Pepsi: Which Should You Buy - The Rolex or the Drink?
Source: A Blog To Watch
You might be thinking, another random comparison again? How is a $1 Pepsi drink comparable to a $9,000 watch in any way? You’re right, it’s not, plus a soda is not even something you can invest in. You buy your beverage, drink it, recycle the can, and go about your day. Unless the price of aluminum skyrockets, there isn’t much money to be made.
However, you can invest in Pepsico stock. Pepsico is a global conglomerate that owns brands ranging from Pepsi drink products (Mountain Dew, Gatorade, Tropicana, etc.), to Frito-Lay products (chips, pretzels, Cheetos) to Quaker Oats (pancake mix, syrup). And luckily enough, it’s traded on the US stock market under the ticker PEP. As of the time of writing this article the cost of one share of Pepsico stock is $148.
Rolex Pepsi vs PepsiCo Stock
Image Source: Raymond Lee Jewelers
Many of you are familiar with the Rolex GMT Master II “Pepsi”, it garners its name from the two-tone blue and red bezel reminiscent of the colors of the Pepsi logo. That watch currently sells for $22,700, on the grey market, a pretty penny for a watch that retails at $9,700. Now it wouldn’t be fair to compare Pepsi stock today to a watch that will immediately rise in value at the time of purchase, so let’s go back to 2018 when the watch first released for more of a fair comparison.
The Pepsi GMT launched in March of 2018. At that time, Pepsico stock was around $106, and the Pepsi GMT had a retail price of $9,250. For the price of one Pepsi GMT you could buy around 87 shares of Pepsico.
Fast forward to 2021 and the current market price of the Pepsi GMT is $22,700, while the current market price of Pepsico stock is $148, so your 87 shares would be worth $12,876 today, a far cry from the $22,700 of the Pepsi GMT. The Rolex Pepsi posted a gain of 145%, while the drink company only gained 40%. Does that mean the Pepsi GMT is the better watch to buy? Not necessarily.
Image Source: Getty Images
The first issue, obviously, is getting a Pepsi GMT at MSRP. Without a sizable purchase history of watches or jewelry at an AD, it’s nearly impossible to get a Pepsi GMT at retail, this will force many to turn to the secondary market to buy one. Now that’s where things get interesting, if you purchased a Pepsi GMT on the grey market at release, you would’ve spent around $21,100, cutting your returns to just 8%. With this in mind, Pepsico stock is looking like a much better investment.
As with any investment the purchase price matters just as much as the selling price. If you’re able to get an asset, be it a piece of art, stock of a company, or even a house at a discount you can make great returns. It’s impossible to predict how prices for assets will move in the future, whether that be up or down, but if you can buy something for less than what you think it’s worth, that’ll allow you to better make money.
Image Source: Everest Bands
While purchasing a watch at an AD for MSRP is one great way to get the Rolex Pepsi below market value, it’s not the only way. Leveraging collector networks is also a great way to buy a watch for less than market. Many collectors are willing to sell watches at a discount to other collectors that they know will enjoy and appreciate the watch as much as they did and not seek to flip the watch for a quick profit.
If you manage to find a good deal on a Pepsi GMT or are already a lucky owner of one, please head over to the Everest Bands website and consider picking up a strap for it! Still thirsting for that Rolex Pepsi? No worries, we have tons of watch accessories that pair perfectly with any watch.
By: Joshua Jiang
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