This is the third part of our interview series with our unknown watch collector, the Watch Whisperer. These blogs aim to chronicle the exploits of a committed watch collector. Someone who not only loves watches but approaches watch collecting as if he were investing in the stock market – but more fun! We all have plenty to learn from a gentleman who has perfected his strategy over the last 35 years by buying and selling watches from every conceivable corner of this earth and curating his collection in the process. We are honored each time he agrees to speak to us, share his knowledge, and allow us to enjoy his world vicariously.
So Far He Has Spilt The Beans On
In the first part, we discussed his watch collecting ethos and how he differentiates between a watch collector, a collector of watches, and a watch trader. The difference may be semantic to some, but these distinctions are crucial to being a successful watch collector.
The second part was a dive into the Watch Whisperer’s early days and his first watch. This discussion led us to explore the process he follows when considering the purchase of a watch. The lengths he is willing to go to in order to understand the watch before purchasing and how the internet has transformed this process is remarkable to understand. The level of detail achieved in charting a specific watch’s history will be enlightening to anyone who seeks to emulate his success. The level of scrutiny a credible watch collector will put any watch under before purchase requires a completely different mindset and analysis, a world away from a journey down to the local watch store.
What is evident is how much the Watch Whisperer enjoys the history of each watch. He revels in each watch’s stories and delights in the rarity of each piece. What is clear is that this is not an area you want to jump into without doing your homework.
Watch Collecting And Portfolio Management
But how to decide when to sell – it is all about portfolio management. The interview continues…
Steve
The next obvious question to me is that after you have done all this research and have your collection, it cannot just increase; at some point, you have to sell? How do you reconcile that with being a watch collector rather than a trader?
The Watch Whisperer
That is an interesting point. It is probably a fine line between a watch collector and a dealer from my perspective. A dealer or a trader is purely in it to make money, and this attitude is evident in both the watch market and the car market, where I have seen it many times. Often these are very knowledgeable individuals, and there is nothing wrong with taking this approach as a professional. It is no different from any other career. From my perspective, I think they lose something as their motivation becomes less about passion and more about making a profit, and that necessity becomes evident.
A significant part of why I study the market so carefully is that once you have a good collection of watches, it represents a substantial amount of capital tied up. I have a rule now that when I have around 80 watches in my collection, and I find something new to purchase, then that is the reason I would sell an older watch. When I say “older,” that is determined by the length of time in my collection, and I try to be reasonably disciplined about it. Not because it is time for them to go, not because I want a smaller collection, but I feel I have enough breadth and depth in my collection that it makes sense to replace one. Perhaps I am selling a watch that I have cherished for a long time, and now I see another watch that I could enjoy equally or more. Rather than dig into other resources and buy something new, a watch needs to be sold. For this reason, I tend to observe the market, understand where the value is, and where specific watches are fully valued.
It Is All Driven By Value
It is indeed hard for me to say that I do not have an eye on value because, like most people, I do not like losing money on purchases for my collection. Therefore, I tend to try and buy watches that are slightly under the radar, undervalued somewhat. This approach gives me a little more confidence as everybody has buyer’s remorse from time to time. I can buy something when I think I want it, then a couple of weeks later I realize that it was not for me. Of course, this happens with all sorts of things, including watches. Still, if you are careful and disciplined, I have discovered that for markets like watches and cars, provided you purchase the item at the right price, you have an option to sell it again and not lose any money.
A hobby like this that does not cost any money and gives a lot of joy is ideal. I would feel very different about collecting watches if it cost me a lot of money – well, I don’t think I would do it.
Steve
So we touched on the market there. How do you see the market structure? There are websites, auctions, and dealers, but how do you navigate all these as a collector?
The Watch Whisperer
I think you have to discount a lot of the information posted up by dealers because they have their angle and, as we discussed earlier, have a strong profit motive. It is the same for anything; there is a certain degree of salesmanship involved. You have to look through that story to find the information you want. I also think it is useful to understand the market as a whole and understand what drives the market. If you call your watch collection an investment, timing is probably more critical than specific assets selection; this is typical of all markets and investments.
Supply & Demand
It is slightly different from a hobby business because there may be a specific watch that I want, but I cannot find one for sale. Perhaps only a few of these watches have ever been made. Maybe there are only ten pieces left in the world. In this case, it is just a matter of when one becomes available. If it is a fair price, you buy it because you know you will not see one again in that condition for a long, long time. Or you might never see one for sale in that condition ever again.
I have noticed that if a rare watch comes available, a collector’s decision to buy it is not governed by price. And the people selling the watch do not sell it because it is a unique watch.
Watch Collector’s Motivation
The critical aspects that a watch collector looks for are provenance, history, low production numbers, and condition. Of course, it is possible to restore a watch in the same way you can restore a sixties Ferrari, but it is no longer the original, and not quite the same. When a watch has been restored, it may look new and shiny, but it loses a particular part of its history.
Another aspect is knowing what you are buying and understanding how likely you are to get another chance to buy it. If you are unwilling to pay the asking price, is somebody else willing to buy it? That is often the case with these highly collectible watches I am interested in. This is especially so as there are a small number of highly collectible watches and many people interested in them. After a while, you almost get the sixth sense about whether a particular watch is an opportunity to buy or not. I have looked at so many opportunities over the years and own so many watches that sometimes I know that I have to buy a specific watch when I see it.
It is tough to quantify this, but I just know that it is an excellent purchase at that moment. Generally, if you are experienced and have been doing it long enough, you gain comfort knowing that there will be plenty of other people who will have the same reaction. Even if you make a mistake, knowing that there is plenty of interest in the watch, it is then not so much of a problem to sell it on if you need to.
Boyhood Dreams Become Reality
Steve
We talked about unique pieces here. Evidently, you are more interested in older pieces. Do you have a cutoff date where you are not interested in it if the watch is made after that date?
The Watch Whisperer
Most of the watches in my collection are from the sixties and seventies. Probably by no coincidence. Most of the cars I am interested in are also from the sixties and seventies. That was when I was growing up, and that was when, certainly for the cars, they were essentially dreams, posters on my bedroom wall. I am sure that is the same for most people. Although I have found that as I have become older, I tend to start going further back because when I look at the history of the watches I like, I want to know more about what came before. So my interest has tended to go backward rather than forward.
The people who now have money to spend on cars, for example, grew up in the seventies and eighties, so the oldest cars they may be interested in are generally those of the seventies and eighties. Indeed, in my case, that would be true as well. Cars of the late sixties and the seventies and maybe early eighties were the most desirable cars from my perspective, and I am sure it is the same for watches. I have discovered now that as I start to understand a watch’s history, the older collectibles become more exciting, and I then want to go further back into the history of the brand or the piece.
People Start With What They Know and Then …
I have seen this most pronounced in the car market, but similar trends in the watch market. I have seen plenty of people who only wanted to buy modern Ferraris and Porsches; then, they have more appreciation for the lineage as they have understood those cars. They are asking themselves, where did this car or watch come from? What is in the heritage behind them? What is its history? This starts a process of them exploring the cars that were made before they were born. My view is that all of these markets are relatively safe and secure. And of course, the further back you go, generally the lower the production numbers of any collectible, so it is harder to find them. You only need a small number of people to keep the market well supported.
Next Time
Next time we start to get specific about the watches and the brands that The Watch Whisperer really gets excited about. We talk through the last purchase he made, his work on that piece, and how he found it for sale. This is all fantastic information no watch enthusiast should be without. Make sure you do not miss anything by signing up for our newsletter below.
