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

Hello everyone!

This column discusses mechanical watches from an engineer's perspective. For this 37th installment, I'd like to shift my focus a bit and talk about:

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

I will be discussing this topic.

At first glance, the luxury watch market and the trading card market may seem to be completely different fields, but from an investment perspective and in terms of collection culture, they surprisingly share many commonalities.

The recent news about the chaos surrounding the McDonald's x Pokémon Happy Meal giveaway is still fresh in our minds, so I'd like to compare the characteristics of these two markets.

The Appeal of the Luxury Watch Market

1.传承匠心 (Inheritance of Craftsmanship)

Luxury watches, especially those from Rolex and Patek Philippe, are not merely instruments for telling time; they embody the craftsmanship and traditions built over more than a hundred years.

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

In today's increasingly digitized world, analog watches that offer the warmth of handcrafted work stimulate our desire to collect.

2.Practicality and Asset Value

The appeal of luxury watches lies in their nature as "investable items that can be used." You can wear them in daily life, enjoy them, and still maintain their asset value. Furthermore, they are often passed down through generations, giving them a significance that goes beyond mere objects.

If all you need is to tell time, a smartphone is sufficient and even more accurate than a mechanical watch. The enduring popularity of luxury watches, despite this, is likely due to the significant recognition of their value as assets.

The Appeal of the Trading Card Market

1.Mass Appeal

The world of Pokémon cards, Yu-Gi-Oh!, and sports cards, despite starting as children's games, has now grown into a global investment market.

Particularly "first editions" and "limited promotional cards" sometimes command astonishing premiums.

The aforementioned collaboration cards with McDonald's were distributed for just three days as an "extra bonus" with Happy Meals. All 3 million cards were distributed in a flash, and despite McDonald's request to refrain from reselling, they are currently being traded at high prices in the secondary market.

2.Liquidity

The trading card market is characterized by higher liquidity compared to luxury watches. It's not uncommon for prices to skyrocket in a short period due to information spread on social media and YouTube, displaying a frenzy akin to the stock market. With many young entrants, the strong sense of community is also one of its attractions.

Commonalities Between the Two Markets

1.Scarcity

For watches, this means vintage and limited-edition models whose production has ceased and supply is limited. For trading cards, it refers to first editions and limited distribution items. In both cases, value is created precisely because "they are no longer available."

However, a commonality in both markets is that limited production does not always guarantee an increase in value. There are certainly models and cards that, despite being mass-produced, increase in value if demand continues to outstrip supply.

2.Vibrant Secondary Markets

For luxury watches, active trading occurs at various stores, including specialist shops like ours, and auction houses. For trading cards, there are specialist stores and active buying and selling on flea market sites like eBay and Mercari. Opportunities to purchase through official channels often only come if you win a lottery, and even if you do win, it's difficult to get a popular model or card. This narrow gateway is also a commonality, with the used and secondary markets playing a central role in price formation.

3.Importance of Authentication and Certification

For luxury watches, warranties, serial numbers, and the integrity of parts significantly impact their value. Furthermore, "certified pre-owned" items from some manufacturers come with the added value of reassurance, often trading at higher prices than the usual market rate.

In the trading card market, grading by third-party authentication services like PSA and BGS is highly valued, and there can be a several-fold price difference between graded and ungraded cards.

4.The Presence of Resellers

As popularity in both markets heats up, the presence of individuals, often called "resellers," who hoard items for profit, has become a recognized problem.

The organized acquisition of popular models and their immediate listing on flea market sites or sale to buying stores is by no means commendable.

Conclusion

This time, I talked about the luxury watch and trading card markets, focusing on their commonalities. Next time, in the second part, I will discuss their differences and tips for enjoying your collection.

I hope this article has provided useful information and sparked some interest in luxury mechanical watches! Also, if you have any questions, please feel free to ask directly, and we will be happy to provide thorough answers. We look forward to your visit and inquiries.

See you next time!