I’m a contrarian. If I see boosterism in any asset class I want nothing to do with it. Im also a degenerate collector and when I see cheap treasures I want in. As I have learnt since I was a child, the things I want to buy because they are cheap tend to explode in value a few years later. That’s been good to me in financial instruments but as a addicted collector that is no good because like a Bitcoin Hodler, I cant be parted from my treasures for any money but I can’t by more because they have gone up so much the investor in me won’t let me acquire more.
So a long time ago when I was bright eyed and bushy tailed I got bitten by the watch collecting bug, in those days a second hand watch sold for 10-20% of its retail. In the late nineties a $30,000 Patek could go for $3000 to $5000 at auction and they were moreish. Lets just say it was a nice opportunity for the long term investor, but it also must be said Apple stock was selling for a couple of dollars a share back then adjusted for splits, so the stock market is still hard to beat when it comes to investment opportunities.
After a bit of a wait, the market for collectible watches duely exploded and it boomed, bubbled and is now in the classic bust phase. It doesn’t matter if its stocks, crypto, tulip bulbs or watches, the boom, bubble, bust cycle is consistent, assets go up like a rocket and down like a rock and watches are now in the down like a rock phase.
This is great news for some, because every bust leads to a bottom and bottoms are often long drawn out and filled with opportunity. That’s a wonderland for the true connoisseur, which is what us degenerate collectors like to call ourselves and the auction houses tag us as, when they don’t smell the whiff of an ‘investor’ in our activities. A bust is also an opportunity for those who could never afford to board the horological train because the tickets were either sold out or the tariff was way out of their reach. Now however, lots of lovely baubles are coming to daddy!
This reset would have happened anyway, but with the current global economic set up, unless the result is high inflation, the luxury end of the global economy is going to go into deep recession and money is going to be too tight for the mass adoption of the hyper-luxury trend that has wound up over the last decade. Watches have been swept up in this pump and dump, but for the hardcore collector, rather than the greed driven investor trader, the dump phase can be a boon. A lot of that hyped up luxury stuff is going to blow back into the hands of people with liquidity at rebased prices and watches are not going to escape that.
The time for value investing in watches is coming and there will of course be a moment when the real masterpieces will be available at the same price as the trash that will be liquidated willy-nilly as happens in all crashes. That will ge the time to pick up investments for the next cycle or a moment to pick up that apex status watch you just want to own but can’t currently afford.
The price bottom will be when the market stabilises for a year or so, as such there is no rush to catch the watch falling knife. The trick is to keep an eye on auction prices and wait for them to stabilise and keep your ears open for the cries of anger, pain and capitulation coming from folks who got sucked in at the top. That is the signal to get greedy. Hold on to the fact that markets that crash normally take a long time to recover, so be as cold as a polar bear on beta blockers. There is no rush so wait for the right piece and the right time to strike.
While I have opinions on what watches will stand the test of time, pun intended, I have roped in Andrew Morgan one of the leading aficionado of watch collecting and key Youtube watch influencer, to come up with 6 watches at 3 price levels for would be investors to watch out for as the crash takes its course. I’ve picked three price ranges: Starter, luxury and Haut Horology, roughly less than $10,000, $10-$30,000, $30,000 and above.
So don’t imaging you can necessarily buy these watches now in these price ranges. The point is, if prices continue to fall they may get into these ranges and if they do, its worth keeping track of them to try and gauge the bottom and if you actually miss the very bottom, that’s not something to worry too much about because, the climb back in value will be long and slowbut in the long term very good.
Two classic entry level watches
A lightly used Rolex Oyster Perpetual is effectively currency at this point. It’s not going to bring enormous, spiky gains, but sit on it for a while and it’ll constantly creep up like prices of the steel it’s built with. They’re actually getting a bit easier to buy new, which is largely the cheapest way to do it, so put your name down on the list and then sit on it.
A Breitling Top Time from the 70s or 80s in good condition is a watch that can quite happily go toe-to-toe with Rolex’s much-loved Daytona, yet—for now at least—its prices remain well under where they deserve to be. Chances are as the collector market inevitably surges forwards once more, these watches could well get caught up in it.
Two Luxury watches
The recent re-revival of Daniel Roth by LVMH has started to turn the spotlight on the brand’s earliest works of the late eighties and early nineties, which—especially when considered against modern Daniel Roth’s RRPs—remain surprisingly undervalued. But those prices are creeping up, and opportunity with it, so don’t miss out on getting in at the ground floor.
Having been the originator of some of the greatest innovations in watchmaking, many collectors consider Breguet to be languishing in the Swatch Group roster. The withering resale of its priciest pieces is evidence of that, however turning trends are bringing attention to the old man’s door. A $40,000 Breguet Tradition can be purchased for well below $20,000, and it’s not likely to get any lower.
Two Haut Horological watches
Accused of being a one-trick pony, Audemars Piguet concocted the code Code 11.59 to add some diversity to its stable—with a mostly unfavourable response. As time has passed and rage subsided, however, it turns out the Code 11.59 isn’t as bad as they said it was, and so flaky resale is showing signs of improving. If you missed the boat on the Royal Oak, the Code 11.59 is still in the dry dock waiting.
Laurent Ferrier Galet Square
The opportunity to own an immaculate creation from the hands of a master watchmaker with Patek Philippe pedigree sounds like an unfathomable accomplishment, however Laurent Ferrier’s reserved looks and vintage charm have kept it firmly under the radar. Challenging resale on the art deco Galet Square make it a ludicrously tempting proposition, with every opportunity for it to deliver dividends in the future.
I’ll add one to Andrew’s list under the Haut Horology section, The Patek Phillipe Perpetual Calendar Chronograph. To me this is the classic of classic and at auction has fallen back under $100,000. This is a might amount of money for a watch but while exorbitantly’ expensive upstarts have sprung up left and right in the last few years, it is basically one of the original grail watches and will remain as such.
Personally, I’m hankering for minute repeaters, and one day, sure enough there will be one on my wrist care of the economic turmoil that seems destined to sweep the globe in the next few years. As this new chaotic era kicks off it is a time to not only keep your powder dry, but to start stacking it for the moment when the fire sales kick off.
Every cloud etc…