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Humans are status-seeking creatures, and status is expressed through signaling. If you're rich and so are the people around you, money alone ceases to be a differentiator. Ultra-luxury brands appeal to this by adding hoops that money alone can't clear: time, loyalty, relationships. The signal shifts from "I can afford this" to "I was invited to spend my money here."

Lines outside Louis Vuitton are more down-market, aspirational luxury - an ultra-wealthy person wouldn't be caught dead queuing on a sidewalk. Patek and Ferrari operate at the level above, where the signal isn't wealth but access. (HBS calls Ferrari's version "deprivation marketing.")

Is it a game worth bothering with? Enough people think so to sustain billion-dollar brands.

(Of course, PG writing an essay about being too smart for fancy watches - while knowing a lot about them - is its own signaling game, just aimed at a different audience)

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Status is a tool for the working wealthy, but ultra-luxury brands are only appealing to a subset of wealthy people.

There’s a great number of people with 100+M and even far beyond that who enjoy nobody knowing just what kind of wealth they have. This doesn’t mean looking poor, but there’s plenty of value in anonymity.

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He’s probably also too rich for fancy watches to actually be a useful signal of wealth amongst his peers.
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The price isn’t keeping anyone at that level of wealth from buying a Nautilus or a Lange 1 or a panda Daytona. But they can still flex with ultralimited pieces like Zuck’s Greubel Forsey.
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I didn't realize that "fools and their money will soon be parted" was a flex.
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“There are three of these things made in a year, and I’ve got the juice to get one of them” is. Zuck doesn’t care about a million dollar price tag, any more than I would care about a couple bucks.
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>>> ...PG writing an essay about being too smart for fancy watches

Stealthy, like a submarine.

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While the ultra rich do buy from luxury brands, they're often spending the most on unique items, such as ordering a custom yacht.

Having the most expensive item in some category, or close to it, often gets you news coverage, which is something a normal purchase can't really offer.

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I know I’m being sold something when someone declares the science of human nature.
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Actually in many cases it is for social KPI storytelling. I know some wealthy people and at gatherings they love to tell 5-10min long stories of exclusive processes that they followed to gain something exclusive while dropping names and numbers. The processes are easy to understand for the entire social circle (i.e. not technical or business achievements which they can't easily disclose).
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Being wealthy solves virtually all problems of consumption, so the invisible hand provides new problems to serve the market need. Beautiful, really.
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It's a formalized, sanitized simulacrum of striving! Like sports is for competition
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So, hobbies. You're talking about hobbies.
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No, he talks about status signalling.

They might pass the time doing those things, but not as a mere passtime or hobby, like if they were sewing or playing CoD. Unlike those, doing them and telling about doing them serves a specific social purpose.

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I'm not arguing with you - you have a valid point.

But I don't view hobbies as that separate from status signals within the hobbying group. Oh you play games? What games? Did you beat it? etc etc.

Esoteric knowledge/practices here are status signls (Oh you reached shattered planet without xyz??).

That starts to sound a lot like "Oh you aquired a lambo XYZ without usual steps abc" and that's a really fun convo in the in-group, and a total miss with the out-group.

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>But I don't view hobbies as that separate from status signals within the hobbying group.

The difference though is that this is not meant to serve "within the hobbying group".

They serves the status signal purpose when showing them to "laymen" and other rich people in general, not necessarily to other expensive car buyers or luxury watch buyers.

In other words, the, typically quiet, flaunting, is done to people otherwise uninterested about the specific ting, that nonetheless recognize the exclusivity and the knowledge that it's a subtle signal of "elevated taste" and that they belong to the tasteful-rich club.

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I have several hobbies, and none of them revolve around artifical scarcity or gatekeeping.

(Well, the way that _some_ people play Magic: The Gathering does - but I wouldn't want to play with anyone who raised a stink about proxies)

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Look, I dont want to be argumentative, but my (perhaps cynical) view on people who say they don't do status signaling when they "avoid status signaling" is it's just like the fish who goes "what's water"? It's worth thinking about whether you're doing it by accident.
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"Let's see Paul Allen's card"

https://www.youtube.com/watch?v=KlYH-hmxOqc

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I wonder if it's intentional that they all say "Aquisitions", with no "c".

As for fonts etc: https://hobancards.com/blogs/thoughts-and-curiosities/americ...

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They all have the same phone number too.

This could be explained away by them working for the same place and assuming to contact them you call the same switchboard and ask for the person, but even back in the 90s it would have been strange for wall street "Vice Presidents" (even if it was somewhat of a ceremonial title) to not have their own unique business number.

Also, Paul Allen giving his card to someone else with the same contact number for the purposes of being in touch to plan to play squash doesn't make much sense unless you get meta and assume Paul Allen was aware this had no practical value and just wanted to ego-drop the card.

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Economists have a term for these kinds of things where the demand rises as prices rise: Veblen goods

https://en.wikipedia.org/wiki/Veblen_good

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Buying unnecessary expensive stuff is one thing. But it's hard to understand why anybody would want to display that total loyalty to a brand signal.
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Harley Davidson, anyone?
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"There is only sex. Everything is sex" - Robert California
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It taps into a very primordial "I'm better than you" urge some people need.
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>I've heard other brands do this (Ferrari?)

It's called relationship-based allocation or more simply purchase history requirement, and its practiced by both Patek and Rolex but add to the list famously Hermes, Bugatti, high jewelry from VCA/Bulgari etc, getting access to prestigious artists at galleries, etc.

The devil's advocate/ other side of the coin is that it's not just a moneygrab, it protects the brand image by controlling who is seen wearing / using your products. When the value of these goods is so influenced by who else has them, that kind of control is intrinsically important for the seller.

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It's exclusivity and sales schticks. Artificial scarcity, social status, conspicuous consumption. Same things that drive influencers to rent limos, pose on other people's private jets, pretend to buy bottles in clubs, flash fake cash, wear bling.

From a birds-eye view it's less a hedonistic treadmill and more a feeding frenzy.

It's a game you can play, but for the life of me, I cannot comprehend why you'd want to, there are so many other better things in life.

>>> Why bother?

Exactly - go give someone you love a hug, that's worth infinitely more than flexing an expensive watch.

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Because the people bothering are precisely those that want to differentiate themselves from those who'd rather stick to their Casios :)
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Ah, so these products are useful to me after all!
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Genuinely. All fashion, all accessories, whatever you put on your body is a signal, even if you don’t intend it to be. Your outfit is a costume, and so is everyone else’s.
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Clothes, wristwatches, cars, you name it. It's a very common play on luxury brands, Hermes Birkins is the most famous that comes to my mind and follow a very similar playbook.

Apart from the KYC aspect of the process it's their way of solving the problem of artificial scarcity on the second-hand market as the article explains. They want a second hand market to exist to indicate that this is a luxury item, but too many and the price tanking with excess supply.

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It also solves the real problem of labor scarcity. If you have X master watchmakers available to make a halo product you can only get so much output from them. You can increase X, increase production efficiencies (reduce labor input), or limit supply. The first two reduce exclusivity and perceived quality so the third makes sense if you can live without growth or can grow via high pricing strategies.
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> Casios

I've got three Oceanus watches (Casio's boutique brand). I never wear them, anymore, because of Apple Watch.

I brought a couple of them in Japan. There, the G-Shock brand is very popular. They sell G-Shock watches for ridiculously (to Americans, who are used to cheap G-Shocks) high prices.

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Anyone with $(80,00-250,000) (which is a lot of you) can buy a Nautilus today[1].

This status-through-martyrdom ritual to get it from retail at MSRP is utterly bizarre.

[1] https://www.chrono24.com/patekphilippe/nautilus--mod106.htm

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More and more I realize I am completely obvlious to all of the class signaling happening here. I couldn't imagine spending that much on anything, let alone a watch. And I certainly wouldn't think someone wearing that did, either.

I feel bad for the folks who pick up on stuff like this, that must be a heavy weight to bear constantly comparing yourself to other people.

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Ironically a desire for such social signalling requires being poor enough that you believe the item is worth a vast and near unobtainable amount of money making it seem like a very impressive signal to you. That’s what makes these items desirable. As in these signals can be a sign of just how poor you are as opposed to how wealthy.

A classic case is when you observe teenager targeted status signalling trends. This can be as low value as an expensive shirt, ie shirts branded ‘supreme’ costing $300 which isn’t worth signalling to anyone who pays rent or a mortgage. But to a teenager? Wow man $300! such status!!! On the flip side if we see someone above teenager age wearing such teenager targeted status symbols we reasonably subconsciously assume they live with their parents and have very little income.

This continues up the wealth chain forever. Status symbols are invariably a way to see just how little people actually have because the person wearing the status symbol clearly believes the value of what they are flaunting is impressive.

Status symbols aren’t a signal of how much money you have so much as signal of what you believe to be an incredible amount of wealth to flaunt.

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Well framed. I will add though that it's not entirely indicative of how much one thinks is a lot; it can also be, as was explained to me, that for ultra wealthy people, the price, at any magnitude becomes a rounding error.

half a million for a car sounds absurd to me, but it's 0.5% of $100M. Compare that to $50k car on a ~$200k median net-worth US household.

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> I am completely oblivious to all of the class signaling happening here.

If you're comfortably middle class and in a demographic recognized to "deserve" to be middle class, then you can afford to be oblivious to a whole lot of class signaling. You aren't striving to reach a higher station, and you aren't likely to get demoted out of your current one, so you can mostly ignore it.

People that are lower-class and trying to move up, or in demographic categories that are often shunned access to higher social classes don't have that luxury and are incentivized to be savvy to this kind of stuff.

This is one of the kinds of things that people talk about when they talk about "privilege". It's not that you should feel bad because you don't have to worry about this stuff. It's just an acknowledgement that some people have the privilege of not having to worry about this stuff because they were born into a level of class security that others lack.

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>I feel bad for the folks who pick up on stuff like this, that must be a heavy weight to bear constantly comparing yourself to other people.

You can have that heavy weight while living on the suburbs or even the ghetto too. The objects are prices mostly change with the wealth level, not the game.

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I dunno, I'd probably spend that much on a house.
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Holy shit that's an ugly watch too, looks like something outta chinatown lmao.
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It being an "acquired taste" is part of the appeal. A lot of high-end stuff is ass-ugly on purpose. If everyone liked it because it simply looked nice, you couldn't tell who's "in the club" of other rich people. Brands will attach elaborate stories and histories to objects to make people feel cultured that they have invested time in acquiring the knowledge, but really it comes down to in-group object recognition.
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My least favorite of that eras Gerald Genta designs. The original Royal Oak is comparatively far more attractive. Both are outdone by the 222 (different designer though), but it's all subjective.
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Ads for Patek Philippe on the back of The Economist get more and more annoying over time. (e.g. the president writes "How Happy I am to be a Nepo Baby")
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I just want low maintenance cars. Everything else is a waste.
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> Why bother?

ego, of course

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Vanity. Ego is something else.
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> ego, of course

This is so silly. Do you really not have any hobbies where you spend inordinate time or money on things you could objectively accomplish quicker and cheaper, but having less fun, in other ways? Like, I ski. It’s a silly way to get up and down a hill in the 21st century.

I’m not a watch guy. But mechanical watches are beautiful. There are idiots who buy them. But that doesn’t mean everyone who does is an idiot.

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Collecting watches isn't a hobby, it's pure consumerism. Sure many hobbies have (recently?) gotten way more people spending top dollars for no reason but with watch collecting there's nothing else. You're not tweaking the dials, you don't know how to make the watch, you just watch it and wear it while a technologically superior version is 500 times cheaper. There's also no natural shortage of them, they can make a trillion of these watches.

At least with cars or audio equipment there's some marginal benefits once you get to crazy numbers, not the case with watches.

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What is wrong with watch consumerism? It isn't like it's ruining the planet and hurting anyone. Like you said, there is no shortage and nobody will die without them.
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We can say all the same things about cars, but nobody thinks it’s odd that there’s a status culture about cars worth more than $75,000.
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Because that’s only 2-5x the price of a new cheap car.

A watch at $80,000 is what, 10,000x what a new cheap one is?

But good for them! It’s really hard to be angry at them for buying said watch without it being some form of jealousy.

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> nobody thinks it’s odd that there’s a status culture about cars worth more than $75,000

Sure. To each their own. I drive a Subaru. I don’t think it’s weird that others like a nice car. (I also think there are douchebags who drive both.)

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> Strange game, the only winning move is not to play.

What a tired aphorism. Just like PG's 50 year old insights.

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