If only back then I had...

Rondo 11/2011

The price curve for wristwatch icons is rising—with no huge leaps, but as steadily as good clockwork. This is what Gisbert L. Brunner found when analyzing the past 20 years.

This bit of knowledge sounds banal, but it’s true: everything is clearer in hindsight. “If only…” can be said with equal justification. If one had invested one’s entire fortune in mechanical wristwatches (the right ones, of course) in the 1970s, one would now definitely be a millionaire.

The same is even true for the late 1980s. If one had taken the plunge at the legendary auction on the occasion of the 150th anniversary of Geneva’s top-of-the-line manufactory, Patek Philippe, the money invested would have multiplied many times. Many people had the right intuition—but others didn’t.

It’s the same with wristwatches as in other realms: the perfect moment doesn’t reveal itself on its own. One has to have a feeling for it. And when the moment is right, one has to be willing to spend one’s more or less hard-earned or saved money. Of course, wristwatches aren’t everyone’s passion. Someone who invested his money prior to March 2000 in German standard stocks instead of in watches could really celebrate. The German stock index, the DAX, climbed to dizzying heights. The closing value on March 7, 2000 was 8,064. In 1969, it had been a mere 489. The increase in value was a whopping 1,649 percent. But only for those who sold off their shares at the right time. From then on, the market has fallen. At first slowly, but then faster and faster.

Investment in wristwatches results in a different calculation: in 1961, specialized dealers demanded precisely 1,915 German Marks for a gold split-seconds chronograph from Patek Philippe, reference 1436. In November 2000, when the DAX was already falling, the happy earlier purchaser of the chronograph could have sold it for 400,000 Marks. The value had increased by more than 20,000 percent. A valid objection is that the timekeeper had paid no dividends at least not in cash. But the daily pleasure in a wonderful companion on one’s wrist is worth something, too.

Paul-Newman-Hausse

Another example: in the mid-1970s, the non-Rolex “Daytona” with the coveted and nowadays often-forged Paul Newman dial sat almost like lead at the concessionaire’s. American dealers liked to comment “not a genuine Rolex” when explaining the massive discount offered. A buyer could have had it for $1,500 at that time; today it’s worth 30,000 Euros.

To remain objective: such increases in value are absolutely exceptional. And so when it comes to investing in watches, the question always arises: what to buy and what not to buy? But there is no question about the most important guideline: quartz wristwatches are precise and comfortable, but are very seldom good investment objects.

The past, present, and future belong to the mechanical watch. And even here, one must distinguish between standard calibers à la Eta 2892 or Eta 7750 and watches from more exclusive, proprietary manufactories. The idea that all mechanical wristwatches increase in value on principle will someday prove mistaken. There is no question that their value is markedly more stable than consumer electronics, for example, but here, too, it’s a fact that most of what is offered loses substantial value as soon as it’s worn.

Those who place their bets on limited Rolex Submariner editions ought to analyze very precisely the reason for the quantitative limitation. Limited editions without a good reason for limitation should be taken with a grain of salt. Here, as everywhere in buying watches, there is no substitute for sound information.

If you want to gaze into the future from a secured position, you should go for true classics. These are established models from well-known brands that, apart from occasional product optimization, are produced more or less unaltered for years or even decades. This minimizes the danger that you’ll end up the victim of a passing fancy, which often leaves one widowed if one marries it. Explosive profits are out of the question with such watches. But the increase in value that nevertheless comes results from the fact that the ticking objects of desire become more expensive with predictable regularity.

More than doubled

There are plenty of reasons for this: rising material costs, wage increases, inflation. Plus changes in currency relations, as the Swiss franc is currently proving quite impressively. The examples shown here could not be clearer. Added to the fact that the prices for one and the same model have quite generally more than doubled between 1993 and 2011 is another aspect that shouldn’t be underestimated: the fun and prestige of wearing a signed watch on your wrist. This is clearly more valuable than the pure, often very sober world of numbers.

Because of the iPhone and its consorts, fine mechanical wristwatches are not, strictly speaking, absolutely necessary for anyone; they are primarily purely emotional. And emotions are hard to give pecuniary figures for, whether in dollars, euros, francs, or yen. Watch aficionados who buy with passion because they enjoy it will seldom go wrong.

Gisbert L. Brunner