Month: October 2023

Luxury watches represent a unique sector, embodying craftsmanship, heritage, and prestige, which contribute to the appreciation of this luxury item over time. But what is the current market dynamic, and what are the peculiarities of acquiring luxury watches for investors?

Attractiveness for Investors
Luxury watches have long been regarded as one of the key symbols of status. The market is valued at 75 billion dollars, where pre-owned watches account for about 30% (22 billion dollars). Investing in vintage watches is seen as a promising strategy, especially when it comes to lesser-known brands that haven’t yet gained widespread popularity.

Market Performance
A report by the British company Luxe Watches showcased how lucrative luxury watches can be as an investment asset. For instance, according to the chart, the brand Patek Philippe demonstrated a growth of +207%, surpassing major stock indices such as the S&P 500 and FTSE 100. The overall Watch Market Index increased by +235%.

The report also identified certain models of luxury watches that exhibited remarkable profitability in 2022:

•   Patek Philippe 57111A with an ROI of +788%
•   Audemars Piguet 15202ST with an ROI of +613%
•   Rolex 116500 with an ROI of +197%.

It was noted that significant price appreciation is provided by simpler models without complex mechanisms.

However, not all brands showed high profitability. For example, brands like Hublot, BVLGARY, Piaget, H Moser & Cie, and Girard-Perregaux demonstrated an ROI of up to 8% over the past 5 years. Particularly, in 2020, Hublot’s ROI dropped to -2.2%.

This indicates that while these watches can be a beautiful addition to a collection for personal pleasure, they are not a favorable choice for investment in terms of financial profitability. There are watches for the soul, and there are watches for profit.

Nuances
Watches require maintenance, and wearing them can reduce their value. They demand ideal storage conditions, unlike stocks or bonds. And, of course, the market is subject to trends and brand reputations, which can fluctuate over time.

In conclusion, besides financial gains in the long term, watches are objects of art and collectible items, adding value as objects of pleasure and expressions of the individual style of their owner.

Green energy and electric vehicle development are hot topics worldwide. But what are the actual trends in this market?

1. While electric vehicle production is increasing, global dominance in the automotive industry still belongs to traditional internal combustion engine (ICE) cars. This is supported by statistical data and is easily observable on city roads.
2. The global infrastructure for electric vehicles is still in its nascent stages. Issues related to charging, maintenance, and disposal require additional investments.
3. Extreme weather conditions in certain countries present technical challenges for electric vehicle operation.
4. Most electric vehicles still cost more than traditional cars, making them less affordable for the average consumer.

Interesting facts:

Top 5 electric vehicle manufacturers:
• Tesla: USA
Sales in 2022: 1.31 million cars
Market Capitalization: $738.8 billion

•   Li Auto: CHINA

Sales in 2022: 133,300 cars
Market Capitalization: $45.3 billion

•   Rivian: USA

Sales in 2022: 20,300 cars
Market Capitalization: $20.1 billion

•   NIO: CHINA

Sales in 2022: 122,500 cars
Market Capitalization: $20 billion

•   Xpeng: CHINA

Sales in 2022: 120,800 cars
Market Capitalization: $14.9 billion

-According to the International Energy Agency (IEA), over 10 million electric vehicles were sold worldwide in 2022. The IEA predicts that sales will increase by 35% in 2023, reaching 14 million.

-Despite current challenges, many countries are heavily investing in infrastructure to support electric transportation. For instance, extensive charging station networks have been established in Europe, the USA, China, and other countries. In Norway, there’s 1 electric car for every 7 residents, in Germany 1:44, in China 1:100, in the USA 1:114, and in Japan 1:306.

Conclusion:
Although the transition to electric vehicles is inevitable and supported at the governmental level in many countries, the process will be lengthy and requires addressing several technical and economic challenges

1. Pilot’s Perilous Intent
   An off-duty Alaska Airlines pilot was booked into jail in Oregon on Monday morning on 83 attempted murder charges, after he allegedly tried to shut off the engines of a San Francisco-bound plane.
2. The Great Puppet Heist
   Thieves stole a truck filled with hundreds of handmade puppets used in a nationally touring theater show of large-scale shadow puppetry early Monday, leaving the production company empty-handed after four San Francisco shows.
   The stolen U-Haul truck contained 500 puppets, props, costumes, projectors and other items used to stage puppet master up a two-day run Sunday at the Fort Mason Center for Arts & Culture.
3. Tech Titans Exit Web Summit
   Google and Meta are the latest companies to drop out of a major tech summit over the event founder’s remarks on Israel, company representatives told multiple outlets.
   The tech giants joined a growing number of attendees and sponsors withdrawing from Web Summit’s global technology conference in Lisbon, Portugal, next month after Chief Executive Paddy Cosgrave condemned Western support for Israel.
   Cosgrave accused Israel of committing war crimes in a series of posts that spurred huge backlash on X, formerly known as Twitter. He later resigned and apologized in a statement on the Web Summit website, saying his comments on the Israeli-Hamas conflict had “caused profound hurt.”
4. Microsoft’s Real Estate Rethink
   Microsoft has listed up to 49,000 square feet for sublease in one of San Francisco’s tallest towers, 555 California St.
   The tech giant is offering sublease space as small as 4,500 square feet up to 49,000 square feet, with a term through May 2029, according to marketing materials.
   The move comes weeks after the company opened a new artificial intelligence lab in the offices, offering free coworking space for clients in the fast-growing industry. Microsoft-owned LinkedIn also just listed part of its 222 Second St. offices for sublease in South of Market and laid off 668 employees
   The moves underscore that cost-cutting is continuing in the tech sector a year after mass layoffs began and remote work remains entrenched. They come at a time when some AI companies are growing, but not enough to offset the city’s growing office vacancy rate, which hit a record high 34% in September.
5. Qualcomm Cuts Workforce
   Qualcomm, the tech giant known best for its dominance of the smartphone chip industry, is laying off 1,258 California workers, according to documents submitted to the California Employment Development Department.

[cherry_team id=”7524″ excerpt_length=”20″ more=”true” more_text=”Meet our leaders →” more_url=”/” ajax_more=”false” show_name=”true” show_desc=”false” show_photo=”true” image_size=”full” show_position=”true” template=”grid-boxes”]

Quote: “The ongoing geopolitical tensions could potentially disrupt established global supply chains, leading to trade wars, new sanctions, and more. It’s hard to fathom the repercussions if Persian Gulf nations cease oil and gas exports to Europe and the USA.” – Andrey Syrchin, CEO of Cresco Capital

Greetings. I continue to share insights to help everyone understand the current financial dynamics at a domestic level and what might transpire in the near future. I turn my attention to oil – a cornerstone for many processes.

The attached graph illustrates a 23-year trajectory of oil prices, beyond which the monetary values and inflation rates were significantly different, rendering a further analysis less relevant. Currently, the oil price stands at a moderate level, neither too high nor too low, relative to the average.

Recent developments in the Middle East have prompted a thorough contemplation of oil quotations. The cause of concern primarily revolves around the following aspects:

1. Oil permeates every aspect of daily consumption—be it a flowerpot, the bread one consumes, a cucumber, or the wooden table before you, a significant portion of their composition is attributable to oil.
2. Inflation and consumer expenditure are intricately linked, given the indispensable role of energy and oil products in logistics.
3. A myriad of oil-producing nations, including the USA, Saudi Arabia, Russia, Iran, Iraq, and Norway, have their economies closely intertwined with oil.
4. Countries with energy-intensive economies, such as China, India, Turkey, Germany, France, and Japan, often face hardships when oil prices reach extreme levels.

The unfolding warfare threatens to dismantle established supply chains globally, potentially leading to embargoes, trade wars, new sanctions, among other repercussions. The oil market bore the brunt during the pandemic, and a contrary scenario could unfold now. The ramifications could be dire if Persian Gulf nations halt oil and gas exports to Europe and the USA. Escalating tensions could trigger an uncontrollable surge in oil prices, with speculation reaching its zenith, potentially pushing prices to the 150-200 range—a scenario not unfamiliar in history, albeit the inflation dynamics have altered since.

Projected Outcomes:

1. A sudden dip in global GDP, plunging major economies like the USA, China, and Europe into a severe recession, with the USA possibly curtailing exports to meet domestic demand.
2. Inflation is likely to linger for several years ahead.
3. Monetary expansion could intensify, yet lowering interest rates may not be feasible, lest hyperinflation ensues in western nations.
4. Initially, oil-producing countries might experience a short-term positive impact, followed by a downturn. In this scenario, the ruble could potentially depreciate to 70-80, for instance.

In conclusion, our current position appears to be on a significant fault line, making future trajectories uncertain. The heightened provocation from Iran, if escalated into a direct confrontation, could induce volatility in the markets, affecting currencies and commodity markets alike. However, it’s noteworthy that markets seldom plummet during military conflicts; on the contrary, they often thrive. So, for those anticipating a doomsday scenario, rest assured, the outcomes are generally predictable. The likelihood of oil prices hitting 100 this year is high, a prediction nearly realized earlier, but upcoming events might provide the necessary impetus.

Wishing everyone a good week!