It was an intense weekend. 72 hours of auctions, previews, following over 500 lots. But what a great weekend it was.
If the auctions are a good indicator of how the vintage watch market is doing (many collectors have a problem with this correlation), I can say with confidence that the vintage watch market is very healthy right now.
The strength of the market has certainly caught me by surprise to be honest.
The Art and Classic car markets have been weakening further this year and I thought the vintage watch market would weaken too. It showed signs of weakening already last November but what a comeback it made. The results were strong across the board, and across many brands not only Patek and Rolex – the two leading horsemen.
There were a few trends I noticed this time. Lets go through them.
- Themed sales if done right – work magically: I have to take my hat off to Phillips and Pucci & Co. The Epic 88 steel chronograph sale was, excuse me for the silly pun, – EPIC! What a superb success! What explains the superb auction results? The watches were broad and included many brands. The watches covered all price ranges. The quality was strong. Market this package together with a superb book with exceptional photography and you have a winning recipe for a successful auction! 100% of lots were sold at the chronograph sale (much like the Day-date). I am surprised why other auction houses have not been more active in offering themed sales. Congratulations to Bacs and the entire team at Phillips.
- Collectors paid up for quality and rarity: Multiple new world records were set and Phillips alone had six watches sell for over CHF 1m. All of these watches had one thing in common. They were rare and the quality was superb. One watch which best represents that collectors rightfully recognised quality in my opinion was the Rolex 6202 Turn O Graph in the Phillips general three auction (with black dial). It was a top pick of mine, and I did predict correctly that this watch will be fiercely fought after. Indeed it set a new world record for a black dial turn o graph by far. It sold for 6x the low estimate for CHF 75’ooo – an incredible price. The watch was simply superb – the best 6202 I have ever seen. The dial was flawless – perfect glossy and superb luminous matching the hands. Another example where collectors recognized quality and paid up for it was the superb 3448 Patek perpetual calendar at Christies that sold for a new world record of CHF 630’000. Again it was a rare dial variant and collectors recognised its quality and importance. For more an in-depth review of the 3448 please see here.
- There were some relative bargains to be hand even in the thematic sale: Think about this. The most ‘watched‘ auction house in watches (and the clear leader now) puts on a themed sale. Steel Chronographs. A topic that speaks to the heart of so many collectors. The whole world had plenty of time to study every lot and still some exceptional bargains could be had. How could this be? Well it shows you that there is always opportunity. You just have to be ready and courageous. The deal of the entire sale in my view was the Ulysse Nardin Chronograph that sold for CHF 22’500. It was a flawless watch with huge character and the most perfect dial you can imagine. It had extremely rare military type hands found also on car instruments of that era. A very smart NY collector walked away with this beauty. Even a 1940s Longines with Flyback function and 13ZN movement sold for slightly below the high estimate before commission – apparently snapped up by a well known dealer. Also the mighty Paul Newman 6264 (among the rarest of all Paul Newman references and featured in the holy bible of Daytonas – Pucci Pappaleo’s book) sold for CHF 179’000 well below the high estimate of CHF 200’000 and well below the levels of the last Daytona themed sale in 2013. Another relative bargain in my view was the hyper rare and beautiful 6234 Rolex with a flawless dial that sold for CHF 221’000 against a high estimate of CHF 240’ooo. I promise you- in the private market this watch is trading for substantially higher amounts. It was another clever buy in my opinion.
- Collectors are becoming better informed than ever due to social media: I was astounded about the knowledge of the collecting community. Collectors for the most part recognise quality better than ever before. I know of at least 5 different WhatsApp groups where collectors exchange live information on watches and share their views – sometimes even during a live auction! This helps collectors avoid mistakes. Some of these WhatsApp groups have collectors from four different continents and so whenever there is an auction in HK, NY, Geneva, London – if your in such a WhatsApp group you don’t even have to physically inspect the watches – a collector can offer his view and share it. This is an incredibly powerful force in the watch collecting community. The power of social media is being used like never before to the advantage of the collecting community. Just recently another young French collector rightfully corrected me on IG as I had mixed up ‘rail’ dial with ‘radial’ dial concerning GMTs. Collectors have a knowledge that is incredible.
- Younger collectors are becoming active: This gives me the most important reason to be optimistic about the vintage watch collecting future. I met one young man who is only 19 – an Italian (what else). Lets call him Mr. A. Mr A impressed me immensely: He did his research meticulously, inspected every lot closely during the previews and had a strategy in his head. He successfully bid and won on three watches. They were all vintage pieces. What a superb pleasure to meet him and witness such a young collector at work (if you can imagine – he successfully bid and won on the first Audemars automatic tourbillon). He also secured a Blancpain fifty fathoms and a Rolex submariner. This man, if he continues, will be a second Goldberger in the making. What is even more crazy is that he was not the only young collector to win a bid, there was another man probably even younger bidding and winning.
- Dealers were unusually active this auction season: I noticed an unusual amount of dealers bidding and winning at auction this time. I cannot help but think that this helps the broader watch market. Prices were for the most part very fair and dealers took advantage of that opportunity. I cannot recall the last time I saw so many dealers win lots at auction (this was only observing the behaviour in the room – I assume many dealers were also bidding via internet or telephone lines). Why is this so healthy in my view? Because it means prices were fair and not overly exaggerated for many lots. Dealers only buy when they see room for profit and can pass on the watches at higher prices.
- Collectors winning multiple lots: It may be nothing new (I know this happened in the Daytona themed sale in 2013) – but I noticed it for the first time again in a while. In the themed Chronograph sale – I know of at least 3 collectors who bought more than two lots each. One collector bought six lots out of the 88 watches for sale. These are collectors and not dealers. I am not sure if this is positive or negative for the market. I just thought I would point it out.
- The numbers are getting larger: A watch that sold for CHF 1m used to be quite a rarity a few years ago. The auction room would turn silent and everyone would be focused on that big number on the screen. Today it is quite common. Phillips alone had 6 watches reach over CHF1m in their May auctions and Christies had three of them. I have heard at least 5 private treaty sales of watches costing more than CHF1m already this year changing hands too. CHF 1m is not a large barrier anymore for a wristwatch to cross.
- Many vintage brands were strong: Yes Rolex and Patek were top lots at the Phillips themed chronograph sale. But other brands were sought after at the Auction 3 sale of Phillips and also at Christies general sale (which also explains Christies high sell through rate at 93% for their auction). Audemars, Breguet, Heuer and also Universal (a brand I know much too little about) did very well. The fact that all brands showed strength speaks for a healthy vintage collectible watch market.
- Some interesting statistics: In the Chronograph themed sale at Phillips – 80% of the top 5 lots in terms of value of the Chronograph sale was Rolex. Patek just made it into the top 5 at the last place. Think about that. Chronographs are a complication – one that Patek is extremely well known for – especially in steel – and the top 4 lots are all Rolex in terms of value? Rolex hype? Time will tell. In the general sale of Phillips – things reversed again with Patek claiming 4 of the top 5 lots and Rolex making it only once in the top 5 watches sold – with the 6062 black dial at Nr 4 of the top value lots.
These are the main trends I saw.
Concluding thoughts
What does the strong auction results say about the health of the vintage watch market? As I said in my opening comments – many collectors don’t believe the auctions are a good indicator of future prices and the health of the watch market. I don’t agree with them.
I think the auctions are a wonderful indicator at any given moment in time. And in this moment in time I believe the vintage watch market is healthier than many other collectible asset classes like Art or classic cars.
Having said that I think what happened this May though is special. The quality was higher than last November or arguably last year and quality attracts strong prices. It always has and it always will.
The quality this time came partially from one big collector. Without naming the auction house or naming watch models – I know the following for a fact: Nine watches of the entire Geneva auctions (including Sotheby’s, Antiquroum, Phillips and Christies) sold for more than 1 CHF million. Four of those nine watches came from one collector. That one collector contributed strongly to the results of one auction house. And that one collector decided to sell some trophy assets.
Does this collector see something we don’t? Is he cashing his chips in while the market is strong? Or is he just selling for other reasons?What does this say about the watch industry? We will never know the answers to these questions. Just food for thought.
What does the future hold for vintage watches? Thats a tough one to predict.
My instinct tells me that we might still see some weakness down the road. The ability of dealers and auction houses to find top quality is getting more difficult. This is a fact. Most collectors I know are holding on to their trophy assets. They know that the opportunity cost of money is very low right now.
I personally think that most collectible asset classes move together. Therefore vintage and collectible watches might face some uncertainty near term and a correction might take place. It would even be healthy. Longer term however I see a very bright future for watches. T
hat young Italian collector Mr. A convinced me of this.
On a side note: In case any of you are wondering what I have bought at the auctions (not that I normally disclose this right away) the answer is nothing. Zero. Nada. Nichts. Rien.
I did have my sights fixed firmly on a target. What I did NOT really have was a good strategy how to secure this lot other than having a maximum high bid in mind, which in retrospect, was illusional. I was completely outbid (it was that bad that I did not even have time to raise my paddle) and had to walk away. After doing further research I found out – that I simply did not do my homework well enough. I did not understand the pricing of the watch reference well enough. It was a tough defeat as this the very first time that I did not pursue a lot I had in mind.
Whenever I set my mind on something I have always secured that lot. Always.
When the auctions were over and I rushed out to catch my flight home – a well known dealer and friend asked me how the auctions went? I said fine but I did get what I had wanted. He said something very wise.
He said, ‘sometimes you win by not winning at all’. At first I didn’t appreciate his comment – still bitter that I left defeated and empty handed in Geneva. But the more I thought about it the more I realised he was absolutely right.
Not winning at times – not only is part of the game but it allows you to go home and reflect. Study what went wrong. Reflect on what happened. And in the end I think this is part of collecting. You win some and you lose some. I think losing is also part of life (unfortunately) and I am sure the best collectors in the world can tell great stories of how they have lost along the way.
Winning next time around – will be all the more sweeter.
NB: For our auction analysis last year in 2015 please see here.
