Dr. Ito's In-Depth Analysis of Mechanical Watches! Vol. 37 - The Relationship Between Luxury Watches and Trading Cards (Part 1)

Good evening everyone!

This column talks about mechanical watches from an engineer's perspective. This is the 37th installment, and we're going to take a slightly different approach than usual.

"The Relationship Between the Luxury Watch Market and the Trading Card Market (Part 1)"

I will be talking about this topic here.

At first glance, the luxury watch market and the trading card market seem like completely different fields, but they have a surprising amount in common when it comes to investment perspectives and collecting culture.

The recent news of the chaos surrounding the bonus items offered in Happy Meals, a collaboration between McDonald's and Pokemon, is still fresh in our minds, so we would like to compare the characteristics of these two markets.

The allure of the luxury watch market

1. Inheritance of craftsmanship

Luxury watches, such as Rolex and Patek Philippe, are not simply tools for telling time; they embody the craftsmanship and traditions that have been built up over a hundred years.

Models such as the Daytona and Nautilus, which have already established a reputation for quality and durability, remain popular even decades after their release.

In today's world where everything is digitalized, analog watches, which give you a sense of the warmth of something handmade, are something that stimulate people's desire to collect them.

2. Practicality and asset value

The appeal of luxury watches is that they are "usable investment items." They can be worn and enjoyed in everyday life while maintaining their asset value. Furthermore, they are often passed down through generations, making them more than just objects.

If you just want to know the time, a smartphone is enough, and it is even more accurate than a mechanical watch. Nevertheless, the popularity of luxury watches remains strong, likely due in large part to the fact that they are recognized as valuable assets.

The allure of the trading card market

1. Popularity

The world of Pokemon cards, Yu-Gi-Oh!, and sports cards may have started as children's games, but have now grown into a global investment market.

In particular, "first editions" and "limited promotional cards" sometimes command an incredible premium.

The aforementioned McDonald's collaboration cards were distributed for three days only as a "bonus extra" with Happy Meals, but all 3 million were quickly sold out, and despite McDonald's request that they not be resold, they are currently being traded at high prices on the secondary market.

2.Liquidity

The trading card market is characterized by its high liquidity compared to luxury watches. It is not uncommon for prices to skyrocket in a short period of time due to the spread of information on social media, YouTube, etc., and it can become as enthusiastic as the stock market. Many people, especially young people, are entering the market, and the strong sense of community is one of its attractions.

Commonalities between the two markets

1. Scarcity

In the case of watches, it could be vintage or limited edition models that are no longer in production and are in limited supply, and in the case of trading cards, it could be first editions or limited editions. Both of these have value precisely because they are no longer available.

However, a commonality between both markets is that limited production does not necessarily mean that the value will increase. Of course, there are also models and cards that are mass-produced but whose value will increase if demand continues to exceed the production.

2. Booming secondary market

Luxury watches are available at a variety of stores, including specialty shops like ours, and auction houses. Trading cards are actively bought and sold at specialty shops and flea market sites like eBay and Mercari. Official sales are only available through lottery draws, and even if you do win, it's difficult to find popular models and cards. This narrow gate is a commonality, and second-hand and secondary markets play a central role in determining prices.

3. The importance of certification and accreditation

With luxury watches, the warranty, serial number, and part integrity have a significant impact on value. In addition, some manufacturers' "certified pre-owned" watches also offer the added value of peace of mind, and are traded at higher prices than the normal market price.

When it comes to trading cards, grading by third-party appraisal agencies such as PSA and BGS is important, and there can be a price difference of several times between certified and uncertified cards.

4. The existence of resellers

As the popularity of both markets has grown, the presence of people known as "resellers" who buy up products for profit has become a problem.

It is never a good idea to systematically buy up popular models and then immediately list them on flea market sites or take them to a buy-back shop.

summary

This time, we talked about the similarities between the luxury watch and trading card markets. In the next part, we will introduce the differences and tips for enjoying your collection.

We hope that this article has been useful to you and has sparked even a little interest in luxury watches! If you have any questions, please feel free to ask us directly and we will be happy to answer them. We look forward to your visit and inquiries.

Please look forward to the next one!