As I continue down the rabbit hole of mechanicali watches, questions of collectibility, value retention, and even value appreciation are all but inevitable.
At least they are today. In a way unknown to collectors of the 1980s and prior, today’s collector community cares far more for the market price of their collections than ever before, which in turn has lead to a flight to quality over quantity. Rather than obsessing over the ownership of every variant of Speedmaster, Calatrava, or Daytona under the sun and ultimately amassing hundreds of examples in the way that, say, butterfly collectors operate, the world’s most affluent investors in this somewhat obscure but rapidly growing niche increasingly prefer to own the mintiest 2915, the most pristine 2526, and the sexiest 6239 they can get their bidding cards on, but just one or perhaps two of each instead of dozens and dozens.
Much of this can be attributed to the broader impacts of the Information Age and the resulting availability of auction and sales pricing data, but the winner-take-all effects inherent in our highly interconnected and interdependent era are also driving this flight to quality. The net result is an increased emphasis on provenance to combat increasingly advanced “frankenwatch” techniques like laser welding that can return tattered examples into like-new examples with only the seller the wiser,ii at least until the marketplace matures and comes to appreciate restored and even improved wrist watches the way the car industry already does.
But I digress with the evolution of collectors – what even is a “collector” ? Heiii can really only be one thing : a pathological deep diver of subjects (recall my taxonomy of deep divers) swept away by the love of objects and an unquenchable thirst for the rare, unobtainable, and ultimately unique.iv
While this collector might posture about value retention, or even value appreciation, in a hyper-inflationary world such as the one we’re whizzing about in, the elephant in the room of opportunity cost never enters the conversation for the simple fact that value maximisation isn’t their motive force.v
Opivi are written about the prescient (and for some reason frequently Italian) collectors/dealersvii who bought what are now USD $300k PNPNviii for $3k the late 1980’s, but no one pits that 100x return against the 1400x return investing in $AAPL over the same period would’ve yielded. Both are unlikely, sure, and not really one moreso than the other, but that elides the social element. Only watch (or art or car) collecting has any chance of garnering the applause of your peers and granting you the social status you so deeply lust for, because seriously, no one likes a braggart who just brilliantly invests in equities (trust me), even if there’s still a hell of a difference between $300k and $4.2mn! Even when these socially valuable pieces of jewelry are so precious that they inevitably become safe queens, save the odd insta-capture, they still trump numbers on a screen for emotional and social impact.ix
But that’s still something! When you have your old friends over to your house, no one digs into their safes to pull out stock certificates or bitcoin paper wallets so that your friends can oooh and aaah over how many zeroes you’re “worth.” That’s not how the human brain works! We want our implied valuex to be accompanied by beauty,xi rarity, and provenance all wrapped up into one object! Admittedly there is some overlap between the four, forming a Venn diagram of sorts, but having just one or two of these traits does not a status symbol make. We need all of them.xii
So what function does a collector serve ? They weave beauty, rarity, provenance, and implied value together into a tapestry that they then share with like-minded individuals. They act as curators of history, treasure hunters in search of worlds only whispered about. This social and historical value is hugely important – it’s what differentiates collectors of objects from collectors of numbers on a page – it’s the difference between a publicly enjoyed and a privately enjoyed fiction.
There’s something very beautiful, and very noble, about it all.
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- And not just mechanical ; incredibly, even quartz! Particularly given my experience with “higher-end” mechanical watches thus far, I have to say that I’m thus far thoroughly unimpressed with their ruggedness. My IWC Portofino, at least, is as fragile as a osteoporotic femur. But Pete, you say, it’s a “dress watch” and should always be treated like a delicate flower, worn only to elegant balls and dinners with the Queen.
Fuck. That. I’ll use my shit however I damn well please! And if it can’t do it’s very basic job (keep time accurately and consistently) while I race cars, chase kids, climbs mountains, and vigorously talk with my hands, what fucking use is it ? Pray tell, what fucking use ?! After sending in the IW356504 for a 4-week warranty repair because it was running 50 seconds fast per day in less than a year of (what I’d consider to be) normal use, it’s again running 20+ seconds fast per day just two months after coming back. It’s going back in for more repairs, so help me, but I’m also now shopping for more shock-resistant watches, and hopefully ones that aren’t completely uninspired.
In this vein, Richard Mille unfortunately (or fortunately given the price point) failed to impress on first impression, as did FP Journe’s CDN $15k quartz piece, the Elegante 48*, but that still leaves several more affordable and less showy options for hopeless pragmatists like me who, y’know, actually like to wear their watches. Then again, with my active lifestyle, maybe I’m effectively crashing my cars into brick walls and wondering why they’re always in the body shop… More experience will tell!
Though now that I look back at these wrist shots from April, the men’s Elegante isn’t as bad as I remembered! Might be time for another look with wiser eyes. After all, we never walk into the same river twice, and the lume on this FP is stellar.
- Talk about a lemon market. [↩]
- The collector is overwhelmingly, yes, male. Irrespective of what’s being collected, it seems for all intents and purposes to be a man’s game. Perhaps it’s the inherent promiscuity of the sport that drives us ? [↩]
- Collectors should not be confused with mad scientists, mind you. While both acquire objects of staggering value and in diverse quantities, the former at best admires and shows-off the object while the latter disassembles, reassembles, and attempts to improve upon it. Both are diving deep into their subject matters, but the former is primarily performing an emotional and social function while the latter is pursuing an epistemological need. [↩]
- Take this example of Roman Sharf‘s recent YouTube interview with Bob “The Buddha of Vintage Watches” Maron :
Roman : Why are we talking about vintage pieces ? To rebuttal [sic] one of the things I’ve said in the past that “watches are not an investment but an expensive toy.” But there are a few minor exceptions. And if you want to see some of those exceptions, if you want to see some of the most rare stuff in the world, this is really the place to be, there’s no other place in the world that I can think of other than Sotheby’s auction where you can actually get yours hands on rare pieces such as this. [...] I’m going to let Bob tell you why vintage watches today are indeed an investment and show you guys some of the craziest stuff you have ever seen.
Bob : The watch manufacturers today are basically remaking the classics of their past with a few exceptions and those exceptions are the ones that are selling for them. The best Pateks made today, the best Rolexes made today, even the best APs made today, are remakes of watches from the past and my money would rather buy the early watches that were not manufactured as collectibles versus the stuff today that is manufactured collectibles. I think there’s a dramatic difference between the two. The difference being – I hope this doesn’t come out wrong – the old money has their watches [money?] in old watches. The new money tends to put their watches[money?] into new, modern collectibles, manufactured collectibles, and when the taste changes from those watches, those watches tend to get dumped back on the market – not all of them but a good portion of them – and so the curve of a modern watch looks something like this [parabola]. The curve of a vintage watch looks something like this [exponential curve upwards] because vintage watches were made at a time when a lot more care and craft went into the watches, they were not made in great quantities, and they’re not making anymore of them. There are always going to be new collectors, new clients that appreciate the past, the originals, and as a result, the demand is going to increase while the supply won’t.
While owners of gold doubloons would foolishly make the same argument today, until such time as VR is omnipresent and able to digitally duplicate the status conveyed by high-end mechanical wristwatches, art pieces, and classic cars, Bob’s proposition that there will always be new collectors to drive up the demand of fundamentally scarce collectibles is correct. Those of us in our 30’s and 40’s with resources to spare are paying increasingly close attention to the wonderful world of these little mechanical marvels, some of the best of which are buried in the past, though thankfully most of which come to market with regularity. [↩]
- Such as this one by Ben Clymer. [↩]
- My gut tells me that these “Italians” are Sicilian mobsters making sport of this art-like niche (not that there’s anything wrong with that!), but there are at least some accounts of these influential collectors being young and largely idle landed aristocracy from Turin, Milan, and other areas of northern Italy closer to the epicentre of watchmaking in Switzerland. [↩]
- PNPN = Paul Newman Paul Newmans. Apparently Cool Hand Luke had a thing for this one watch and now they’re a big deal or something. [↩]
- Of course, there are always those who write their own stories. Those who patronise the arts, personalise their abodes, commission pièce unique watches (or at least *gasp* engrave them), customise their cars to suit, and who seemingly destroy the market value of the objects in their possessions, but ironically these bespoke and less universal journeys are of considerable value and fascination to many collectors. For every collector seeking old-new-stock condition, there’s another two seeking to accumulate the stories of those who lived with (and loved with) their objects ; those who fashioned their own stories not for sport, but rather for self-satisfaction and self-fulfillment.
- You’ll never see me use the term “inherent value” when discussing investments for the simple reason that there’s no such thing in my book! Value being “inherent” falsely presumes a universal that can never exist. [↩]
- As with human beauty, what increasingly drives values in the watch market is condition. Just as most men would rather a beautiful 16-year-old blonde maiden than a 57-year-old prostitute who looks like she’s been hit by a bus full of dicks, watch collectors pay many, many multiples more for untouched examples, particularly for vintage pieces, of which the 1950’s and 60’s are currently en vogue. [↩]
- Just to compare the different types of collectors and collections, I’ve compiled this little spreadsheet, in case dear reader is on the hunt for a new passion project (and for my own future reference, so I can see how my opinions of these categories and categorisations evolve over the years) :
You’ll note that I’ve included fiat equities and bonds, as well as “alts,” as sub-categories of the big daddy. Because that’s how categories work : the less able tag-alongs are lumped in with the ne plus ultra.
Of course, there are also collectors of wine, netsuke, stamps (like Bill Gross!) and everything else under the sun, but the above are just the areas that I have at least a passing knowledge of, so if you’re more cultured in other areas of collection, please chime in below in the comments to let us know how they compare! [↩]