The following is an email written by a friend of mine whom I respect very much, Bryan Goh. He is an old timer in watch collecting and the various internet watch fora. I agree with what he writes, and believe forum members will benefit from reading it. I hope to hear from those who disgree.

- SJX

The capitulation of Rolex and the beginning of the end

Basel wasn't disappointing per se. The watch industry has been disappointing for a number of years now. How many series of limited editions launched sequentially does it take to dilute the specialness of a limited edition? How trivial need the changes be to distinguish one limited edition from another? How much further can they pander to slender wrists of both genders seeking ever larger watches? How more desperately attention seeking can the dials and bezels, cases and bracelets be?

To me the Rolex DeepSea marks the end. In investment markets, there is the concept of capitulation. The astute investor who stays well away from tech stocks until in disgust he decides at the end of 1999 to finally invest. The trader who accumulates his positions from 2001 through 2002 only to lose patience, question his own wisdom and sell everything in 2003. So also Rolex despite robust sales sees competition in earnest for the first time in decades, and let's be honest there is serious competition, struggles to understand the logic of the Panerai, which celebrates a gang of Fascist marine terrorists I might add, that wears the slight Asian gentleman, decides to wade into the fray with a larger Day Date and a clock on bracelet called the DeepSea we pretend to call a watch. For years Rolex has defied the temptation to periodically re-case old movements. Instead they have dynamically if a little slowly made marginal improvements upon the functional aspects of the Oyster, shaping that famously robust timekeeping tool while others made jewelry, what else can you call the umpteenth re-casing of a movement unchanged for over a decade?

The US economy is in recession, Europe isn't far behind. Despite the resilience of Brazil, Russia, India and China, these economies will also slow down, although thankfully in their case intentionally. There are a billion wrists still to adorn yes, but this will take time, to educate, cajole, hoodwink. In the meantime the US and Europe, already drunk with horological excess, can only slow down.

If you have to buy a DeepSea, wait a bit. It will go to premium as some IPOs do even in the last legs of a bull market, but they then tend to trade lower than IPO price in the coming years. I would look in the distress to pick up the old GMT II, the Explorer II, the current Sub with date. Don't do it quite yet. The market will give you a chance. And there is no need to buy them new. Always be a buyer in times of distress from weak holders in distress.