Third Party Authentication Certificates (TPAs)

I felt this needed a separate thread.

I have long been using my own system for grading Speedmasters under consideration. I find it helps me to focus.

The back end of this system is an untidy collection of notes but based on a thorough system that when followed has produced good results for me. The trick, is to distil a usable and useful simple document from that jumble of information. Now that I offer it is looks simple:




And This is the watch:



I deliberately chose a dreadful example to make sure I demonstrated that the certificate catches everything.

What the paper does achieve is to confirm that parts correct or not. (Mostly not in this watch).

I am happy to discuss this, but remember I have no profit motive here, nor do I especially want to start a TPA business. However I think they are inevitable - imagine if someone could do it for all those Rolex GMTs, Subs and Daytonas out there, and indeed how many would come back with unexpected problems. In other words my own little area of focus, Speedmasters is miniscule compared to the market for Rolexes, especially if the service costs $400 to $1500 each (That is what Gemstone labs charge).

Another issue might be the physical location - to give a proper evaluation I would need the watch in hand, and that might be expensive in transport. The gem people do it, and if someone could set up a Rolex TPA service in New York I bet they could pay the rent. It might be a bit boring, though - looking at Rolexes all day.

But I am sure someone is going to do it soon.

Simplicity is the key.

Any way I go into more detail on the blog, but I am interested to hear if people would use a service like this.

Hi William @Spacefruit -

This is a neat idea. As a computer nerd myself, I can't help but wonder what a machine learning model might be able to automate out of the process so as to make it more tolerable at scale. For instance, lume color and consistency, dial authenticity, and bezel condition all come to mind as knowable by a computer (eventually, given a big enough sample size, which is a big if).

Can't speak for others, but this is what my boutique got from Omega when they couldn't produce an Extract on a Centenary.
Interestingly my other Centenary came through without a hitch.


Bienne, the 16th of June











Your extract of the archives has been canceled







Dear Boutique, Unfortunately we do not have complete information
about this watch (10761XXXX). We can confirm, that the movement was
produced on February 23, 1948 and sent to France, where
the case was produced.

Kind regards

OMEGA Brand Heritage Team

To me, the appeal of this kind of service lies entirely in the reputation of the provider. I would trust a TPA from the author of Speedmaster 101! Paying something to get @Spacefruit's take on a watch would be worth it to me because he's spent years contributing to the collector community entirely gratis. (This is in the alternate reality where I could afford extraordinary collectors pieces mind you.)

I don't know about a TPA service as a (sole) business proposition. It seems like at least a couple hours work to receive the watch, open it, examine it, and write up the results. Say you charged $75-100/hour or $150-200 per watch, of which at least half would cover overhead (insurance, shipping, etc). You'd have to be booking 15-20 watches a week to make even a basic living on it, and I don't see the demand. Potentially a nice side business for a watchmaker or dealer, though.

To keep the subject bubbling...and remember my experience is watching the gemstone business adopt these certs. It was resisted and ridiculed for a while, and went through its share of scandals, but now you cannot sell a high value stone without papers, some have papers from three labs, which in extreme cases get updated once a year.

Extracts

a failed extract means that the movement number does not match omega records for the case.
A records not available is a different case - although confusingly that was the reason they used to give for the above situation.

so there are three possible notes for an extract :

confirmed case serial combination
Records not available
Serial is not known in the reference.

In the above example, it was confirmed the movement is not from a speedmaster, therefore “failed”

Who would use it?

auction houses, high dealers, insurance companies, courts.

who would issue them?

an entirely independent, non trading academically staffed institution that builds its reputation. In the stone business the labs are only as good as the lead gemologist. That said there is an extremely successful sub set of labs who are cheap and will give opinion on simple things like is it a real ruby (Charging $50) while the Swiss labs can charge $1500 or more for a full origin and heat report.

if watch TPAs follow the gem business, then there will be a period of resistance from old school, and the auctioneers will start to adopt it for the top end. The auctioneers may collaborate or advise a small group of TPA providers to improve or refine the system.

so first adopters will be auction houses and then high end dealers. It will really be useful in 50,000 + market at first. The trouble will always be finding a trustworthy assessor.

that is because like it or not, our hobby attracts financially motivated collectors - that why the auction houses are so interested- and TPA’s open the market to not so well informed buyers giving them confidence to pay higher prices

while may may all bemoan this situation, as soon a speedmasters started selling for over $5,000 they crossed into hobby/investor territory. In other words, no one buys a vintage speedmaster for over $5,000 thinking they will never get their money back - so to some extent they (we!) feel the money is slightly safer than in the bank at the moment.

Blockchain

well this is a buzz word and as far as I understand a block chain is only independent if released into the wild. In other words the data base must be open and distributed. The key to the value in blockchain is that I can go to any transaction or in this case watch, and see when information was first entered on the chain, by whom. Then I can see any subsequent information, and who added it. The key here is that no information can be taken away. However information can be added that is erroneous - but as it is public it can be held to account by the distributed viewers.

blockchain is interesting when distributed and immutable - otherwise it’s just another data base controlled centrally.

it would also need a token.

photographs

of course photos on the TPA will be present, today’s technology making it so easy. Also remember that when I do it for myself, I have a folder full of hi res photos - if I were to re examine a watch 12 months later I would easily spot any changes.

costs
I think it will be just like the stone business. There will evolve two levels, a high end Swiss lab with great integrity charging $400 to $2000 to verify Rolex, Pateks etc, some omegas. Then there will be more local services, charging less but with correspondingly less reliability - but still able to confirm dials or service parts.


Scope

My own focus is speedmasters, which as the Phillips sale just passed as shown us, is a relatively small proportion of the vintage market in both numbers of watches and values. So while my work is on speedmasters, I expect some obsessive minded person like me but in Rolex or patek might come along and make a system.

agree or not, I think it’s coming. I’ve seen it all before.

Two near identical watches at auction

one has a paper detailing the originality of the parts, confirming they are correct.

the other does not.


Which one sells for more?

that’s why auction houses will drive the TPA business

Its hypothetical

These TPAs's are not aimed at the educated buyer, rather they enable UNEDUCATED buyers to enter the market, thus increasing demand, and therefore price.

I am not saying it's a good or a bad thing, I am saying it is coming whether I like it or not, and it's going to be driven by the auction houses.

I can only speak from my own point of view. I would never buy a vintage Daytona as I am too scared. But if a reputable entity told me the watch was legit, and I had just had a bumper year in my hedge fund (not) then I might be tempted by the pretty, verified watch, knowing that in a years time I could re sell it if I had to as it was verified. It might increase my confidence, and indeed the confidence of other buyers, thus driving up the price.

This service is not for the current collectors, it is for the new breed that the trade wants to encourage. (And we all can debate the Trade Vs Collectors till the cows come home, in another thread)

I tell you, I have seen it before. And while I didn't like it then, I can tell you an awful lot of stones that had sold for a lot of money lost a lot of value as they would not pass certification.

Certification actually made the good stones rarer, and I can see the same thing happening with watches, especially those PN Daytonas!