You Never Know what You Might Find….
Rare and pre-owned luxury watches can fetch top prices at auction or when sold through a reputable dealer. So if you’ve made an investment in a quality timepiece for practical or pleasurable purposes, it might just pay to keep in touch with its dollar worth…
Article by Darryl Middleton of Watch Trader, Melbourne, Australia
When someone goes from being a watch owner to a watch collector is, as far as I’m concerned, down to the individual. I know some people with two watches who class themselves as collectors and others with thirty or more pieces who just “like watches” and tell me they are definitely not collecting anything.
As a dealer in pre-owned watches I’ve met all sorts of “watch people”. Some seek a functional timepiece they can wear for years and give the purchase very little thought. At the other end of the spectrum (and I mean right at the other end) are the neurotic collectors who know the tiniest of details on an incalculable range of models.
Many, perhaps most people I’ve met, made an unconscious decision to start a collection. A purchase of a single watch to celebrate an occasion is soon followed by buying something else ‘for the weekend’, eventually developing into a strong passion, and at times a full blown addiction.
I’d have to say the worst way to start a collection is to try and buy watches that will appreciate in value over time. There is no doubt that some watches costing a few thousand dollars some years ago are worth many times that amount today, but they are by far an exception, and therefore this shouldn’t be the focus.
If you buy something you’ll get good use and great pleasure from, then you may also get as lucky as a Mr Abi Nathan from Tenterfield, New South Wales.
Working his way around the world as a musician Mr Nathan found himself in Tasmania in 1971. In need of a solid watch he popped in to a jeweller in Hobart and simply asked, “What’s the most rugged watch you have?” The sales assistant turned around and picked up a Rolex dive watch. Back then it was just called a Sea-Dweller, today it is famously known as the DRSD or Double Red Sea-Dweller.
To understand the significance of this purchase, we have to take a very short history lesson on Rolex dive watches.
In the beginning there was the Rolex Submariner. A great dive watch. The problem was, back in the 1960s, there were no remote controlled submarines with robot arms so the only way to repair deep-sea pipelines and cables, was to send down a man with a watch and his tools.
This was a demanding job and the king of dive watches at the time was the Rolex Submariner. With its 660ft/200m depth rating, it was good for nothing more than a trip to the beach. These were real men, facing death and a case of ‘the bends’ daily, so what was needed, was a mega dive watch. Rolex began work on what in 1967 eventually became the ‘Rolex Oyster Perpetual Sea-Dweller Submariner 2000 (2000 ft = 610m)’, affectionately known today as the Double Red Sea-Dweller or DRSD.
‘Double Red’ because of the two lines of red writing on the dial. The early version, known as model 1665 was produced from approximately 1967 to 1977. It is these watches that have become the ‘grail’ for many collectors. What Mr Nathan purchased back in 1971 was to become one of the world’s most collectable watches.
Some very fine examples of this watch have fetched over US$100,000 at auction and only a garage sale, or perhaps eBay, would turn one up for under $25-30,000. In fact, it was eBay that Mr Nathan turned to when he believed his trusty Rolex had completed its useful life. After more than twenty years on his wrist and another ten in a drawer, with an angle grinder driven almost through the watch, a non-original bracelet, the date not working and a broken winder, he listed the watch with a starting price of $500. Some would say optimistically.
Fortunately, nobody bid for the watch. A couple of knowledgeable watch enthusiasts did however let Mr. Nathan know exactly what he had, and how much it might be worth.
A few days later I received an email from Mr. Nathan. The subject line was “DRSD for Sale”. I contacted him immediately and soon after we were able to offer the watch for sale to our clients. Price? Let’s start talking about offers over $25,000. If it were mint condition, with all boxes and papers, we wouldn’t be talking with anyone who had less than $50,000 on the table.
So it’s true to say that there are some watches that have grown considerably in value over the years, but very few outpace even inflation, let alone a conservative share portfolio. Even the above rare example has grown by only about 7 per cent p.a. compounded over 30 years. The vast majority of watches are worth far less than their purchase price however long you keep them for.
Buy something because you love it. If you wish to buy something with the hope of minimising depreciation, or perhaps even gaining in value, then at least follow these rules.
Ten Watch Buying Rules to Minimise Depreciation
- Stick to the known quality manufacturers.
- Generally, steer clear of entry-level pieces.
- The premium you pay up front for gold, platinum and diamonds will generally be lost more quickly. Steer clear of precious stones and metals unless the watch is pre-owned and already lost some of that initial cost.
- Limited or special editions are only good if they are genuinely limited or special. 3000 pieces is not very limited
- Try to buy something that is one of the last of an iconic model. Late versions of the Rolex Submariner 16610 (replaced in 2010) are now making more than they cost new.
- Buy excellent condition used pieces that have already suffered some of the initial depreciation.
- Consider older watches that are already increasing in value.
- Keep all of the original packaging and paperwork.
- Take care of the watch, but don’t over polish it.
- Rotate wearing it with other watches to avoid excessive wear.
Darryl Middleton is one of the founder of Melbourne based luxury watch dealer Watch Trader. Established in 2009, Watch Trader offers an alternative to clients seeking to buy, sell or trade luxury watches in Australia, Asia, Europe and the USA. The company was the first online dealer in Australia and is now one of the largest and most respected dealers with clients in over 30 countries.