Help me buy more watches

timestamp · May 23, 2019

Keep in mind the market for collectibles is not predictable. The current situation is no long term indication... see also: coins, stamps.

Today, there are new and young collectors as well of course. But will there be enough of them to keep demand high when the current 40+ year old majority - be they collectors or just wearing a mechanical watch at all - will have kicked the bucket? Who knows.

JwRosenthal · May 23, 2019

I have a friend who collects flint-lock pistols. His collections was worth well over $100k when the movie The Patriot was out- fascination with revolutionary war was at it’s peak. Flash forward 10 years and his collection is worth half that...only becuase the focus of the “hot” market has moved toward WWII (which I collected when they were worth little and flint was all the rage). Does this mean his collection won’t go back up again if there is a renewed interest? Does this mean I should sell now that the market is in fervor? Being collectors, neither of us will sell, neither of us care about market value, it’s not about the value.

MCC · May 23, 2019

Whatever happened to buying watches because you like them?

There are investment vehicles that you can subscribe to that are predicated on he increasing value of watches just as there are with wine etc. Whether you regard this as a risky investment or not depends on the clarity of your crystal ball.

Watch investment is not for me, I buy watches I like and wear them. The fact that someone might be prepared to buy them for more than I paid is irrelevant because I am not selling.

STANDY · May 23, 2019

1) The first post ( actually the first sentence most of all ) has been my guide over the years.

https://omegaforums.net/threads/condition-condition-condition-and-other-pieces-of-advice.1716/

2) A easy one, don’t sell. I bought 20 watches = 10 have dropped a bit 5 have stayed the same 3 have made a few dollars 2 have done OK so I’m probably still 10% down (knowing me I would have sold the 2 good ones)

3) buy what you like not what others like.

Omegafanman · May 23, 2019

I don't think the press is helping. I agree 100% with @Stanby and similar comments. Any profits are a nice bonus if the market moves that way and you get lucky plus need the money.... for your next watch :0)

https://omegaforums.net/threads/qua...ays-increase-in-value-5-pa-average-roi.95627/

Frunkinator · May 23, 2019

It's a great argument to try and convince my wife why I need another Rolex... But that's about it.

Uscjake87 · May 23, 2019

Another important note is that having access to liquid assets, like cash, in a savings account is important. You need a decent safety net readily available. Tying your money up in watches is something that takes time to sell. It can take weeks to clear your ebay/paypal payment holds to get your money. Going back and reading the initial post you talk about long term investing (stocks) and savings accounts as if they are similar in any regard. I agree that savings accounts have a measly interest rates, but most people would say you need at least $10,000 in a savings account to handle various emergencies. Buying $10,000 worth of watches and having $0 in a savings account is going to suck when somebody side swipes your car or you end up in the hospital some how. But... watches are fun to collect so go ahead and blow all your savings and live a little. 😝

JwRosenthal · May 23, 2019

Uscjake87
Another important note is that having access to liquid assets, like cash, in a savings account is important. You need a decent safety net readily available. Tying your money up in watches is something that takes time to sell. It can take weeks to clear your ebay/paypal payment holds to get your money. Going back and reading the initial post you talk about long term investing (stocks) and savings accounts as if they are similar in any regard. I agree that savings accounts have a measly interest rates, but most people would say you need at least $10,000 in a savings account to handle various emergencies. Buying $10,000 worth of watches and having $0 in a savings account is going to suck when somebody side swipes your car or you end up in the hospital some how. But... watches are fun to collect so go ahead and blow all your savings and live a little. 😝

Totally agree. Some of the members here are on another level financially and buying $50k watches doesn’t phase them, for some of us $50k represents the entirety of our safety net, and some could only dream of having $50k.
7 years ago I lost my job of 13 years on the heels of a divorce (house-hold income cut in half). I had $12k in my savings account and knew I had to wait 6 months for my next job option to open up. I was able to survive without touching my retirement and investment accounts by using my liquid savings and pruning down my collections (rare vinyl records & vintage stereo equipment) and selling them on eBay. I also did day labor for a friend who did A/V installation and paid me cash under the table (not my career field but cash is cash and was in line with one of my hobbies, so knew the skills needed to work with him)
I luckily didn’t have to make very hard choices on what to sell, just getting rid of doubles or pieces that were superfluous. I was able to keep my house, my cars, and not really modify my lifestyle much.
Collections can be a savior when times get tough, but like said in several different posts- it takes time to liquidate them, and having a diversified safety net is key.

robinhook · May 23, 2019

Evitzee
Very, very hard to make this argument work. Perhaps if you could buy Rolex steel sports watches at MSRP and almost never wore them you could probably break even in 5 or 10 years, after inflation. But watches aren't investment vehicles. They are for personal enjoyment and the dividend is the joy at owning and wearing them.

I don't think inflation is really a factor to consider here. Bank accounts does not offer interest to compensate inflation; no investment vehicles are guaranteed to beat inflation. I mean if we are comparing a) put money in watch and b) put it in a bank account, we either consider inflation on both side of the equation, or we don't for both. If a>b, then (a+i)>(b+i) is just the same equation. Inflation applies to everything, therefore is irrelevant in this comparison.

Regarding OP's question, my 2c is that it may work, but it highly depend on:
1. One's knowledge in watches and the market. We may get lucky and gain on a few good ones, but one bad move would wipe out all these gains.
2. How much time one can invest hunting for good deals. Believe me, it takes a lot of time...

JwRosenthal · May 23, 2019

When I was actively buying records/ stereo equipment to collect/flip, it would consume entire evenings and weekends with a network of people who knew me, and could spread my name as a reputable buyer (won’t screw them, will come and take while collections/ systems away and pay cash). My knowledge of product and market value was encyclopedic and I could tell at a glance what was worth taking and what wasn’t. Then it would take time to sort, grade, price, list, repair (equipment- for which I did have the skills so didn’t have to pay for repairs)...it became hard work and lost the fun factor after a while.
I know this isn’t to the exact point of the OP, but if anyone is serious about trying to make money at any hobby, it requires a dogged determination, a network of trusted sources for word-of-mouth acquisition (the best deals are never on eBay), and a like network of people that can help with repairs and the flip. Otherwise it’s just blind luck.

corn18 · May 23, 2019

robinhook
I don't think inflation is really a factor to consider here. Bank accounts does not offer interest to compensate inflation; no investment vehicles are guaranteed to beat inflation. I mean if we are comparing a) put money in watch and b) put it in a bank account, we either consider inflation on both side of the equation, or we don't for both. If a>b, then (a+i)>(b+i) is just the same equation. Inflation applies to everything, therefore is irrelevant in this comparison.

Regarding OP's question, my 2c is that it may work, but it highly depend on:
1. One's knowledge in watches and the market. We may get lucky and gain on a few good ones, but one bad move would wipe out all these gains.
2. How much time one can invest hunting for good deals. Believe me, it takes a lot of time...

My money market account is paying 2.37% right now. That is just keeping up with inflation. At least before Uncle Sam takes his cut.

robinhook · May 23, 2019

corn18
My money market account is paying 2.37% right now. That is just keeping up with inflation. At least before Uncle Sam takes his cut.

Yes. But when you measure the gain, you use the 2.37% straight, without minusing inflation and call it zero, right?

BTW, money market account does not always pay that kind of rate. If you look at the historical yield curve, in 2017 for example, 1 year and shorter treasury yield way below 1%.
https://www.treasury.gov/resource-c.../pages/TextView.aspx?data=yieldYear&year=2017

Again, investment vehicles are not designed to compensate inflations. They do not go hand in hand, quite oppositely, general economics tell us that interest rate reversely affect inflation. When interest rates are low, companies and individuals can borrow easily and tend to spend more, this drives up the inflation.

Spacefruit · May 23, 2019

If you are buying watches to make money, then I will bet you wont. Its a very difficult thing to wake up one day and decide to make money trading in something that others have been doing for years.

Except in a rising market, when everyone thinks that they can make money buying any old watch. And in a rising market they do. Its like the school sports day where everyone gets a prize, "For taking part". Well everyone feels great for a while before wondering why in the real world they cant win anything.

When the market stabilizes then most hobby dealers lack the skills, or ability, to add value to trade successfully. Some have zero trading morals and that doesn't help them, while it can be overlooked when everyone is scrabbling to get on the bandwagon.

So then they panic, and we see all their lower quality watches coming on to the market, at too high a price, and then the perception is that the market is falling. Its not, its just a whole load of watches that were bought to make money on, rather than because they sang to the buyer.

This has happened with 105.003's recently. A whole load of them have appeared on the market and remain unsold under $15,000. And yet I still see special ones sell for well over $20,000 if they are attractive and correct.

Look at this and you will see what I mean on Chrono24. 38 watches for sale at time of this post, not one NOT ONE is attractive let alone worth the money.

I challenge anyone to find one worth buying in those 38 watches, or one they would recommend to a friend.

So my real answer to the OP is:

If you have to ask....then you probably should not be doing it.

Donn Chambers · May 23, 2019

timoss
Is there any semi-sane argument to be made that buying a watch is at least as good as parking money in a savings account?

I realize that all sorts of things come into play here, not least of which is which watches we are talking about, what condition they are in, what price you buy them for, and where the market is when you want to sell them. But let’s just say we are talking generically about watches that are of some value now and that reasonably smart choices are made on selection of specific pieces. Let’s say we are not even looking for big gains. Let’s say we are just looking at keeping pace with inflation, perhaps, and enjoying our watches along the way until at retirement or an emergency arises and you might want to cash in.

Please tell me that this makes at least a little sense so I can justify spending more money on watches I want. 😀

Sorry. It makes no sense. 😀 (you asked)

Even with a normal savings account, you’ll at least stay even and maybe go up a little. If you invest it in a decent mutual fund, the gains will be better. I have a retirement account from when I left the University of Texas 10 years ago that hasn’t been touched since - no additional mutual funds purchased, no switching fund to try to anticipate gains/losses, nothing. The value has more than doubled over the last decade (a better gain than the House I bought at the same time), which works out to about 9% a year. This is even with the ups and downs in the stock market over that period.

That’s an investment.

In 2004, I purchased a new Omega Seamaster GMT for a discount from an AD to celebrate a promotion - I paid $1800 (including sales tax). I had it serviced in 2011 for about $400 (so deduct that off the “investment”), then decided to sell it in 2016 to fund the Speedmaster FOIS in my avatar. I grossed ~ $1500 after PayPal fees and shipping. I’m not gonna figure the inflation, but clearly I lost money on it. It didn’t matter - I wore the hell out of that watch and enjoyed every minute of it. Well worth the ~10 cents a day I “lost” on it.

A watch isn’t an investment unless you are really, really lucky. Don’t fool yourself it is, and you’ll be a lot happier in the future.

Uscjake87 · May 23, 2019

@Spacefruit, it's well said. This isn't a new hobby. This is a "timeless" hobby 😉. There are a lot of veterans who have so many connections and sources that it is difficult for newcomers to purchase a banged up watch, acquire parts, and get them serviced. It can be done, but with a LOT of studying. I have only studied two watch brands and it has taken me two years to even feel comfortable not paying the newbie tax repeatedly. I always tell myself, "Stop buying brands you haven't studied!!!." I got an itchy ebay trigger finger so I have been burned more than a few times already, but fortunately I only buy watches that are under $1000 unless its something for my personal collection. I imagine if you dive straight into flipping watches $2000 and over that your losses will catch up to you a lot faster, especially if you haven't studied the brand and models for a year or more. You have to be willing to lose a LOT of bidding battles to play the flip game as there is always a collector willing to pay more to stash it away or wear it on a regular basis. There are the trusted sellers, like rolexforums and here that do this for a living and routinely trade high-end watches. It takes a long time to get to that boss status. I would love to be able to sling Patek Phillip and Jacob watches, but my budget is more like a Casio.

robinhook · May 23, 2019

Spacefruit
If you are buying watches to make money, then I will bet you wont. Its a very difficult thing to wake up one day and decide to make money trading in something that others have been doing for years.

Except in a rising market, when everyone thinks that they can make money buying any old watch. And in a rising market they do. Its like the school sports day where everyone gets a prize, "For taking part". Well everyone feels great for a while before wondering why in the real world they cant win anything.

When the market stabilizes then most hobby dealers lack the skills, or ability, to add value to trade successfully. Some have zero trading morals and that doesn't help them, while it can be overlooked when everyone is scrabbling to get on the bandwagon.

So then they panic, and we see all their lower quality watches coming on to the market, at too high a price, and then the perception is that the market is falling. Its not, its just a whole load of watches that were bought to make money on, rather than because they sang to the buyer.

This has happened with 105.003's recently. A whole load of them have appeared on the market and remain unsold under $15,000. And yet I still see special ones sell for well over $20,000 if they are attractive and correct.

Look at this and you will see what I mean on Chrono24. 38 watches for sale at time of this post, not one NOT ONE is attractive let alone worth the money.

I challenge anyone to find one worth buying in those 38 watches, or one they would recommend to a friend.

So my real answer to the OP is:

If you have to ask....then you probably should not be doing it.

Good points. However you may have picked a model that is too difficult for beginners... I mean, as beginners, it's easier to focus on modern watches in relatively good conditions. Then it basically just depend on finding a better deal, which is easier than finding an attractive 105.003.

dscoogs · May 23, 2019

To my untrained eyes, the 105.003 currently offered in OF Private Sales for 17.5k is very attractive. One should not buy it for investment though, but rather for (immense) enjoyment.

robinhook · May 23, 2019

Donn Chambers
Sorry. It makes no sense. 😀 (you asked)

Even with a normal savings account, you’ll at least stay even and maybe go up a little. If you invest it in a decent mutual fund, the gains will be better. I have a retirement account from when I left the University of Texas 10 years ago that hasn’t been touched since - no additional mutual funds purchased, no switching fund to try to anticipate gains/losses, nothing. The value has more than doubled over the last decade (a better gain than the House I bought at the same time), which works out to about 9% a year. This is even with the ups and downs in the stock market over that period.

That’s an investment.

In 2004, I purchased a new Omega Seamaster GMT for a discount from an AD to celebrate a promotion - I paid $1800 (including sales tax). I had it serviced in 2011 for about $400 (so deduct that off the “investment”), then decided to sell it in 2016 to fund the Speedmaster FOIS in my avatar. I grossed ~ $1500 after PayPal fees and shipping. I’m not gonna figure the inflation, but clearly I lost money on it. It didn’t matter - I wore the hell out of that watch and enjoyed every minute of it. Well worth the ~10 cents a day I “lost” on it.

A watch isn’t an investment unless you are really, really lucky. Don’t fool yourself it is, and you’ll be a lot happier in the future.

Well... I found individual examples not quite compelling as examples can be given either ways. I don't know what mutual funds you invested in (definitely a good one), but let's just look at the Vanguard VINIX as a typical mutual fund and see how it performs in the long term. Click "Max" to see the chart from its inception. Noted:
1. When the mutual fund started in 2000, the price was $130.
2. From 2000 to 2003, it went down to the $70s, and after that climb back to $130s in roughly 2007. This means in 7 years time, investors either made no money or lost if they baled out.
3. Then comes the financial crisis, in 2 years from 2007 to 2009 it dropped to the $60s. It caught up to the $130 inception price in 2012-13. So, 13 years breakeven or lose money for the investors.
4. Ever since it's been climbing, but why? because we are in the biggest bull market US has ever experienced. Is it a bubble here? God only knows.
5. Overall from 2000 to 2019, it went from $130 to $259. So double in 20 years, is it a good investment? Noted that I did not count inflation because I think it is a common factor that affects both sides we are comparing. But if people want to consider inflation when we talk about watches, let's consider that when we talk about mutual funds. What about inflation? how much was a Big Mac in 2000 and how much is it now?
6. This is the safest large corp mutual fund's performance during a bull market. How about random individual stocks in a not so good market? Can people lose money "investing" in stocks?

Now let's look at watches. Use Chrono24 price chart, you'll see a typical 1990s Cal 861 movement 3590.50 price increased from around $2000 to near $4000 just from 2014 to today. That's doubling in 5 years. I think in 2000 they cost about $1000. So that's quadrupled in the same timeframe. How about Rolex in 5 years, in 20 years?

Sorry. I just can't agree when people bluntly say watches are not investments. The argument they used, often how much they lost on individual watches, are as good as how easily one can lose a ton of money in the financial market.

In the end my view is, watch are as good investments as any instruments in the financial market. Whether you make money or lose solely depend on your skills and strategies. There are people making a living in either world, and people losing their pants either way. There's no point arguing whether watches or stocks are good investments. What really matters is your own knowledge and how you decide to execute.

Steve88M3 · May 23, 2019

If you want to make a little bit of money in the watch game, start with a lot of money.

Vercingetorix · May 23, 2019

Cannot compare a “typical” mutual to the above average return the Speedmaster has experienced. A Seiko 5 would be a better “typical” watch.

Help me buy more watches

timestamp

JwRosenthal

MCC

STANDY

Omegafanman

Frunkinator

Uscjake87

JwRosenthal

robinhook

JwRosenthal

corn18

robinhook

Spacefruit

Donn Chambers

Uscjake87

robinhook

dscoogs

robinhook

Steve88M3

Vercingetorix

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