases of +0.1%, +0.26%, and +0.25%, respectively.

Rolex, Patek Philippe, and Audemars Piguet: While still experiencing drawdowns, these major brands are seeing a slowdown in this down-trend, with decreases of -0.56%, -0.50%, and -0.06%, respectively.

Market Stability and Liquidity

Market Stability: As demand and supply move towards equilibrium, prices also appear to be reaching a point of stability. This could potentially mark the turnaround point for the year-long bear market trend.

Liquidity: For the first time in a year, the market is witnessing an increase in absolute liquidity, now at 16.58%. This 12% nominal increase (up from 14.60% last period) is a significant shift, albeit the market remains in a delicate state, as liquidity under 25% is unhealthy over all.

So? What does all this proprietary mumbo jumbo mean?

While not yet indicative of a fully healthy market, these trends suggest a move towards stabilization. WatchQuant.com will continue to provide in-depth analysis and updates on the watch market, which you have full access to, live and daily on the web-app. As always, this is not investment advice, and Watchquant is the proprietor of all of our analytics, utilizing the latest data to keep you informed of all significant market shifts.

Stay tuned for more detailed market briefs as we conduct further quantitative analysis on the most current and relevant market data.

12/06/2023

I've been pondering something lately... For serious timepiece enthusiasts, investors, traders... one investment is likely to cost more than a car -- upwards of a house in other cases... So why is it these watch lovers are so unserious about tracking their investments?

Before 2017, perhaps this is/was not an issue at all. But, as watches have entered the zeitgeist of the day, particularly in the US - A true investor of timepieces may ask themselves... "Am I doing my collection justice?"

Many people rightly view their timepieces not just as collectibles, but as significant financial assets, as noted above. This perspective should come along with a shift to a more meticulous approach... something beyond the simplicity of a watch-tracker journal or a PnL spreadsheet in excel.

The Critical Metrics for Watch Portfolio Management:

To effectively manage a watch portfolio, several key metrics are useful. These include:

1. Purchase Date - Sale Date

2. Original spend

3. Paid/Accrewed Fees

4. Duration in Position

5. Asset Condition (any changes that affect value).

6. Today's Fair Market Value, (changes daily)

7. Unrealized Profit/Loss

8. Proper portfolio cash balance: Cash reserves for new purchases or from recently sold positions

9. Carry-cost: there is a dynamic cost to be considered, to off-set your profitability based on "risk-free-rates". One should always consider the opportunity cost of their investments.

10. Liquidity scoring for each position (easy to sell, or not?)

11. Portfolio Risk: the down-side each position is likely to experience in a bad scenario. Are you over-concentrated? Is a new position providing you with an asymmetrical risk to reward, or has that ratio changed as the markets move (it does!)?

12. Net Portfolio Risk: the percentage of your portfolio which is at risk (not necessarily the value of your pieces, but the portion of the value that one could see in bad cases

13. Risk-to-reward per position - an indicator, based on today's value vs your buy-price that makes clear when a position is likely time to take profits on (high risk low reward, for example).

14. Portfolio slice percentages - Are you sufficiently diversified? All your capital locked up with one position?

I could go on... but we'll deep dive these metrics down the road.

Dynamic Measures for a Dynamic Market:

The watch market is in constant flux, affecting these metrics daily. Effective portfolio management requires understanding these dynamic factors, which are only accessible through wired-up data streams -- Does your notebook have that kind of access automated for you? Does gSheets?

Making Informed Decisions:

With a proper portfolio tool, investors can make educated decisions about when to sell a piece, how to manage risk, and understand their portfolio's health. A proper way to precisely see your TRUE profit and loss.. export for your accountant for any given date-range and pay the tax man!

What ever you choose, no matter who you are or what timepieces you collect, trade, or invest in... I hope this brief post will help you consider using an easier/automated portfolio management approach to your collection... an approach that will ensure every decision you make can be data-driven.
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Sponsored by WatchQuant (Free for a limited time)

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WatchQuant's unique offering transforms real-time market data into actionable insights and tools, like our portfolio manager.

WatchQuant redefines luxury watch collecting as a calculable and manageable part of a greater diversified investment portfolio... but also provides the necessary tools to navigate this intricate market intelligently.

If this sounds like a reasonable exercise to partake in, reach out to me and I'll be happy to get help!
- MWQ

12/04/2023

The Cutting-Edge of Watch Investing: Insights from WatchQuant

Unlike traditional viewpoints on luxury watches... a focus solely on watch prices and listings, it's becoming ever more important to consider other serious and regularly calculable market metrics for serious watch collectors and traders.

Dive deeper... before making major decisions about your hard-earned cash on a purchase or sale of a luxury Watch, you may wish to consult aggregated market data, beyond price trends, to glean a comprehensive view of key market dynamics (this includes volatility, the impact of specifications like provenance or condition on pre-owned pieces, liquidity, and much more)... Let's chat about what's happening right now in the Watch Markets!

Recent Market Trends: A 60-Day Snapshot

Over the past 60 days, the major watch markets for top brands like Rolex and Patek Philippe have seen an average dip of ~3% in index averages. However, more notably, liquidity indexes have dropped significantly more... and liquidity is a leading indicator of price (among other things).

Changing Scenarios:

Demand, Liquidity, and Investment Potential

Initially, with regards to highly traded/high-demand watches, market scanners identified over 75 watches as highly liquid and worth consideration for purchase, trade, or flip. Today, that number has fallen to just 18. That's a 75% reduction in the total number of high-demand watches in today's market environment.

Conversely, the scanned total count of investible watches - those deemed undervalued with high intrinsic value (i.e. Gold, Platinum, Name-Brand...) - has doubled, from ~60 to 100+...

The Impact of Economic Shifts on Watch Investments

In a high-rate environment, speculative assets, including many non-precious metal watches, face challenges. Watches with lower intrinsic values are experiencing downturns, while those made from gold, platinum, white gold, as well as certain well-known models remain mostly stable and are gaining liquidity (if not price)... mirroring the rise in demand and price of these precious materials. Leading indicators would suggest buying undervalued pieces could be a solid longer-term play.

Conclusion: Your approach to understanding and navigating the watch market, whether you're a collector, investor, or enthusiast, should include deeper looks at metrics like risk to reward at X price, trade grades at that price, liquidity of the piece in question, supply and demand dynamics... as well as pricing. Trends are not your friend in Watches... there's simply not enough participation to make trends matter!
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Dynamic Scanners: Always know which pieces are where... going beyond price and considering the deeply important metrics you aren't seeing on eBay or Chrono24.

10/30/2023

Watch Markets are beyond fear and greed -- Blog Post:
https://invest.watchquant.com/blog/blog/watch_market_resilience

https://conta.cc/40g7Hpq

This is the watch market WatchQuant Preserve Your Time, Leverage Ours. Welcome to the Watch Market       Start Doing Watches RIGHT WatchQuant's Proprietary Pricing Calculators   Watch Masters -- The r

09/23/2023

Time to catch-up on this week's watch market movers...

08/20/2023

The Top Movers this week!

Hardcore hard-times this week... and yet this Pilot's watch stands above the REST!

https://conta.cc/3OLwAEj

This IWC Pilot is killing it! WatchQuant Preserve Your Time, Leverage Ours. Welcome to the Watch Market       Top Movers This Week's Movers   Watch Masters -- This week's BREAK DOWN: BREAK DOWN: Amid

08/06/2023

Some Grails are just better than others... https://conta.cc/440Mpwp

Liquidity is more important than price - and we see a BIG MOVE... WatchQuant Preserve Your Time, Leverage Ours. Welcome to the Watch Market       Top Movers This Week's Movers   Watch Masters -- In to

07/30/2023

NEW TOP MOVERS: YOU'LL NEVER BELIEVE WHAT HAPPENED TO THE ROLEX DAYTONA 116500 THIS WEEK...

https://conta.cc/457vLME

Liquidity is more important than price - and we see a BIG MOVE... WatchQuant Preserve Your Time, Leverage Ours. Welcome to the Watch Market       Market Performance Top Movers - July 30   Watch Master