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Illustration: Aïda Amer/Axios
Leveraged buyout experts Apollo Global Management made the latest move into the red-hot global watch market, taking its Watches of Switzerland brand — an official Rolex retailer that also sells luxury imprints Patek Philippe, Cartier and Longines — public.
Why it matters: Watches of Switzerland's successful IPO shows the skyrocketing popularity of luxury watches is not lost on financial markets. The stock debuted Thursday on the London Stock Exchange at an IPO price of 270 pounds (about $341) and rose as much as 17%.
What's happening: Demand for luxury watches is soaring and supply is not keeping up, causing a gold rush in the industry. Once shunned, second-hand luxury watches are now the watch industry's secret sauce.
The market has taken off to such a degree that used watches sold online in 2018 regularly fetched higher prices than new ones.
The block is hot: Luxury goods giant Richemont, owner of Cartier and Jaeger-LeCoultre, is going for broke, investing nearly $3.4 billion in used watch seller Watchfinder and other online vendors last year. They're not alone.
But, but, but: It's not all good for everyone. Watch sales are slowing in places like Hong Kong and turning negative in the U.K.
Still, there are clearly high hopes for what's to come. "It's no longer a hidden secret anymore," Danny Govberg, owner of luxury watch emporium Govberg Jewelers, told Bloomberg last year. "It has a life."
1 fun thing: The simple yet interesting explanation for why watches are almost always set to 10:10 in ads.
Data from the Federation of the Swiss Watch Industry shows the value of Swiss watch exports in 2018 was $21.2 billion — an increase of 6% in sales. However, it was not without uncertainty, notes Joe Thompson, who writes for wristwatch enthusiast outlet Hodinkee.
"The signs of stagnation, economic indicators and continuing uncertainties at many levels suggest that the right approach to 2019 is cautious optimism," Federation of the Swiss Watch Industry president Jean-Daniel Pasche said in a January press release.
Growth investors have been winning the battle over value investors for some time, but a new report from Bank of America-Merrill Lynch shows that evaluating a company's price-earnings ratio may be losing its value altogether.
As CNBC notes: "Nearly 80% of investors surveyed by the bank use forward price-to-earnings ratio as a factor when investing, making it the No. 1 factor annually, according to the study. Paradoxically, low P/E stocks have underperformed the market since 2010, the study shows."
"It's over," says John Dick, founder and CEO of research firm CivicScience. "Mobile banking should now just be called 'banking.'”
Fresh off President Xi Jinping's signal China could restrict the sale of rare earth minerals, a major component in a host of important technological and defense devices, to the U.S., a team of Chinese scientists announced they had developed a new process that reduces the time needed to extract rare earths from ore.
Why it matters: If the process is indeed viable, it would deepen the world's dependence on China for the valuable minerals and elements, locking in China's dominance in the field, at least in the short term.
Of note: Last week I mentioned that Lynas Corp., one of the most important producers of rare earths outside of China, was eyeing a move to U.S. soil after a fight with the Malaysian government. Malaysian Prime Minister Mahathir Mohamad said Thursday the company's refinery would be allowed to continue operations.