Friday, July 23, 2021

The Big Mac index and Rolex Daytona


The Big Mac index is regarded as an indicator of purchasing power and it shows us the price evolution in any given country of this exact burger. What the historical pricing data tells us is that Big Mac prices have gone up considerably and quite consistently. The average price for a Big Mac burger in the USA is US$5.66 in 2021, and it was US$5.30 in January 2018. In comparison, the same burger would have cost you only US$3.57 in 2008 and just US$2.51 in 2000.

Looking at the above 40 years chart, listing the prices for several Rolex models, the seasoned chart-ninjas among you will have noticed one key anomaly: the end of the Rolex chart is as flat as a pancake. Since 2012, prices remained mostly the same across the listed Rolex models. That is more than 5 years now that we haven’t seen any (significant) price increase for these models. Looking at all the years prior, that is a pattern that is absolutely out of the ordinary. The Big Mac price however, has gone up consistently. Comparing with year 2000 to 2021, what is the Big Mac appreciation , it is 2.25Xhow about a Rolex Daytona in 2000 a Daytona 116520 is about US$9,600.00. By 2021 if you don’t use that Daytona and keep it as it was bought , it’s a NOS, now you can sell it at $25,600. That is 2.66X.

From the curve, only Daytona can catch up with the Big Mac, second one is Explorer II 16570 say A series. It was about 2.2X  appreciation from 2000 to 2021.

Note that the price is the old watch is highest when it is kept as new (NOS) if that is being used and loss of warranty, price would be drastic reduced. 

HK Snob

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