Buying a vintage watch at auction is fraught with pitfalls. The first challenge is to work out what price is reasonable for the watch you have your eye on. Next, you run the gauntlet of confirming the watch is authentic.
Having purchased over 100 watches at auction, our friendly watch collector has some great pointers on what to look for and what to avoid. But first, we look at how volatile the price of these vintage watches has been recently. It was quite a surprise to me!
Vintage Watches MORE Volatile Than The Stock Market
We discussed the Paul Newman Daytona previously. Can you give an example of the price range for these? What were they at the peak, and where are they now?
Five years ago, you could buy an excellent example for between US$50,000 and US$80,000. Three years ago that that would have increased to approximately US$250,000. Particular examples are worth more, and some are worth less. We are talking about a typical 6239 or a 6262. Now though, they are changing hands for US$100,000 or so. You can see how volatile the market has been over five years.
I see this happening a lot. In particular, I have seen it happen with Heuers. They had a meteoric rise when the market realized that they were significant and made in relatively small numbers. As a result, many Heuer watches appreciated tenfold over five years.
TAG Heuer helped to drive this movement. It built the heritage museum and put a lot of resources behind the historical brand. This has helped them promote the brand more generally and sell modern watches in particular.
The Story Matters – For The Brand And At Auction
Many collectors now appreciate how fascinating the history of Heuer is. However, this does not prevent market forces from remaining in place. Like everything else, when something goes up too fast, it tends to come back down too. So, watches that appreciated tenfold have probably fallen 50% or more.
I think this pattern has repeated itself many times over the last few years in the watch market. It has become a fast market, with prices moving considerably year to year.
If I were doing this just for profit, I would ideally have sold my whole watch collection three years ago. I would be delighted now. The trouble is I do this because I love watches. As a result, I become attached to many of the watches I purchase. So even though I suspect that a particular watch may go down in price, I still keep it in my collection.
It Is Not All Just About Price
I did have a feeling a year ago that prices were going to go down in general. But it is not just a simple price calculation like in the stock market. If I sold a watch based on price, I would want to replace it in the future. I have to question whether I would be able to find another with equal provenance. So price is just one consideration in the collection.
I think that is a crucial point of differentiation between a dealer and an active collector who buys and sells watches from time to time. I get stuck on certain watches. After all, I bought them because I love them. Of course, it is nice to make some money out of them, but I still love them just as much when they are worth ten times what I paid or valued at the same price they were 20 years ago.
Vintage Watch Auction Strategy
You have said you prefer to purchase watches directly. Do you also attend auctions with the intent to purchase? How do you select the auctions you attend?
That is quite simple. If there are certain watches in the auction that I like, that gets my attention. Indeed, once you have been a collector for a while, the auction house understands what you want and will send the relevant catalogs to you. Quite often, I receive these massive catalogs on my doorstep. Currently, there seem to be more every month. It is quite a time-consuming process to go through them. But the auction houses know their clients well, so I also receive an email from someone at the auction house indicating a specific lot I should have interest in.
Complete Your Work Before The Watch Auction Starts
This means the auction house is doing its job very well. They tend to highlight the lots that I would naturally be interested in. But, then, I ask for more detailed information because there is very little you can see on auction day. You get a chance to view watches before the auction if you are there in person. However, if the auction is on the other side of the world, it may not be possible to attend. In this situation, I will typically ask for a detailed portfolio of pictures and ask questions about the watch. All the work is done before the auction. It is most important not to drink too much of the free wine before the auction. This will help prevent becoming excited during the bidding – but not always!
When you ask the auction house for more detailed information, what specifically are you looking to receive?
Most often, I want some very high-resolution, detailed photographs. However, there is a lot I can learn from these photographs. For example, the serial number is significant; it can tell you where the watch was originally sold.
Not all serial numbers are the same, so this can be a good indication of authenticity. In the sixties, it was popular to use a pantograph to engrave the serial numbers on the watch case. If you look at these engravings under a loop, you can see how they were engraved. In many cases, you can see if there was a peculiarity with the pantograph. For example, sometimes, a particular operator has a specific technique, and all the watches from that period might have a number eight that is slightly uneven. Interestingly, that idiosyncrasy will be consistent over all the watches from that brand of that period.
Counterfeit Watches Make It To Auction
The value here is that many people try to counterfeit watches or produce new cases. It is not difficult to make a stainless steel or gold watch case that mimics the old watch with today’s technology. It is not that hard to produce a dial. Although I think counterfeit dials are slightly easier to spot if you know what you are looking for, but certainly not easy. I would not trust myself to discern a fake dial. I ask people who are much more knowledgeable if I am considering buying an expensive watch.
If you receive very high-resolution photographs from the auction house, you can typically rule something in or out very quickly. This is similar to buying a car. A very high-resolution picture of the chassis number and the engine number will tell you a lot.
Any good auction house will gladly provide photographs of these key elements. Of course, if they will not provide these photos, then that is a big red flag. But, in general, everyone I know in the market is very aware of these things, and it is straightforward to take high-resolution, digital photographs that show you everything you need.
Original Documents Are Rare In Vintage Watches
Do you ever ask for any documents or other information for a particular watch?
Sometimes, some of the watches have the original documents, but they are rarer than you may think. This is because many of these watches were handed down or sold many times over the years in the vintage watch world. You have to remember a lot of them were not valuable when they were new. So people did not often keep the certificates. That is why a watch with papers is much less common than you might imagine.
It is not the most important thing, but it is nice to have the original purchase receipt, the original papers. That is something truly exceptional. But for the watches that I have bought over the years, I would say 80% of them did not have papers. So I rely a lot more on looking at the watch itself in detail.
Provenance Is Important
Knowing the provenance also nice. If the watch comes from the family of the original owner, that is always good. It is important to record this information and verify it as much as possible for the future, especially if you intend to sell the watch in the future.
In many cases, you can have watches issued with archival papers. Whether it is Patek Philip or Audemars Piguet, most of the big watch companies have a record of every watch they ever produced. Longines has excellent archives as well. You can take your watch into one of their service centers for a modest fee, have it inspected, and issue a certificate. The certificate can tell you where the watch was manufactured, the specifications, and often where it was sold. You usually are not told who it was sold to because that is private information, but certainly where it was sold and when it was sold.
Vintage Watch Auction Strategy 101
How many auctions are you typically attending each year?
It just depends where you are. You can do a better job sitting at home on your laptop these days. But, on the other hand, it is fun to go to the auctions because it is much more of a social occasion. I invariably know quite a lot of people there. But unless the auctions are in your hometown, it is not always practical. The other problem with attending in person is, even though I think of myself as a professional, I know it is easy to be swept up in the moment in the auction room.
Whereas, if I am sitting at home at my desk behind my laptop, that never happens. I know exactly what I want to pay. I have bought hundreds of watches over the years, but I can see why people spend too much at auctions. People often do. Even as somebody with some discipline and practice, it is still very easy to get carried away.
So you have been swept up and overpaid?
A couple of times. Yes. But I do not know whether I necessarily overpaid because it was something I wanted to buy. My preference was to purchase it for less, but that does not necessarily mean the price I paid was bad value. By and large, if you want that watch and the price goes up at auction, somebody else wants it as well. So it does establish a market,
Auction Prices Drive Vintage Watch Values
How important are those auction prices for the market?
Pretty important. They are the big headline numbers everyone looks at. Because so many watches trade privately for all sorts of reasons, the auctions set benchmarks. Not everybody wants to talk about or make it obvious how much money they spend on a watch. They may not want to tell their wife or have their colleagues at work know.
The strange thing with vintage watches is the value is not always obvious. A fantastic example is a Rolex Submariner. You can look at a tatty Rolex Submariner from the fifties and sixties and think that it is worth a lot less than a new one. Yet is it is worth half a million or a million dollars. So the value is not always obvious from just looking at the watch. For many reasons, many people like to keep their purchases and sales quiet. But the auction prices do provide a market barometer and benchmark because they are verifiable. When a dealer sells something, you can not verify the sale price. That is different at auction, it is a public forum, and the auction houses publish the hammer prices. That is why values tend to be driven by auction results.
Next time out we are going to look at some of the stories behind The Watch Whisperer’s favorite watches. Can you guess which brand it will be from?