Subject: Re: The Swatch Group Ltd (UHR.SW)
You mentioned in one of your posts, the earlier threat to Swiss watchmakers from Japanese watchmakers. That is a good reminder of how this is a difficult business. Since then the threat has come from smart watches. Another headwind has been the move to more casual dress since Covid making more modern watches more acceptable and traditional watches perhaps less appealing. Then there is the rise of manufacturing technology, another threat.

Yet despite all those headwinds, I still think there is place for Swiss craftsman and history. There is something magical and desirable that people want to pay up for. I can see the Chinese going wild for Breguet in the future, if the brand and supply was intelligently managed.

Great post, I agree with all of that. Quartz watches keep better time and are simpler than mechanical watches. Smart watches do vastly more than quartz and keep even better time. And of course we all have a phone in our pocket that keeps the time as well. So unless you constantly need to check the time--which most of us don't--you probably don't need a wrist watch, especially not a expensive mechanical watch that doesn't keep as good of time as the device you have now.

But there is a certain aesthetic of having a mechanical masterpiece on your wrist. It is definitely a fashion/luxury statement. As you say, there is something magical and desirable that people will pay for. I think this was the money shot of your post:

I recently discovered that the resale value for an unworn Breguet Tradition, for example, is significantly less than the retail price from Breguet. A completely opposite dynamic that exists for certain Rolex or Patek Philippe. That tells me Breguet is not being marketed properly.

Rolex branded itself with its professional watches. If you really needed to know the time, like if you were an airline pilot, deep sea diver, CERN scientist, or race car driver, you needed a Rolex. James Bond needed a Submariner--functional yet refined. Thomas Magnum's father was a naval aviator, so obviously wore a GMT Master. Paul Newman the race car driver naturally needed a Daytona. Rolex managed to thread the needle between lifestyle and fashion/luxury. So Rolex might not have the best watch, but they created the best brand.