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
Example text from Andrew here: Andrews says the Bilbo chrono is great, while it current costs about $xxxx when the market hits lows this is a piece that will still attract watch orcs from around the world once Sauron gets his ring back. (can be as long as you like really, within reason.)
Two Luxury watches
Two haut horological watches
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. Every cloud etc…