I look at Luxury watches this way: I'm sure I'm preaching to the choir here, but f it.
Primarily, It's another way of storing value for long term growth while I get to enjoy something I like. Secondarily, it tells a certain story and projects a certain image (just like anything else we have and do).
As a value based investor, I can ask, what's the intrinsic value of a watch? Material + labour at the very bottom and marketing and sales as the additives. So, if that's the valuation calculus, then obviously we can't see any movement of any watch exceeding $5,000 unless we are talking about exotic minerals and such. So, why pay $65,000 for a rose gold Rolex Sky Dweller? hmmm.
Well, supply and demand my good man. Through, hook or crook they have established a brand recognition and it's not that you're wearing a watch that tells time, you're wearing a Rolex which have anointed the wearer with certain privileges and an image. So, yea, the valuation come from the adherence to that brand which you identify as something that is well crafted, has longevity, can be sold or pawned off in bad times, and rare, plus much more. These are the reasons to buy anything. So, if buying a Rolex gives me capital growth while I get to enjoy it, seems like it's too good to be true, but it's not.
Rolex watches rose in value more than stocks or gold over the past decade
I agree to a point with JC100 (Jesus?), yea we have all been swindled by business that's abhorrently elevated prices for just having a brand and riding the wave of some old time pedigree. If everyone decides that Rolex is useless and stop buying it, the value of Rolex is just as another Grand Seiko or worse. But, I think you know that's not going to happen, and even if Omega is producing .5 Million watches per year, so what? 8 Billion people, right? That still leaves the 80 Million 1%rs to fight over those half a million Omegas per year.
The price we pay is for the image or the stories that we weave. So to the point that counterfeiting is purely a technical problem and if the original piece and the counterfeit pieces is factory identical, are we being swindled by the original brand owner? To me, it's a no; cause I'm not just paying for the quality of the movement and the rarity and the polish of the metal. I'm paying for much more, I'm paying for something that defines me and add to that the power and the story of a brand and it's goodwill value.
Even a counterfeit that's 100% identical is still a counterfeit cause it's a faking something that it's not, and that's a story that I don't want to tell.