Author: Alex Ciani

The Base of All My Decisions

For a change, I will not write about watch restoration and the ways in which this affects, mainly in the wrong way, both the value and the market of a vintage watch. I would like, instead, to debate the assessment process through which we could – or should, in my opinion – be able to rate such value on a percentage basis or a zero to ten scale. This is obviously my own personal method that is surely susceptible of improvement, but that is the base of all my decisions regarding the buying or selling of a vintage watch.

AN ARRAY OF ANALOGIES

BETWEEN THE COLLECTIBLE WATCH MARKET AND THAT OF VINTAGE AUTOMOBILE OR ANTIQUE PAINTINGS

You have certainly heard, especially with regards to watch restoration, an array of analogies between the collectible watch market and that of vintage automobiles or antique paintings, to mention the most common ones. There are, however, many other similar cases: from postage stamps to writing instruments, from antique silver to coins. In my opinion these are arguably categories that present some similarities to that of vintage watches, but are nonetheless quite different: in fact, all these different objects can be just as desirable, but for a different reason or, better said, a different combination of reasons. And, moreover, each of these categories reflect values determined by a combination of prerogatives that are unique to that very category: for a painting, its appearance is for sure more important than its state of preservation, for a post stamp it’s true the exact opposite; for an automobile functionality is a key factor, but for a silver samovar or a lantern, a detail of little importance.

Just as for any other category of rare and collectible objects, the evaluation criteria of a vintage timepiece include several elements, many of which in common with those of other categories, but still unique to that of vintage watches only: conversely, some other parameters, although applicable to different other objects, cannot be used to assess a vintage watch without doing some damage just like, at least in my opinion, it is actually happening. The elements that for me determine the value – both financial and “cultural-emotional” – of a vintage watch can be divided into two main categories: those of aesthetical nature and of technical-historical nature. My rating will be as much higher as the values within each of these categories are equally balanced, like the two plates of a scale bearing the exact same weight. The more aligned all the evaluation parameters, the more visible will be what I like to define as the “magic” of a given watch.

My rating will be as much higher as the values within each of these categories are equally balanced, like the two plates of a scale bearing the exact same weight.

Within the realm of the aesthetic perspective are, above all, the overall beauty and the visual impact of the watch: these are two elements that can actually prescind even from its preservation state or the absolute originality of its every component; the patina, or the whole visual effect given by the presence – or lack of – signs of aging; the preservation state, from the example untouched but totally destroyed, to the one that has been restored to perfection, from the one absolutely untouched and still like new, to others showing every shade in between; the combination model-color, like for example, a watch that has a particularly rare dial color and/or hands style, or in a particularly unusual metal for that model, like a steel and gold Patek Philippe chronograph.

On the other hand, belong to the technical-historical sphere all the elements that relate to the exact prerogatives of a given watch the day it left the factory. First of all, the originality of each component, that have to necessarily be – at least as far as there is any even minuscule visible difference – factory original; the consistency of each component, meaning that if not “born” with that very watch they be at least the exact same that was included in the original manufacturer’s design and plans; the period correct element, meaning that all components not only need being factory original, but also correct for the  watch’s production timeframe; the rarity of the timepiece as it relates to production numbers; its desirability and  availability from a demand/offer perspective; the presence of any original paperwork and accessories.

“PERFECT”

IS NOT ALWAYS PERFECT

Theoretically, on a percentage scale a watch in absolutely “like new” conditions should always be the benchmark for a 100% rating, but in my opinion that is not necessarily always the case. In fact, it is well possible that a watch that shows some aging or some wear may still score the highest possible rating when some of the elements other than condition make up for the flaws. By the same token, it is possible that a well restored example may be more valuable than another that was never “touched” but aged badly, or that an example with very visible marks of aging – a perfect example would be that of the “tropical” dials – may be more desirable than the same exact model in absolutely perfect conditions. The “perfect” watch is not always, necessarily, perfect.

The generalized need to unify all the evaluation criteria in one one-size-fits-all code easily applicable by collectors and professionals alike worldwide has reduced this complex process to something similar, to use an example that I find particularly fitting, to that of antique postage stamps: if these are absolutely unused, perfectly “centered”, with a mint gum as originally sold by the post office, their value is 100/100. But the moment one only of these parameters is off, their value falls dramatically to a fraction of the full rating. When this same method is applied to vintage watches – that very, very rarely arrive to us in truly unworn conditions – the consequence is that these “ideal” conditions are often the result of invisible restorations or small improvements, such as the replacement of the damage components with same original parts, but in better conditions: agreeably accepted by dealers, but not shared with their buyers, this seems to be the only way to keep sustainable a market otherwise too resourceless to satisfy the often unrealistic expectations of the demand.

TRUE EXPERIENCE SHALL NEVER HIDE

VERSUS OPPORTUNIST “EXPERTS”

This situation has also contributed to the growth, between dealers and collectors, of the category – non-existent until just a few years ago – of vintage watch experts and consultants, a new profession that allows to profit from this market without paying the dues, finding or investing significant funds, exposing oneself to costly errors, scams, thefts or robberies. The experience matured by the “OGs” during the first decades of this experience is today available online for free: all one needs, is the time to study the available material – or at least enough of it to know a bit more than the next guy does – online, combined with some self-promotion skills, to be an “expert” who can charge for his services more than he could make buying and selling the same watches for which the consulting is offered. And, more often than not, without having ever owned one, or even a similar one, himself. Obviously, I do not have a high opinion of the category, but do acknowledge that whereas it does include a decent number of totally incompetent opportunists and a handful of unhinged haters, it also counts a few extremely educated individuals who, in my opinion, could help with their same work the future of this market rather than its demise. This is something that I promise to get into detail sometimes in the near future.

MONEY OR PRIDE

DEFINING AN OBJECT WITH CULTURAL ATTRIBUTES

These are, for the most part, more or less informed archivists who excel in comparing all the data available online and/or the equivalent of laboratory technicians, perfectly able to spot an unknown or undisclosed restoration, but apparently unprepared to understand its value or to contextualize it into a true complete evaluation of the example at hand; to attribute monetary values relying on statistical data based on auction results, but unable to suggest any other value than previously attributed to a similar watch by a market precedent; and, especially and unfortunately, perfectly able to leverage on their clients’ fear of losing and desire for gain – both in terms of money or pride – to consolidate a method that grants their industry growing prosperity at the expense of the emotional, esoteric, stylistic and exquisitely aesthetical elements that have determined the very birth of this passion and market as we have learned to love it since its beginnings in the early 1980s. Deprived of its emotional content, that in so many ways make the way we perceive a vintage watch similar to that of a work of art, its unique prerogative to become part of its owner’s personality so similar – at least for most men – to that of some automobiles or motorcycles defining an object with cultural attributes absolutely unique to its own category, the incredibly rich world of vintage watches is on the brinks of following the fate of that of postage stamps and collectible coins.

If you are looking at purchasing a brand new luxury watch, then I would probably recommend (with an unbiased opinion of course) to look at luxury vintage watches.

Before we go into why, let’s look at what happened in Switzerland this past month.

Among the world’s great watchmakers, Rolex became the first to announce it would briefly shut down as the worldwide COVID-19 pandemic worsens. Now, the rest of the (non-vintage) watch world is speedy following suit.

Less than a day after Rolex announced that it would be closing its production on Tuesday, Hublot ended up doing the same. A few days later, Patek Philippe, Audemars Piguet and MB&F had delivered themselves to the list of manufactures that were following suit. In Patek Philippe’s case, each its main office and production facilities would be closed until March 27, same as WWD.

Audemars Piguet made its announcement on Twitter, where it stated the enterprise would close a portion of its workplaces, production websites and shops. “In this period of uncertainty, people’s safety stays at the coronary heart of our priorities. This is why we have determined to shut our Swiss production sites as well as some of our offices and boutiques in various countries till the stop of March,” its Tweet read.

Beyond a feel of corporate responsibility, the closures had been precipitated by way of Switzerland’s state of emergency, which limits crowds and has pressured maximum non-essential companies to cease regular operations. That declaration calls for all shops, restaurants, bars, leisure and entertainment facilities to shut till similarly notice.

With a number of the field’s maximum vital players down for the count, chances are high that the ones still status will soon adjust path and shutter the parts of their very own operations they can.

Those owned with the aid of conglomerate LVMH––Hublot, Tag Heuer, Zenith, Bulgari––may additionally flow at a slightly unique pace due to the fact they function greater independently than their peers at other luxury conglomerates.

Swatch Group––which owns the likes of Omega, Breguet, Harry Winston, Blancpain, Glashutte Original and Jacquet Droz––has but to make any most important statement, however its pass can be the most telling. Though it owns several excellent watch manufacturers in its personal right, the business enterprise also acts as a main element dealer to different watch manufacturers.

“Buffett said, “I just hope I see a lot of recessions.” Some of Berkshire Hathaway’s best investments have come during periods of economic turmoil.”

Is there a light at the end of the tunnel? Is it worth it to purchase a watch now? Well, if you believe in the value of priceless luxury items, or even Gold, then yes. All you are doing is investing in your own future.

As stated from a marketrealist.com, “In an interview with CNBC, Warren Buffett, Berkshire Hathaway’s (BRK-B) chairman, was asked if he sees a recession coming—especially since the yield curve briefly inverted last week. Buffett said, “I just hope I see a lot of recessions.” Some of Berkshire Hathaway’s best investments have come during periods of economic turmoil.”

We always hear about the word vintage. In fact, it is plastered all over this website. But what does it exactly mean?

Are we even using the word correctly? Let’s read further and take a look at the history behind the word “vintage.”

History of the word “Vintage.”

The word ‘Vintage’ was first utilized and brought to life in the mid fifteenth century. Taken from an old French vendage, “vintage” meant “wine harvest.”

So what exactly does ‘Vintage’ refer to that is not related to the wine category?

In our context, meaning what we are concentrating on here on our website, the word vintage is used primarily for the luxury watches, cars and other collectibles we are showcasing.

Vintage is an older item, that has deep history to it. In many cases, the item will in fact increase in value if maintained properly. We usually mean an old item, which carries certain nostalgic value, and potentially is of high quality. It would be classified as antique and not be less than two decades old.

When it is applied to collectibles, if it is more than 100 years old, it would be considered antique. Again, if it is between two decades to 100 years old, then we would classify it as vintage. Many of the watches that are showcased on this site are not only vintage, but they are restored and repaired in such was that makes them more valuable then the time they were purchased – subsequently giving the buyer an opportunity to pass it down as an heirloom.

Do not mistaken vintage with retro

There is quite a significant difference between vintage and retro. Retro would be labeled as something that is taken after a vintage item. In other words, it is copied to look like vintage. It does not have the history, nor does it have the opportunity to be passed down with class, as a vintage watch would have.

Many of the great watches we have here are not only vintage, but they are restored in a way that makes them timeless, sophisticated and in even some cases – rare.

Here are just several of the a list of some of the watches below that are available for purchase:

S/Steel Rolex Milgauss ref 6541 from 1958

18K Patek Philippe automatic ref 3440 from 1963

18K Patek Philippe automatic ref 3440 from 1962

S/Steel Rolex Explorer ref 1016 from 1966

S/Steel Rolex “Ovettone” ref 6206/84 from 1953

S/Steel Rolex gilt GMT-Master ref 1675 from 1966

S/Steel Rolex gilt GMT-Master ref 1675 from 1965

S/Steel Universal Genève Tri-Compax from 1975 circa

When you think special forces, what immediately comes to mind? If you thought of the United States Special Operation Forces, then you are most likely in the same mindset of anyone else reading this. Though, there are other countries out there that have some of the most powerful armed forces units in the world. From Israel’s “Sayeret Matkal,” to Russia’s “Alpha Group,” special forces around the world work tirelessly to protect its land and citizens. In special circumstances, some of the most elite forces even go out to help other countries in need, most of the time during periods of war.

For the Italian Navy Unit (COMSUBIN), Panerai plays a pivotal role for its members, by providing this elite forces team with special professional divers watches. If you think about their daily routine and circumstances, the watches must certainly be made to be most effective under extreme situations.

Quick History of Panerai

Officine Panerai, or affectionately called Panerai to most, was founded in 1860 in the city of Firenze, and ever since has been one of the world’s most leading and innovative watches out there.  Granted they are part of the Rolex family, this very unique watch holds a natural blend of sophisticated Italian design, Swiss technological details and a passion for being underwater.

Between 1938 and 1972, Panerai was made for the Royal Italian Navy. Designed for extreme conditions, the utility designed luxury style watch truly made its mark in Italian history.

Additionaly, Panera’s limited annual production makes this watch have a value that is quite expensive – coupled with the fact that it sits under the umbrella of Rolex. Between the start of World War II and the early 90’s, Panerai was really never a brand. According to ex CEO Angelo Bonati, Panerai was “nothing.” He goes on to further explain, “It had only one watch, an enormous big watch not in line with the trends at the time.”

The rise of the Paneristi

While in Rome, in 1995 to produce the action movie “Daylight,” Sylvester Stallone became, the lead aficionado of the Panerai’s transformation. Stallone had a chance to see the Panerai Luminor Marina. In fact Panerai was the leader and trendsetter in creating watches that were over-sized, which ultimately became popular with other brands. Slytech was then created for Stallone back in 1996, and they went for roughly $20,000 each. He ended up handing them to his cast and crew.

Since Stallone’s inception of the Slytech, there have been hundreds of aficionado’s all over the world that would consider themselves a Paneristi. This devoted fan group, created twenty years ago, even had a dedicated limited-edition timepiece designed to this groups’ specific liking, back in 2010. They created it to their specifications, and thus the Luminor for Paneristi fueled this special following.

Today, the Panerai continues to create some of the world’s most beautiful watches. Down to the details, even the straps undergo a series of tests to check their supreme quality. Tension and torsion, abrasion, sweat, humidity, UV rays, water resistance test, saltwater test and finally the wear resistance test.

For more information on the Panerai we have recently sold, please click here.

The aftermath of the Geneva auctions week gets definitely the attention of most dealers and collectors alike.  Of course, I reckoned I’d have to write something about it to update my blog with something new. But as the days passed by, I got also really intrigued by the idea of trying to answer the questions that I am punctually asked by friends and clients every time a watch does not bring in auction at least the same price that everybody asks on the market: how can a Paul Newman sell for less than $ 250K? That watch sold for nothing, why? Is the market collapsing?

First off, I would like to give you a basic understanding of how auctions results should be interpreted. For this purpose, I have asked the four major international auction houses in the watch department – Christie’s, Sotheby’s, Antiquorum and Phillips – for their results in detail, and namely for their total sales before buyer’s commission, the exact number of lots offered for sale after lots withdrawn and the total of the low estimates of these watches, which we know of course generally also represents the reserve price offered to the sellers (except of course for the lots offered without reserve).

I thank all of them for having kindly submitted the requested information, albeit all in a different way: except for one auction house, the other three have provided partial data and, as I have realized sourcing my own information, did that apparently for a reason. Because, of course, the three numbers I asked for are all easily obtainable online, save naturally for the tedious task of extrapolating them manually. Honestly, I initially just meant to spare myself the leg work, but as I saw the info coming in different forms from different auction houses I couldn’t help thinking there was a reason for that.

The main piece of information all auction houses will make public is the total of all sales, inclusive of buyer’s commissions: the higher the number, the better the performance will appear and well, that extra 25% that’s added to the bill makes that number look even bigger. I do think that is an important piece of information anyway, because at the end of the day that is what the watches have really brought on the market. For example, if a steel Paul Newman sold for $ 160K hammer, therefore $ 200K including commission, it would be more appropriate to assess its market value around the higher figure, because that’s what the end user is evidently willing to pay for it. On the other hand, as a seller you will need to consider that you would be getting $ 160K selling that watch to auction. Auction sales’ outcomes are unpredictable, but there are stats that can help you steer your choice as a seller towards the safest direction: that’s when the other numbers come into play. So, let’s look beyond the two basics figures we’re normally offered: the total of the proceeds inflated with the buyer’s commission and, occasionally, the percentage of watches sold over the number of lots offered for sale.

The reason why knowing the total of all estimates is useful, is that it can be opposed to that of the total sales before commission. This percentage generally ranging from barely below the 100% threshold and somewhat more over it, will tell you the average ability of that auction house to score above the minimum promised to the consignor. Generally the reserve price is fixed somewhere around half of what the watch is expected to potentially express including commission, as that’s more or less as high a number that can be reasonably guaranteed the seller, yet allowing the deal to sound attractive to potential buyers. Needless to say, the lower the reserve price will be, the easier it’s sale is going to be and the higher the selling price over reserve ratio will prove: conversely, sellers will be less and less easy to convince to consign as the offered reserve price lowers.

Believe it or not, the lower the reserve price of a  lot offered for sale, the higher the odds that it’s going to perform well. So when your auction representative will push for a lower reserve price, he will actually be doing something that works best for you: he will leverage on the high estimate to convince you to let go, using it to raise your best hopes. This is where the average percentage above reserve an auction generally strikes can be an indicator of what you can expect: if your watch’s estimate will be $ 100K to $ 300K,  and auction house that generally scores 90% of the low estimate in total sales before commission, it is likely to either fail at selling your item or will sell it at the very minimum you were guaranteed (plus the commission, that goes to them) which in this case will be $ 100K; if their average is 20% over the the low estimate, that will suggest that the odds you are going to sell your watch for $ 120K or more are relatively significant.

I did run all these number for all the above mentioned auction houses and did get a good picture of what happened in this particular season. Although I will not share this analysis at this time, I do recommend that you do such study when pondering which auction house you will entrust with the sale of your watches. What I will share, however, is that one of them provided a detailed, already made analysis including all of this and even more data in a surprisingly exhaustive document; another one provided all the information I had asked for in a more informal way, allowing me to run the numbers without scrambling online and pull my own results; the third provided part of the requested info, just so there could be no complaints, yet presenting it in a way that certainly wouldn’t help to easily get a very clear picture; and the last one volunteered only their press release, a manifesto celebrative of their more significant sales and the total amount of the sales scored.

Including premium, not the naked figure. In a way, each of these auction house’s individual performance related in its own way to how the statistic results were disclosed. One last thing I think is worth noting is that everyone sold as an average  closer to the low estimate than the high, this time, something that everyone has noticed for sure. The market is apparently going through the expected slow down after a few years of consistent growth. Nonetheless, a total of 55, 717,756 Swiss Francs (roughly the same in USD) have been spent in watches during the week, excluding Christie’s Only Watch charity event, that bought another CHF 38,593,000 with the Patek Philippe 6300A-010 alone that sold for CHF 31,000,000. Definitely not too bad, I would say: this is obviously a market, and a serious one. I still can’t help imagine it aligning itself with that of contemporary art and vintage automobiles over time.

Let me try to explain why, in my opinion, watches offered at a much lower price of what we are educated to believe to be their market, occasionally sell for an even lower one, if they sell at all. The concerns that such events trigger, and the idea that these are  necessarily signals of a crashing market, derive from the generalized misconception that the vintage watch market is somewhat similar to that of the stock exchange. I have many a time received calls from clients who had bought a watch – mostly a model appealing a vast audience, like a Rolex Daytona – just a few weeks before, asking “what are they quoting now”, as if there were department in Wall Street for watch dealings or something, and I were their trade agent.

And other calls, at times even confrontational, if a watch similar the one they owned was advertised by another dealer or sold in auction for less than they had  paid for theirs. Again, all examples of how the expectation of new watch collectors are occasionally a bit confused and often, I will ad, because of what their trusted watch dealer has deemed reasonable- if not convenient- let them believe. The truth of the matter is that although high-end watches haves turned out to prove exceptional investments over time for many collectors, they haven’t done so for all of them. Inevitably what you buy, how long you hang on to it and at what particular time you sell it have a critical impact on this particular aspect, and selling your watch is not exactly the same thing as calling your bank investments’ desk agent and tell him to get rid of all your General Electric stock at the same price you’ve seen on the morning’s WSJ.

In auction especially, many factors come in to play. First of all, a good number of buyers is made of dealers. Dealers do generally buy their inventory at market price minus some 10 to 20%, but that doesn’t mean they will buy each and every watch of the same make and model they will run into: especially at today’s prices, they will likely have to wait until what they already have in-house is sold, to then replace it. Exceptions may happen when the “multiple” comes stupid cheap or, more likely, when its characteristics are so outstanding that he will buy out of pure passion alone: and that’s when extraordinary comes into play.

Second, non professionals and collectors still tend to be very shy about buying in auction, because the distance can make it hard to personally inspect  the desired watch and there is no return policy in case you just don’t like it; because of the payment terms that are likely to be less flexible than those offered by dealers; because of the pressure of having to commit to a price in a matter of seconds if you bid personally or on the phone; because of the occasionally unfriendly shipping and customs logistics that can come into play if they’re buying from another country. On top of it all, it takes at least two bidders who want that same watch, on that same day, in the same time zone, against all the similar lots offered by other auction houses, to compete on that same lot and bring the price up to real market values. Also, we must not forget how low reserve prices generally are. As you can see, there are so many factors that may affect an auction result, that I am more surprised when I see  watches selling exactly in their retail price range than the other way around.