FEATURE: Stop Looking at Watches as Investments

I don’t know about you, but I find it just a little bit tiresome now when somebody finds out that I’m ‘into’ watches, because inevitably the conversation always turns to money. I find it kind of tedious to be honest, if somebody tells me they bought a new car I wouldn’t ask them how much it will be worth in five years… and I wouldn’t assume that it should be worth more than they paid for it now, and yet, seemingly every non-watch aficionado is under the impression that watches are some sort of bulletproof investment.

Let me tell you right now, watches in general are a fairly terrible investment. Yes, there are watches that appreciate, right enough. Just as there are certain cars that appreciate, indeed there is a parallel to be drawn between Patek Philippe and Ferrari, but generally speaking modern watches are produced in far too high numbers to become genuinely ‘rare’ and valuable.

Everybody knows about Rolexes from the past which have increased in value many times over, indeed there is a clip on YouTube where an old guy takes his (pretty beat up) Rolex GMT to the Antiques Roadshow and is told that the watch he paid a few hundred pounds for is now worth £50-70,000. And that’s great… but the reason is that he still had all the receipts, box and papers, the works, and because watches from back then were made in smaller numbers and most importantly because there are many people out there who collect Rolex watches, and many of those people have deep, deep pockets.

Rarity alone simply does not equal value. I have a CD single by the Cyberpunk band ‘Sirus’ that is limited to 12 copies, but it is not valuable. Maybe if one day this band gets a lot bigger I will be sitting on something that will appreciate, but at present – no. Because there simply aren’t enough people interested in it to make it valuable. Similarly, I have seen TAG Heuer Carreras limited to 125 pieces for sale in the outlet stores. 125 pieces is pretty low for a watch these days, but it doesn’t automatically mean it will sell out and have a horde of buyers fighting for it on eBay.

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Very limited, but not very collectible and not very valuable.

Any conversation about watches, values and investments inevitably turns to Rolex… everybody knows that buying a Rolex is a goldmine, a cast iron guaranteed, can’t lose ‘earner’, or so they tell you. Yes, some pieces are trading above retail right now, but that is mainly because Rolex limit supply so much that they inflate the market, which in turn is further inflated by flippers, traders and some people’s desire to be seen wearing the new Rolex that ‘nobody’ can get. But these people who are paying several thousand pounds over the asking price are not making a good investment, that super-hot steel Pepsi on a Jubilee bracelet will not be the hot watch forever and eventually it will come down to below the price they paid for it.

And you have to buy the right Rolex, buying a Cellini isn’t a good investment at all, a Sea Dweller or a Daytona is much better and a Submariner even better, but it’s simply not true that Rolex is bulletproof. Similarly two-tone pieces aren’t the great investment either, because the demand doesn’t outstrip supply. If you want a two-tone Daytona you can buy one, no problem. If you want a steel Daytona… good luck with that.

This ‘Rolex’ thing is just getting so out of hand now, it’s as if no one actually buys a Rolex because they like it anymore. I know that’s not true, but there’s just so much hype out there about which Rolex you should buy as an ‘investment’, I even heard one famous YouTube watch guru giving buying advice the other day say ‘It doesn’t matter what you like, this is what the market dictates’. That is such bullsh*t and one of the most ridiculous things I’ve ever heard! Yes, there are a number of Rolex pieces out there that you can buy safe in the knowledge that you will lose almost nothing and maybe even gain on if you keep it long enough, but the idea that your modern Rolex is going to dramatically increase in value as an investment is a bit disingenuous.

But still the nonsense persists, YouTube pundits scream that the Batman (the blue/black bezel GMT) is going to be discontinued, buy it now and reap the rewards in years to come! What happened at Baselworld this year? They didn’t discontinue the Batman at all, they just changed the strap… People say Rolex are geniuses at playing the market, but they don’t need to be, they say precisely nothing, and in the absence of information the watch community makes things up for them. Meanwhile people clammer for their product and they keep the supply lower, way lower, than demand,  which further creates the illusion that the product is unattainable and a sure fire winner.

I was talking to someone the other day and the conversation somehow turned to watches, I’ve known this person for over thirty years and I never knew he had a watch collection (well, he has some watches, I wouldn’t call it a collection). I haven’t seen his watches but one of the watches was a TAG Heuer, one was Gucci and another was something else, and he was convinced all these watches were worth more than he paid for them new. He may be right, at least on the TAG Heuer, but I wouldn’t say it was a good investment… much like Rolex, over time if a brand keeps the same model range the price increases with inflation and your old watch may catch up and pass the original list price only because the new price has gone way above and dragged the pre-owned value up behind it.

This works particularly well for Rolex because a) they put their prices up regularly, and b) because Rolex don’t change their range every five minutes, so you can be sure that if you buy a Submariner today something very similar will be available in ten years and it will have gone up significantly compared to yours and dragged the value of yours up with it.

But look, why are people so obsessed with watch value? Most watches don’t appreciate. I don’t think any of my watches are a good investment. I bought my Aquagraph for £2100 in 2013/14, even at a supposed 33% discount that watch is probably only worth £1500 maximum today. My Carrera Heuer 01 is worth about the same as I paid for it, but only because I bought it at a 20% discount… and they are starting to drop below the £3000 mark now.

Most brands are not good investments, some pieces are ‘better’ than others but overall there are better places to put your money if you want to invest. But still the hype persists. A friend of mine always asks me what new watches I’ve got and he’s always disappointed when I tell them it’s not going to be a good investment. Again he seems to believe that Swiss watches are some kind of bulletproof investment, but his modern Formula 1 is probably never going to be worth what he paid for it again, at least not anytime soon.

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I know nobody wants to lose money on watches, I’ve lost a chunk myself buying and selling a Grand Carrera and a Calibre 16 Formula 1 – and it sucks! But I didn’t buy those watches expecting to sell them, I bought them because I thought I liked them and it turned out that I didn’t like them enough so I cut my losses. But watches are supposed to be an emotional purchase, they are supposed to be personal, they are supposed to be part of you. Patek Philippe advertise their watches with the tagline ‘You never actually own a Patek Philippe, you’re merely looking after it for the next generation’, they don’t say ‘Buy our watches, some of them will double in value in ten years.”

Do you really want to be that guy who buys a Rolex Submariner, not because he likes it, but because it’s not going to lose him money? Because it’s the ‘right’ watch to be seen wearing? Isn’t that a bit sad? I have nothing against Rolex but it seems rather like they are the watch for the guy who has zero imagination. I’m sure I’d rather talk about watches with someone wearing a Breguet or a Zenith than someone wearing a Rolex. Which is too bad, because some of those guys are genuinely interested in their watch and the brand rather than just thinking of it like a gold sovereign.

Watches are something very special and it pains me that people reduce it all to perceived value. Truth be told if you want to grow your money, don’t buy a watch, any gains are likely to be heavily impacted by service costs and when you come to sell, how do you think you are going to realise this amazing price? Unless you are prepared to sell it yourself – with all the risks that brings – you’ll end up trading it in for something else and losing on it, or selling it to a dealer outright and losing even more.

So when you come to buy your next watch, buy something you genuinely like. Don’t care about what anybody else thinks, or what Instagram tells you is ‘hot’. Ugh, Instagram is nothing but a cesspit of bullsh*t and circle-jerking where people post the things they think they should because it will get them the most ‘likes’ rather than things they actually like. Case in point, Vacheron Constantin is mud on Instagram, so keep posting those AP Royal Oaks cos that's what gets your likes up!

The Breguet Type XX

But I digress, must be time to wrap this one up... so yeah, my collection is probably a financial disaster, but I don’t really care because I really don’t want to sell it. And look at it this way, if the watch you really like is really a terrible investment, then buy it pre-owned and take advantage. Be smart and play the game well. Or buy it new and keep it, or buy a Submariner and impress your friends with how financially astute you are. It's up to you...