Avoid Counterfeit Watches In Your Collection
Counterfeit watches were quite prevalent in the 1990s. It was not just as simple to identify a counterfeit watch. The shenanigans these unscrupulous players got up to were quite remarkable. Whether you are an experienced watch collector, looking to start off your collection, or like me, just happy to look on, there is something here for you.
The Watch Whisperer (TWW) is our tour guide through these challenging areas of the market. We look at the different facets of collecting watches. The pros and cons of being a classic watch collector, or a collector of modern watches? Both genres have their quirks and here TWW discusses the intricate differences between them.
Enjoy the conversation.
You told me an interesting story about one auction you went to recently. There seems to be a divergence between classic watches and modern watches?
Performance Assets
Yes, it is all to do with pricing. There has been an evolution in the market over the last ten years. Collectible assets have done very well recently. Whether wine, art, cars, or watches; these have been excellent investments. There is so much capital out there chasing all sorts of assets and driven prices up.
After collectors or investors enjoy the initial profits, they tend to continue buying their chosen asset so prices rise. Even five years ago, if you were investing in collectible watches, you were very unlikely to go wrong. Buying a watch as an investment was simple. You could buy almost any good quality watch, and six months later, it was worth more money.
That is the same for any bull market. People jump on board when the prices are moving up very fast. When there is a strong trend, it is not necessary to be discerning about what you buy. That is what I have seen over the last few years, indiscriminate buying.
The Patek Philippe Nautilus Perpetual Calendar has performed exceptionally well as a collector’s piece over the last few years. Especially after it was discontinued.A Pause For Breath?
That said, it does appear that the watch market has stopped advancing. Prices seem to be pretty stable if not, perhaps a little bit weaker in certain areas. This has encouraged buyers to be a little bit more discerning. New entrants into the watch market who do not have such deep knowledge or experience have paused. They realize that it is no longer possible to sell their new watch at a profit. A little bit of panic sets in, and they are no longer so aggressive buying their next watch.
This leads to a bit of a shake-out in the market in general. There is always a cycle in the prices for these watches. A good move up, and then they slip back for a while. This is the same as you can see in the stock market too. This is basic market psychology.
Discernment Matters
Added to this, the collectible watch market is no longer straightforward. Collectors are becoming far more discerning over time. For a vintage watch, buyers want the right vintage with the right history. If we contrast that with five years ago, they would have purchased anything, or so it seemed.
A good example is the Paul Newman Daytona. These watches were the pinnacle of sports watches for a collector, and not expensive watches when they were made. Crucially, these watches were made in small numbers. As a very distinctive watch, the Rolex Daytona is an icon amongst watch collectors and the public. It is one of those icons out there, and people from all walks of life can appreciate it.
For a while, if you purchased any Paul Newman Daytona, regardless of its condition, it appreciated. In the last two years, the market has stabilized, and the buyers are much more discerning. The buyers want to know where the watch’s history. This is relevant because if you can buy a watch from the original owner, that is more valuable now. The result is that poor examples, with damage or replaced parts, are worth half of what they were. The market is becoming very polarized in this manner. Outstanding examples of rare watches continue to maintain their value. Some of these rare examples are worth even more now than they were a couple of years ago. Anything with a question mark over it or is questionable could be worth half what it was two years ago.
New Versus Old, That Old Conundrum
This is good for the watch market because people are looking at each watch in more detail. It also highlights the challenge of the vintage watch market. When playing at this end of the spectrum, it is easy to buy the wrong watch.
When you leave the Authorised Dealer store with your watch, you can be assured that you have an original. The same cannot be said for buying a vintage watch in the secondary market. Photo 42597097 © Tomnex – Dreamstime.comIt is not like walking into an authorized dealer and selecting your watch. When you walk out of an authorized dealer, you know exactly what is in the box. When you buy something 10, 20, 30, 40 years old, the challenge is in authenticating it. This challenge is the same even if you buy from an auction house or a watch dealer. The challenge of authentication is more complicated with watches than with cars. When looking to buy a vintage car, you usually have a registration history to work with. The history of each watch is critical and provides the most information for the buyer.
Why Is The History of Each Piece so Important?
Watches have been valuable for a long time, and this has attracted counterfeit watches. There are an awful lot of counterfeit watches out there. Some of these counterfeits are exceptionally good.
This is an even more complex problem. There are counterfeit watches where the whole watch is counterfeit. Then there are fake watches that also integrate original parts in the construction. These watches can throw the unsuspecting watch collector off their game. In the 1990s, this was particularly prevalent. Unscrupulous watch dealers would take an original watch and make many counterfeit watches. The dealer would take the dial and put it into a fake case with a fake movement. The original movement is then assembled into a watch with a reprinted dial. Finally, the case would be completed with counterfeit parts.
There is another level to this too, where “Frankenstein” watches are created. When a vintage watch becomes worth so much money that a number of lesser watches are cannibalized to create, what the unsuspecting watch collector wants to see. These are very sophisticated fakes and are extremely difficult, if not impossible to detect.
Three Counterfeit Watches From One Original
This way, the dealer could turn one original watch into three. If the buyers were not very discerning, the dealer could triple his money from a single watch. These and other unscrupulous practices went on for a while. This means it is a much more challenging proposition to buy a vintage watch than to buy a modern watch.
This may be one reason why we are seeing the price of some vintage pieces slipping back. It is only the discerning collector who knows what they are buying. This also explains why those who start collecting watches tend to buy modern watches. There are never any questions over the authenticity of these watches.
The Modern Advantage
With a modern watch, you know exactly what you are getting. The secondary markets are also reflecting this recently. I have noticed that there is still massive interest in very modern watches. Watches like the Royal Oak that we spoke about before or the Patek Philip Nautilus and all the new Rolex excel.
Rolex are the leaders for modern watch collectors. They are by far the watches that are the most easily bought and sold.All these watches are worth much more than the list price. As soon as they are in the secondary market, they are easy to buy because you know exactly what you’re getting. That has resulted in a two-tier market. There is a market for collectors of historic pieces and a market for collectors of modern watches.
Trust In Authenticity Brings Value
Collectors in the historic watch market have to study each piece before buying. The value is in the authenticity and the story in particular. Those who collect modern watches may not want to do all the leg work. Crucially though, they do not want to make a mistake.
This is where you see a bit of disparity between the different watches. The market is holding up very well in general. Modern watches, though, are driving it at the moment.
The classic watches are lagging. Watch manufacturers are trying to maintain control over who can buy these modern classics. The manufacturers only make limited numbers, and there are waiting lists to buy. Amazingly, these watches still make it to the auction houses. Because of demand, these watches sell at multiples to the retail price.
Controlled By The Brands?
Many modern Rolex, Patek Philipe, or Audemars Piguet sell at double their retail price at auction. This is very tempting for many people to sell their new watch for a huge profit. Perhaps that shiny trinket on their wrist is not so important when they see the available profit. I guess we may see more of this going forward. It will be interesting to see how the watch companies will try to control this. Or even if they can control it.
This sort of behavior is always happening in any market. There are plenty of people willing to make a quick profit, especially when the profit is so big and available quickly
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Hi Steve – I don’t collect watches but I do have a small collection of what I believe to be Chinese dynastic ceramics, possibly northern Song (or equally possible, cleverly fashioned 20th century fakes!)
So whether one collects watches, Porsches or paintings, here comes the old problem of verification – given the fact that there were copies being made of Song ceramics almost from the beginning (960-1280 or thereabouts). The best pieces went to the Imperial Court, the rest sold to … well, likely mandarins and traders who may have carried them west along the Silk Road. (Needless to say, in modern times, there are entire pottery villages churning them out.)
So how to verify “authenticity”? Some guidelines for those of you keen on such ceramics.
1. Provenance. From X collection, sold by Y dealer with dated receipt, then bought at Z auction in 19xx. Published in W catalog, similar to V in Taiwan Palace Museum.
2. That’s the gold standard. With no such documentation in hand, the task gets more challenging, so we typically begin with aesthetics, ie. “look and feel.” Museum-grade dynastic pieces regarded as being the “real thing” have a distinct form, feel, lustre, weight, balance. Song potters catered to true connoisseurs in the Palace. (Most of the fine Japanese pottery used in tea ceremony since the 1600s were based on Song-era designs and today represent the essence of Japanese “wabi-sabi” elegance.)
3. Mechanics of glaze and firing. But that is starting to get pedantic so I will spare you! (Eg. The foot of the base shows characteristic “sesame seed” marks from stacking in the kiln…)
4. But at the heart of my dilemma is that after extensive research of auction catalogs, museum/private collection catalogs, the standard textbooks, etc. I have not come across any analogues of similar design, shape, lustre, indeed “elegance” which leads me to the question, why would a counterfeiter bother to copy something that is NOT similar to whatever fetched great prices at Sotheby’s and Christies? (But for exactly the same reason, why would an appraiser at an auction house bother to take a look at these “anomalous” pieces?
The Song era was relatively short – first the North and then the Southern courts were ruled by aesthetically gifted but martially inept kings, and their territory was soon over-run by “barbarians” from the interior who no doubt had a bit of fun “smashing dishes.”
There are only about 107 “known” pieces of robins-egg blue Ru ware in existence, but surely thousands of pieces perished in the chaos of “regime change.”
A respected Tokyo dealer recently suggested to me they could be “reproductions,” maybe Republican era, ie early 20th C. But of course, there has been a lot of smashing dishes in China between then and now, and it is only in recent years that Mainland collectors have turned to auction houses to retrieve what is left of these remarkable masterpieces.
In any case, for me, it is an engaging gumshoe challenge to unlock the secrets of these ceramics – a bit like tracing my Dad’s pre-war postage stamp collection which ended around 1937 as he went off to university in Copenhagen. The rumblings of war were starting to be heard across Europe as faces of dictators began to appear on stamps, some of which Dad dutifully pasted into the proper pages. Ten years later, everything had changed, with a dreadful colossal smashing of dishes. Take care, Peter
I love it. The challenges of authenticating old things appears to be the same across many collectibles.
I find the ceramics of the Chinese dynasties very interesting. I do have a appreciation of these ceramics – they were revolutionary at the time. I studied ceramics at school and wrote copiously on the Chinese ceramics at the time. Unfortunately, I have lost all that information but I have not lost my touch on a potter’s wheel – I discovered about six months it is like riding a bicycle!
Thank you for your thoughts. We really appreciate your support.
For sure. I mentioned Porsches because I brought my 1960 356 A with manual sunroof over to Japan, purchased from European Collectibles in Long Beach (the company since accused of misrepresentation and dishonour.) Mine was authenticated by genuine service records and contemporary photos. Sadly it still had the old 6 volt electricals. Liable to fade on even a cloudy day. A Saitama farmer eventually took it off my hands for parts, being part of that eclectic and eccentric world of Japanese collectors. Hurray!