How Not To Buy High End Watches/Can Something Become Too Valuable To Own?

CNBC published an interesting story on high end watches. High end, vintage and collectible watches are increasing in value, sure, but one must be careful when purchasing within this market so as to not be “taken” and also not overstretched oneself. The former CEO of Continental Airlines is well-known as a watch enthusiast, however, he will be selling 50 watches, all at once, at an auction at Christie’s on Friday. He could raise $3 million over the 50 watches, with one along potentially valued at $1 million. What’s likely to take place, as is happening in auctions across sectors, is that buyers are not willing to dole out the projected values of the objects.`

In the past decade, vintage watches have soared in value over the last ten years. Auction houses now sell more than $100 million worth of watches a year, and the numbers are climbing. Bethune’s has purchased pieces from Rolex, Cartier, Patek Philippe and other top names. His purchases are comprised of pieces from the 30s-50s, with unusual features such as rectangular faces or rare materials.

“I enjoyed them when I bought them 20 years ago and right now the money’s just sitting there,” the CEO said. “They’re sitting in safe deposit boxes. They’re wonderful, but you don’t wear them because they cost too much money. I want to put the money to use. If I’m not going to wear them, let somebody else wear them and [I'll] do something else with the money.”

The CEO maintains that the rare watch market contains numerous risks, such as fake watches and false claims of sure appreciation in value. He said, though, that one must merely follow a few basic rules in order to be a good watch buyer.

“There’s some great watches for $1,500 bucks,” he said. “Or you can spend $1,500 bucks and get nothing at a retail store downtown.”

He advised a buyer to stick to familiar names like Rolex, Patek or Cartier, and to buy from the used market, at trade shows and auctions.  Also, any collector into high end watches must pay an expert for advice, due to the fakes and over-pricing.

“The substitute for knowledge is money,” he said. “So pay someone who knows what he’s doing to help you. Otherwise you pay too much.”

If one is persistent in searching, a very well-priced Rolex can be found for $1,500-$6,000. With due diligence, you can be assured that all the parts are original, or at least from Rolex.  But, can one item be priced too much. In my opinion, because of the uncertainty surrounding the fiat currency-value system, and doubts arising about it, I am not so sure a $1,000,000 watch is so practical, when you can own the same amount in gold, and while it might be a more obvious store of value to more people, it is divisible.  Some watches I’ve liked, but will not necessarily carry their value, are listed and discussed here.

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