Can luxury watch prices predict luxury stocks? The Morgan Stanley hypothesis.

Morgan Stanley publishes quarterly reports with WatchCharts tracking 35 Swiss watch brands. Their core thesis:

"Tracking the price evolution of secondhand watches is interesting for equity investors, as it provides a good barometer of a brand's desirability and thus future pricing power/growth trajectory."

The popular version, amplified by YouTube channels and Reddit threads, pushes this further — treating secondary watch prices as a leading indicator of luxury stock movements. "Just sold my Submariner, rotating into LVMH" is treated as market signal.

Does it actually work?

The descriptive claim (watches = brand desirability) is probably valid. But the predictive claim — that watch prices lead equity returns — is a much stronger assertion. I spent this past week building a rigorous quantitative test of that stronger claim.

TL;DR: 3,030 statistical tests. Zero surviving pairs. The signal doesn't exist.

Two layers below:

• This Week in Journal — a quick summary of what I built and tested
• Detailed Research — the full methodology and findings

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→ This Week in Journal — quick summary of the build

→ Detailed Research — full methodology and findings