The Panerai Conundrum: How Mass Confusion Can Make You or Break You Watch Trading | Watch Trading Academy

The Panerai Conundrum: How Mass Confusion Can Make You or Break You Watch Trading

It used to be that years ago most luxury timepiece brands (especially the Swiss brands) would be conservative with the amount of units they would manufacture each year.  

Each brand had a strategy built around why they designed certain models, how many units they produced annually, and how they would distribute these to the market.  

The deliberate approach was one that made it valuable for the brands, collectors, and dealers to play off of.  If one had a Panerai Luminor Submersible 24, a Panerai Luminor GMT PAM 88, or a Panerai Luminor 312, these were specific reference numbers that were desirable in the market for reasons such as complications of the watch, the watch’s design that fit into the overall structure of an enthusiast looking to add to their collection.  This also helped the brand hold value for collector’s, because they could enjoy the predecessor piece and then a variation of that one in the future without worrying about their older watch losing significance.

But this all changed in the past decade.  Specifically using Panerai as the target for this situation (although many other brands have done the same).  As Panerai struggled to meet their financial numbers and had their long running CEO Angelo Bonati retire, they lost sight of what made them so great to start with.  

They shifted their focus to in-house movements in order to charge more for the watches.  They started producing a slew of new models that oversaturated the market. Everything from limited editions, special editions, one time lines, new models expanding upon legacy models like the 1312 as an example over the 312.  

This increase in novelty models, new movements, materials, and reference numbers may seem cool.  And don’t get me wrong there are some amazing and interesting designs coming from the brand still.  However, the over-pumping of these year after year have done their damage.  

The once die-hard group of Panerai enthusiasts (collectively known as the Paneristi) have since died down to a lulling flame.  Once the bloodline of collectors for the brand, Panerai burned them by deviating from the culture, values, and models that made the followers so loyal.  Beyond losing the interest of some of their biggest fans, they also screwed themselves over in the mass market. And this is what I call the Panerai conundrum.  There are so many models and options available it confuses the buyers.

This convolution of and confusion of the buyer market can work for or against you making profits as a watch trader if you know what you’re doing.

 

How it works against you and the market:

When people want a Panerai watch these days, they’re either a newbie who has no clue what to start with or an enthusiast who only wants very very specific models.  

The mistake a lot of watch traders make is they buy a certain Panerai watch and only compare the comps of that watch reference to the same exact model.  They come up with a target price number (taught in Knight Watch Course) and even use WTA Part 2’s bottom cash value chart, and still don’t realize that the comps they’re looking at aren’t all of the relevant ones due to how many similar models are out there.  

So typically someone will look at say a Panerai Luminor 561 and only use other Panerai Luminor PAM00561 models as comps.  This is a beautiful steel model base Panerai. What they fail to consider though, is that there are several base model Panerai Luminor steel models (000,001,005, etc) that can be compared to this model especially by a retail buyer who doesn’t know the minute differences between the two.  So in actuality when you’re trading watches and selling to retail buyers, you should be looking at almost any reasonable comp that can be compared to that model. Because a retail buyer isn’t sitting around all day dreaming like “man I can’t wait to buy a Panerai Luminor PAM000561”. They’re more than likely exploring more than just one brand, and probably saw the design of the Panerai or had a buddy who had one and now they want one.  So you have to think like them when selling to them not like a trader.  

In this example, you could aim to buy one of the best priced steel Panerai base models available so it would make for a great first starter watch for someone.  

 

How it works for you:

If you find the more scarce models that look absolutely stunning and/or have the collector allure, you can command quite a profit from trading these.  Examples of these would be a Rose gold Panerai 1020, or the Panerai 911 (last one for the Paneristi). These are still very specific models, highly sought after by collectors and retail buyers, and harder to compare other models to in the market.  

Get your hands on these bad boys and watch your profits soar.  Just remember that doesn’t change that you should always be in the watch at the right price still.  Use the BCV charts and target price calculations to ensure you’re on point.  

This article focused on Panerai as the brand that people have this issue with, but many other brands do too.  In fact the only brands that really do it right still and don’t have this issue as much are (Rolex, Patek Philippe, Audemars Piguet, Vacheron Constantin, Cartier, and maybe one or two others). 

Cal Knight
 

I’ve had a passion for luxury timepieces my entire life, and it wasn’t until 2011 that I started collecting and flipping those assets with the techniques learned here at Watch Trading Academy. Mastering the intricacies of the watch market, the boutique brands, and how to approach the process have all been essential to making intelligent investment decisions which has resulted in $100k in profits in less than 5 months, be sure to check out how I did it here.

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