‘I am not sure if I am going to pass him on the left hand side or on the right hand side. But one thing is clear. I am going to pass him.’*

This is what one Brazilian billionaire said more than a year ago when talking about overtaking the world’s wealthiest person, Mexican Carlos Slim. The billionaire analogy is fitting of what happened this weekend. Let me explain.

The brand with the crown ‘The worlds most valuable watch brand‘ seemed to be on a solid path towards perhaps one day passing the undisputed king of the watch auction market, a family run, private watch firm otherwise known by the initials PP.

The best evidence of this took place just analyzing two watches that were sold two days ago. The 2499 vs. a Daytona 6263/6239 Paul Newman dial. They both achieved similar prices despite the 2499 being a very rare watch. They only made 349 of the ref 2499 which is perhaps the most collectible and beautiful of all Patek wristwatches and certainly among the most Iconic. They made many thousand of the Daytona although the lot that sold for CHF 1m was a very rare example.

Sure another 2499 which was in Pink Gold and incredibly rare, sold for almost CHF2m, but that is besides the point.

Rolex clearly has momentum behind it.

While the Daytona auction was expected to do well (it was Christies first themed sale in more than 10 years and was put together by the worlds leading Daytona experts), the next day provided further evidence that vintage Rolex is becoming the Warhol of the watch market.

Wether submariner, Day-date, or Milgauss, vintage Rolex models were extremely sought after. We cannot think of many watches that sold for within their estimate range. It was usually far above that.

So what explains the tremendous interest in vintage Rolex?

We talked to one leading expert who pointed out something pretty obvious. In fact it was so obvious that we were caught off guard. He said ‘its pretty simple. Rolex is a tool watch. One that is extremely wearable on an everyday basis. You can wear it with a polo shirt but also with a suit. It always looks good. It is sporty. It is durable and if you get a scratch or two on it, it doesn’t really matter.’

Try banging around a Patek 2499, or a Vacheron or Breguet (not a type XX obviously) and the outcome will not be pretty.

Lastly one comment on the general vintage watch market as it related to the auction results.

We are somewhat bewildered why everybody is shocked by the strong prices witness in the past few days. Unless you have been living on the moon, and not opened the financial newspapers in a few years, what happened is perfectly rational. Vintage watches are just part of the tangible asset category that has benefited from cheap money available around the world (Mrs Yellen it seems is likely to extend the party).

A 63 carat pink diamond sold last night for $83m at Sothebys. A Francis Bacon sold yesterday for $142m (becoming the most expensive art work to be ever sold at auction). 

A balloon dog by Jeff Koons sold for over $50m. A few months ago a rare 275 GTB NART Ferrari sold for nearly $30m.

It does not take a degree in economics to figure out that as long as interest rates remain near zero and the credit markets are stable, that tangible assets and collectibles like art, diamonds, classic cars, coins and vintage watches will benefit.

* The Brazilian man we quoted is Eike Batista, a commodity billionaire (or now ex-billionaire). Shortly after the quote his commodity empire collapsed and just one week ago his main company OGX Petroleum was forced to enter bankruptcy protection.

by Edmond Saran