On collecting Watches and the Art of Patience

Lately, watches have become a major subject of discussion from Instagram, web sites, coffee shops, one to one discussions with advisors, and likeminded people. Watches have become quite a passion for many, especially ones who recently got into the fascinating world of horology. Nowadays almost every country in the world has few private watch clubs. Watches have become such a captivating subject that complete strangers after having a discussion on watches tend to become friends.

As every subject has a history so does Watches, lets travel back to time and its 18th century, humans have made marvelous progress in technology, and refinement of the pocket watch is one of them, by this time pocket watches were still reserved for few and amongst its clients were monarchs, industrialist, tycoons, and anyone who had money and was curious enough to own a piece of handmade marvel which could also tell time. Let’s fast forward and its post-second World war and by this time we have made the transition from pocket watches to wristwatches, watch brands could produce more watches and due to enrichment of capital accumulation more and more people could own and wear watches on the wrist. Now the brands have started advertising and so on. Then after few decades came the quartz crisis which almost annihilated the Swiss watch industry, many heritage brands went bankrupt and few held on, but in sum almost all mechanical watchmakers started producing quartz watches at least during these difficult times. Now, let us bear in mind that in the universe of wristwatches the current Vintage Era begins from the mid-’80s and during this quartz crisis we were still in past. During 1970’s few aficionados started trading in pocket watches due to curiosity and partly due to the love of horology, though this was a very small community and it stayed as it was for years to come.

 Let us understand the digital space and its impact on the cosmos of watches. We will take Instagram as a benchmark and assumingly call this era pre and post-Instagram

Below is a simple flow to make this more legible

Pre Instagram-Era

Watch Industry – watch lovers –world population - the majority was indifferent to watches – retail sales- demand and supply was balanced

Post Instagram- Era

Watch Industry – watch lovers – a big percentage of the Instagram population started to like watches and now want to own watches and fast – retail sales/ online sales/ speculators/ grey market – demand and supply goes south.

Pre Instagram, we had web sites, discussion sites, Facebook, printed books, selected private watch clubs, and a big thriving watch loving society and it was growing at a very stable and steady rate. Now what has happened post-Instagram that few million people who were not into watches got exposed to watches, and all of a sudden want to own watches and yes they don’t want to wait, the new audience is financially well off than their predecessors and are willing to pay more than the retail price to get the watches faster.

 This started new genre of sellers we now call “flippers”, now flippers sole aim is quick profit booking at your cost, hence to source watches and then mark them up and selling to new buyers who pay a premium on retail price to get these watches. Flippers have been around in art world, cars, real estate, and now in watches. In short, they have a single aim to make money out of you.

 Official retailers are the ones who invest in growth of brands and at times for decades, they invest in opening of stores, sales team, training, stock, advertising, marketing, employment of salesforce,  after-sales and always sell at retail price and don’t overcharge on retail prices. The official retailer guarantees that the watches being sold are authentic and not of dubious nature. Unlike other sources where one buys watches and later finds out that it’s a pre-owned watch which after polishing has been sold as new. Official retailers are the gatekeepers of integrity and value if you are looking for one.

Now, what we must understand is that Swiss watches industry is not a smartwatch hub, as smart watchmakers are able to churn out millions and millions of watches each year. Most Swiss watches are traditionally made and require the priceless labor of human hand; hence there are always less watches and more wrist who demand watches. This has resulted in price of certain brands and references to skyrocket and on the other hand, many watches are available at very high discount. What has pulled the price of few watches up and not others. Well, many factors like the brand, its story, history,  past auction results, articles by respected authors, what the social media influencer says about it, which celebrity wore it and so on.

Then came in a new term which is pretty new to the world of watches “Investment “, when I started my career some 20 years ago, people were buying watches for the love of it and not for investment and even today the majority of watch lovers buy watches purely for the passion for its craftsmanship and age-old tradition, as for investment you have your shares, bonds, business, gold, real estates and so on. Though, lately in many conversations, one could hear about the term “investment” in watches. Although we don’t have any official index on watches which states that watches are tools for investment, maybe in a short span of time as financial world calls it “speculation” but we don’t know what will be the long term effect of this, only time will tell.

Now that we have wrapped a brief background on historical viewpoint, lets now move on to the collection of watches.  To make things easy I will not talk about any brand or any hot reference which is so much in demand, as it might turn out to be a biased observation.

Let’s ask a fundamental question, “why do we collect watches” and “what is the motivation”? As mentioned earlier people have been collecting watches for centuries. I will simply put two factors and that’s Awareness and Wealth. Earlier too people had money, but either they were just not interested in watches or their interest dwelled in collecting other objects of desire like cars, paintings, and so on. However lately the Artwork has become very expensive and all major Art either have been in ownership of government, institutions, or individuals and many are just holding on to them, this has driven up the value of existing Art pieces. The investment instruments, share market, mutual funds, bonds, real estate, require time and patience, and recently it had been fluctuating a lot, meaning if you have invested in stock for short term then you will end up losing money. Just as Warren Buffet stated that to be a “value investor” one must stay invested for a long period of time. However, in watches at times the return is guaranteed with profit immediately but only for specific references.  You can ask any flipper, and they will tell glorious tales of how quick money was made, this reminds me of short term gains during  real estate boom pre 1998 where people simply kept on flipping, till lots of money was lost post “the great depression”.

Collecting watches is more of a scholarship and requires good understanding and learning, when I say understanding I mean real knowledge and any real knowledge takes time to build. It takes years of learning, patience, reading, discussions for one to become an ace collector. We come across people who call themselves collectors but when we hear term “collector” we expect much more, I want to hear the passion, stories behind each piece owned, about movement, complications, the watchmakers, brands, and so on. Sadly most of the conversation revolves around the hot pieces and references as if its more of a race to collect these sought after watches so that when the right time comes, how one can make money out of it, or how one day this unique collection will be auctioned by some famous house and bring in tons of money and glory to the owner

So, what to collect? This has been a fundamental question asked many times and the web, magazines have loads of content on this. Collecting watches is one long journey, recently I was speaking to a gentleman who knows watches and knows so well that he builds grand complication with his own hands for one of most respected brand, he mentioned that no collection of watches is complete without a split-seconds pocket watches. Now, this opened a new subject altogether and launched us in a much deeper conversation which lasted in consuming a few big mugs of coffee.

One has to ask the most important question, “ Why am I buying this watch “ and the answer will come pretty straight forward, is it to wear, keep in safe, pass on to next generation, sell at auction and the list can go on. But only by reflecting, one can get a lot of clarity.

A senior and respected collector whom I know for years and who have been collecting watches for decades is more of a scholar on watches. He has a very interesting habit, once a week he sits in this watches room and winds each and every one of the mechanical watch, and sets the time, this exercise takes much the off day for him given to the generous collection of watches, but then he comes out more relax and thoroughly enjoys not only collecting watches but also the interaction. He knows each and every watch in the collection, the year he purchased them, the retailer, the brand and its history, the story of that specific reference, the movement, the batch it was delivered in, and so on. Now for me or anyone who genuinely loves watches, this is a delight, something which the words can’t express and something which the flippers will never understand.

Just a few decades earlier a middle-income man would buy one mechanical watch in his lifetime and will wear the same watch over the years and one day will pass on this watch to his son or daughter. Now, we have much better and more disposable income which gives us the pleasure of own various watches.

Collecting watches is a beautiful pleasure and requires lots of patience, no matter how fast or efficient we are, a day still has the cycle of 24 hours, the moon has 2 cycles every month and the earth will move on its axis completing the term in 365 days. Collecting watches is patience for me, exactly like building pieces of Lego masterpiece, one block a time. 

References

https://acfineartsite.com/images/rockwell/watchmaker.jpg

https://www.fhs.swiss/scripts/getstat.php?file=histo_regions_200707_a.pdf