Is it a dumb financial decision to buy/finance a 116508 John Mayer Green Dial just to resell it?

[architekt]

A close friend of my family who buys quite a lot of rolexes from a regional AD offered me to get a 116508 Green Dial within the next 1-2 years.
He's not per se a grey market dealer but grew to be the pretty much go-to-person to get any rolex in a regional circle of semi-wealthy to quite wealthy friends and acquaintances.

Seeing that I'd pay pretty much retail (and a small thank you to him) and the current value of these watches on chrono24, I'm really tempted into thinking that this would make one hell of a flip ... at least if the value holds for that timeframe.
I've talked to him and he is aware that I'd be selling the watch immediatly and said this won't be a problem for him.
Also I'm not sure if I want (or due to possible changes in my life, can) just let that amount of money "lay in reserve" for when the day comes, therefore It is entirely possible that I would need to finance (i.e. short term credit) the watch.

Despite this all just seems a little bit too good to be true to me tbh.

Like, it's not about the guy, I would bet quite a lot more money on the honesty of him as he is a friend of my family for over 35 years now and has prooven the loyalty of his word beyond any doubt and he also got me a rolex before in a (at least for this country) crazy short time.

But, whats the catch with this flip then?
Do I overvalue the long term value of that watch?
Or am I getting really lucky here and should just stfu and give him my go?

 

[Uhrenjoe]

What you are describing is essentially a speculation. This can make sense if you do it in a market where you know more than the average market participant - which in this case is probably true since you posting here implies that you know a lot about Rolex watches.

But what it boils down to (if you finance the purchase) is a leveraged speculation on the price increase on a speculative asset. I distinctly remember that way back when in 2008/2009 during the recession and financial crisis the prices for luxury watches were in free fall. So much so that Rolex saw itself forced to hoover up all its excess stock around the world so that prices would not plummet further. They eventually sold all that inventory when markets and the economy recovered, but seeing as we have been since then (2009) in a 12 year orgy of speculation in stocks, bonds, real estate, fine wine, art, classic cars, crypto currency, etc. I think the risk is that you end up buying that watch at the top and may finde yourself having to sell it at a steep loss.

Just my 2 cents.

 

[Xtra-Crispy]

As an investment broker, I would highly discourage you from borrowing funds for any type of investment - especially for a watch.

 

[Rx4Time]

Put succinctly, horrible financial decision. If you buy to enjoy then great, but to flip, I wouldn't recommend it. Just because the gray market dealers ask stupid prices doesn't mean they sell many. Plan on sitting on it for a while, it won't be a quick flip like you seem to believe. Also, the stainless steel models are most popular, not gold. remember, there's no guarantee the stupid high prices will continue two years out as I expect the supply situation to improve once we get past the bulk of the pandemic. I don't see a significant drop in prices, but I don't expect them to continue on the current upward trajectory.

 

[dustin]

As an investment broker, I would highly discourage you from borrowing funds for any type of investment - especially for a watch.

That's funny, because I would do a flip like this on my margin (which allows spending/cash out and I use often for liquidity) at 2.5% in a second for the quick 100% profit.

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[financialaid2014]

If you were offered it tomorrow and you could sell in 5 days yes do it. If you MIGHT get one in 1-2 years it’s kinda moot until you get offered it and you can see what the market is doing. If you plan to flip right away in a Bull watch market there’s very little risk. If you intend to buy and hold for even more gains that’s where the risk lies


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[DiggerOfWatches]

Personally - I would never borrow money to buy a watch. Sure there's some that increase in value, I'm sure a lot of us have watches we could sell at a profit. Especially Rolex's.

But buying to flip? Hmm not something I would do. However I am no expert in financial advice. Just my 2 cents...

 

[Vineetd23]

Go for it man, the market for luxury watches isn’t crashing anytime soon, getting one at retail right now is tough, got to take some risk to make money


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[YellowFin]

I'd place an order for a ceramic steel Daytona instead of a precious metal model. Will arrive quicker as dealers get more of those and a lot easier to flip with a massive upcharge.

 

[Docrolex]

Sounds like a typical scam. No one with profound knowledge would sell a Rolex without flaws and issues under market value. Everythig what seems to be too good to be true turns out not to be true.

 

[Vineetd23]

Did you pull the trigger?


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[architekt]

Did you pull the trigger?


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I did not.
Although it still would be a great Deal (and yes actually not a scam lol), I stayed clear of it as I would have to finance the watch as most of my assets are bound at the moment.

 

[dustin]

You still have the option? I'm interested and have the liquidity.

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[nipe]

Why doesn't your friend just give you $30k in cash directly? This deal makes no sense.

 

[eBoy]

Financial advice sites are literally plastered with "7 / 9 / 10 etc. rules of investing" (Or a very similar title) in all the different colors, designs, layouts and with slightly different contents/rules.

But they all have two things in common: The following rule and it being always placed on position #1 in the rules list.

— Never borrow money to invest —

 

[bleedinglottery]

Financial advice sites are literally plastered with "7 / 9 / 10 etc. rules of investing" (Or a very similar title) in all the different colors, designs, layouts and with slightly different contents/rules.

But they all have two things in common: The following rule and it being always placed on position #1 in the rules list.

— Never borrow money to invest —

maybe from friends but this is not the way to go if you are dealing with a bank. if you want to invest in something big dont ever use your own money. always go to the bank and look for the best loan on 120% of the ammount you are looking for. if your investment is in real estate etc. or something where you can almost guarantee a return.
you should have absolutely taken the deal. take a loan on the bank and get the watch. list it for sale immediately and sell it. take the money from the sale give the bank, 6-10 payments after you took the loan to build up score, their money back and keep the return. in the end you made a good deal earned some money and your credit score improved massively