So this thread has been sleeping a while, and the subject of buying watches as an investment comes up often. I think my opinion is shared by many in that I view watch purchases as money put into a casual hobby with the possible benefit that after decades of enjoying our watches they may actually hold their value and in some lucky cases appreciate nicely.

I've recently been contemplating putting some of my savings into a fun car to drive and enjoy. Unfortunately, the vehicle I fancy is a modern American 'muscle' car and would definitely depreciate considerably in the next decade. When I shared my thoughts with a colleague who also likes watches, he quickly discouraged me from buying the car and insisted I rather buy several nice pieces I'd like to add to my collection. His argument was they'd hold value much better in the long run.

Whole studying economics, we often talked about opportunity cost and that that "cost" of any object is not only the monetary outlay, but rather all possible alternate options that money could buy instead.

I took my family on an overnight road-trip (to Greater Toronto Area in Ontario Canada) where we test drove and looked at several cars. On the drive home my wife and I were going over the financial implications of a potential purchase, and to my surprise my wife remarked casually that suddenly the many watches I've talked about buying don't seem like such a bad way to spend my "fun money".

When looking at 20 year historical stock market values, you can understand the possible argument for current values being above trend and having some room to move lower. While I don't in any way believe watches should be purchased as a true investment, they do seem like a rather decent place to 'park' funds as long as you buy wisely and choose top quality examples.

 

It's a perfectly decent way to park your money, if you don't have/want to invest in anything with better returns. New cars, especially fun cars, are really lousy ways to park your money. I'm actually considering removing an occasional-use car from my garage, and replace it with a ride-sharing service, or short term rentals like zipcar. I did a bit of the math and if I use a car less than 2 days a week I am better off renting/ridesharing it.

 

It's a nice hobby with a side benefit, that's how I look at it. If you buy and hold the right watches (Rolex, Omega, Zenith, Heuer etc.) you can potentially reap the rewards of some market gains. The minute this phenomena turns into an investment vehicle that's when, for me at least, is time to re-evaluate my entire strategy. For now, I'm happy playing with my toys and enjoy the interaction with my fellow enthusiasts.

 

Agree on most fun cars being a lousy use of money, but "you only live once.." and "you can't take it with you..." and all that...

I'm also doing the math and realizing I'll lose ~$20k in 4 years makes me take pause. Oh the watches that money could buy instead...

There certainly are many more sensible ways to part with money. It's only nice weather a few months here and I spend >50% of my time traveling for work, so the annual 'cost per drive' in a fun car would be quite outrageous.

I am not aware of any options to rent fun cars where I live but I guess I should look into that. Probably a much lower cost option over purchasing.[/QUOTE]

 

if one has started investing and collecting vintage watches as early as 10 years ago, the reward is quite high like i bought my bovet mono rattrapante at $600 before and the last prevailing price i saw on d net is $3k-5k. my cb66 speedmaster was acquired at $2k, now it is no less than $10k, not to mention my past 67speedmaster. it might not be the proper timing to invest your hard earned money in watches now.

 

Interesting list....

 

+1

 

It's funny that you say "You couldn't be so wrong" and then point out examples of cars that for the vast, vast majority of people who read this, are really not options for people to park their money due to scarcity or the $$$ involved.

I'll agree that your argument may be valid, but only as a sliver of a sliver of an exception.

Also in the latter part of your argument, you mention the 996. Surprisingly quick appreciation recently yes, but you still would have lost money when you bought it new, likely not even factoring 13-18 years of servicing.

 

Problem is, most cars only hold their value if you don't rack up miles on them. Who wants a dream car to stare at every day and not be able to drive it? Like having a grail watch that sits in a safe and isn't worn for risk of damaging it.

 

and you could buy those cars "just so"?

or would you get "assigned" the model XYZ only if you had sucked up to the AD buy buying 5-10 run of the mill overpriced sportscars with plenty of FIAT parts ...

if the later is the case - there goes your profits years before you made them ...

- but thats not unlike what ROLEX does ...

 

Are you being serious?

The primary purpose and hence enjoyment of owning a car is in driving it. However, this is also the very thing that reduces its value. For anyone to purchase a car with the intent of hold on it as an investment (such as the many examples you named), they must spend a large amount of money on it, and then spend money to store it safely for a long period of time, all the while not doing that which makes owning it fun in the first place.

Watches are similar, in that the same purpose and reason for enjoyment is also the thing that causes the greatest potential for loss of value. We hear on this forum all the time how condition and originality are the key to finding a good vintage piece with the most value. Highest prices go for those rare pieces that have never been worn. For me, buying a watch and never wearing it wouldn't be any fun at all.

As for art, I don't see how anyone could even think there's a comparison to be made. The purpose and reason for enjoyment with art is in displaying it and being able to look at it. Looking at and enjoying art doesn't usually cause a lot of degradation. If you have an example of art that is valuable and has a high potential to appreciate in value, but only under such conditions whereby you'd have to hide it and not enjoy it, then I would grant that in such a rare case it might be similar. However, such examples would definitely be the exception rather than the norm.

 

Btw: if you view watches as only pieces of art, meant to be looked at and not worn, then we have such a different view of them that we're likely not going to find a way to understand each other...

If on the other hand, you enjoy arguing for the sake of arguing, then I'm happy to continue engaging! :-D

 

With non-traditional financial assets, the way most people will define "parking" money is buying an asset and waiting for it to appreciate over time while you hopefully enjoy the asset.

Flipping a deposit on a car does not seem to fit that definition, unless you find joy in the deposit?

Now, if you're talking about buying and selling cars and deposits on cars as a business, that's a completely different angle than my post about "parking" money, which you commented on.

 

So for me, that would be a very unpleasant experience. I have enough difficulty putting away the summer toys from October to April every year for cold weather. The only way I cope is by looking forward to the warm days ahead and then using the toys as much as possible when I can.

In your scenario, I'd be buying a fantastic driving machine, only to leave it parked for a decade or more, and then sell it for profit. That sounds like torture and it wouldn't be worth it for me. You'd also have to have a crystal ball because not every car ends up appreciating (at least, probably not the ones I'd be able to get my hands on..).