I'm not a historian but I am a watchmaker and I have studied the history of Rolex for some time.

Simply put, for a period of time from the 1920s until the quartz revolution in the mid 1970s, there was no better wristwatch than Rolex.

Hans Wilsdorf (the founder of Rolex) was like the Steve Jobs of his day. He had a very specific vision and he used the technology available at the time to put together a very unique product that was ahead of other brands.

During a time when it wasn't unusual for a brand new watch to lose or gain 30 seconds to a minute a day, he had all of his movements tested by the COSC to ensure they would keep time to within -4/+6 seconds a day. That was unheard of at the time especially considering that the the COSC was founded to certify marine chronometers so that ships would know where they were when sailing the oceans.

During the 1920s Wilsdorf focused on the case of the watch, which housed the mechanical elements. If the mechanical movement of the watch was exposed to water or dirt, it would quickly lose precision so Rolex introduced the first water-proof wristwatch with screw-down case and crown.

Since you still had to manually wind your watch every day or so, this put a lot of wear on the winding crown. This could lead to mechanical failure or simply forgetting to re-seal the watch once it was wound.

This was addressed in 1931 by introducing the first fully self-winding (automatic) movement. Now there was no need to wind your watch every day and there was no other company offering a mass-produced watch with all of these features in those days.

By the 1950s and the time of the Cuban revolution, Rolex had gained a reputation for precision and ruggedness that no other watch company had at the time. It was used for this reason and this reason alone. When you're in the jungle and troop movements need to be coordinated in a life or death war, you want to rely on the best available technology of the day. Today's guerrilla fighters use the Casio F91w for the same reasons.

Fun fact, before the GMT-Master became available it wasn't unusual to see Fidel Castro with not one but TWO ROLEX WATCHES ON HIS WRIST One for local date and time and one for Moscow time.

TL;DR The view of Rolex as a Luxury brand really became prevalent after the quartz revolution of the 1970s made it necessary to "rebrand" precision instruments into luxury items. Before that it was the best watch in the world for the price.

I would like to question the premise of your question that he showed off his rolex. I am not a historian, but I have great interest in Che Guevara and 20th century Cuban history, and I have not heard or read anything indicating that Guevara showed off his rolex.

Not too long after the Cuban Revolution one of Che Guevara's friends, a recently graduated doctor, Oscar Fernandez Mell noticed that Guevara did not have a watch. As such, he gave Guevara his watch (I don't think it is recorded what brand the watch was), which was a nice watch with a gold wrist band. Later Guevara saw Mell again, and Mell noticed that he was wearing the watch he had given him, however instead of the gold wristband, it now had a leather wristband. Guevara gave him a receipt from the National Bank saying that he had donated the gold wristband to Cuba's gold reserves.

Perhaps the Rolex you are talking about is the watch that Felix Rodriguez, one of the CIA agents that helped capture Guevara in Bolivia, took as a souvenir from Guevara after he was executed.

During the Bolivian campaign one of Che's comrades, Carlos "Tuma" Cuello, was mortally wounded in a battle with the Bolivian army. Before he died he gave Che his watch so that Che could give it to Cuello's son in Cuba eventually.

These are the only stories I can recall about wrist watches and Che. My primary source is Jon Lee Anderson's biography on Che Guevara, although I have recalled these from memory so there may be some errors in minor details.

A number of answers so far have been speculative or not nearly thorough enough. Please remember to write an answer that complies with these rules. Thanks!

I don't know if the comment graveyard is full of people trying to say what I'm about to, but it should be noted that Marxism is not necessarily opposed to material wealth. Marxism is opposed to the property and class relations which the capital-owning class use to their benefit, resulting in the exploitation of the laboring classes. Depending on a person's particular interpretation, it need not require voluntary poverty.

Source on the Rolex thing?

In those days, Rolex was indeed respected for its quality and durability. However,it did not have the the snob appeal and status it does today. In the late 50's and early 60's, Rolex's could be bought at many US Military PX's. When Che got his, it cost about $200 new. Even in the the early 1970's, one could by a Submariner, new, at a US Jeweler, for $250-$275.00. Not cheap, but even adjusting for inflation, far less than what a new one costs today.

Oh jeez. Oops. It turns out that he didn't show it off. I should've phrased the question, "If Che Guevara was such a staunch opponent of capitalism, why did he own a Rolex?".