I've never owned a Rolex, and probably never will. I like quality watches, and I like a lot of other quality items... I appreciate great craftsmanship.
With anything high end, a lot of what you are buying is the name. The quality is there, at least it better be, for the price they sell for. There are many things that people claim to be the best quality watch, knife, gun, car etc. There are other makers of high end items that may be of the same quality, but for some reason, their brand doesn't catch on as well, nor do they command as much $$$.
From what others have said, Rolex watches go up in value. That is great, but it certainly doesn't mean in 20 years, they will continue to do so. Who knows, they may even drop in value. There isn't a person alive that can guaranty that it won't happen...
Things go in cycles. I was a serious collector of early Winchester rifles, and Colt pistols. When I started, the prices were still very reasonable. Slowly over time, the prices increased. Then they reached a point where they became rediculous. It wasn't because there were no more of the guns around, and it wasn't because they were so much better than others. Now many of the collectors are getting up in years, and some have passed on. In a lot of cases, their relatives want nothing to do with these guns. They would rather have the cash, and rifles with plastic stocks, and they really don't care about the history aspect.
Many of the prices have leveled off, and in some cases they have dropped. The younger generation isn't as interested in these guns, and they certainly don't want to collect them, so as time passes the value of these guns will continue to drop. The prices are still very high, and for the people that are interested in collecting, they are on the wrong end of the curve. They won't see the big profits when they sell these guns, that many of us enjoyed in the past...
Karda mention Corvettes holding and increasing in value. At one point, the older Corvettes continued to climb in price, with no end in sight. It was actually beyond rediculous. It became a game for people that had more money than they knew what to do with. It wasn't so much they wanted the cars, it was more that they didn't want someone else to have it, and they were paying whatever it took to make sure they didn't get it. Basically acting like little kids, only with copious amounts of money.
Much like the guns I mentioned, Corvettes have peaked, and have been going down the last several years. The thing that is so funny to me is, those same people that over paid for these cars, will now lose money on them when the resale them. Unfortunately, a lot of those people have so much money, it really doesn't affect them.
The newer (2-3 years old ) Corvettes are much better cars than the old cars, and they cost about the same as a very nice 63-67 Corvette. That said, the newer Corvettes are terrible investments. I learned a long time ago to buy what I want and like. Not on speculation that they will be a good investment.
If people want to buy and enjoy something that may seem over priced to some people, go for it. It's your money, and there is no reason they should have to try and rationalize it to others...
I also learned something else many years ago. Just because people wear a Rolex, or drive a Porsche, or have a huge house, it doesn't mean they have money. I know a few people who would be considered very wealthy, and have met others through them. The ones that actually got wealthy on their own, from hard work, and not wasting money, usually don't have expensive material possessions.
People that inherited their wealth, seem more apt to have fancy watches, cars, and houses etc...