LONDON (Dow Jones)--A vintage wristwatch is an alternative investment unlike any other. As a tangible asset it is unique in that

it can be enjoyed every second, of every minute, of every hour, of every day.



But watches are long-term investments; consequently their owners will often have to wait more than a few rotations of the small

hand before seeing any significant return on their initial outlay.



The first wristwatches began to appear around 1910 and proceeded to displace their pocketed cousins in the market over the

following two decades. With the 1960s came not only the sexual, but also the quartz revolution. Time seemed to come almost to a

standstill as the industry stood back to asses the impact of this new electronic medium.



However, watches with mechanical movements - which contribute 14% of volume, yet 65% of the total market value of watches sold -

rather than quartz ones, are preferred for investment. This is due to the artistry involved in their construction, and the quality

of the materials they are made from.



Today, brand-new watches, like luxury cars, depreciate around 40% in value the moment they leave the shop - making them a far

less attractive investment than say, a more vintage model.



And wristwatches, like automobiles, are also marketed towards, and sought after by, a predominantly male audience, guided by the

latest fads and trends within the market.



"It's the main piece of jewelry a man will wear," said Paul Maudsley, head of watches at Bonhams, an auction house. "Well, with

the possible exception of his wedding ring," he ever-so-quickly added.



In contrast, the market for ladies' watches at auction is virtually nonexistent. "Women can buy jewelry; quite simply, they have

other things to spend their money on," Maudsley said.



Unsurprisingly it is the top end of the market, with established brands such as Rolex - the world's most collected brand -

Cartier and Patek Philippe that command the highest prices at auction. Watches released by major fashion houses, rather than

traditional watchmakers, are looked down upon as "costume" watches.



"The market was very buoyant a year ago," said Maudsley. The slide of the U.K. into recession has sent a tide of sellers into

the market place, and a wave of potential buyers out of it - according to John Matheou, founder of The Swiss Watch Company, based in

Chiswick, London.



The watch market peaked around 12 months ago, after a period of inflated prices. When investors got wise to these prices, "the

bubble burst and watches started to come back into the dealers' hands," Matheou said. The market quickly leveled out, counteracting

the "one-upmanship" of the former vintage-watch-buyer demographic of bonus-culture-dependent city workers.



In the last year, prices in the top tier (valued above GBP20,000) have dropped by between 30-50%, with Rolex watches holding up

only slightly better than their rivals, Matheou continued.



It appears that the only recession-proof luxury watches are those which have been discontinued. The Rolex GMT II and the Rolex

Sea-Dweller, which both ceased production over the last six to 12 months, have seen their values continue to rise. "Once they become

discontinued, people want them more, as there is an element of history attached to them," Matheou said.



At the artistic end of the supply chain, the Swiss watch industry registered its first decline in exports in the fourth quarter

of 2008, after enjoying 19 consecutive quarters of growth.



According to the Federation of the Swiss Watch Industry, however, Swiss exports still totaled an incredible 26.1 million watches

- worth 15.9 billion Swiss francs ($14.7 billion) - in 2008, with an annual growth rate of 0.8%.



The record price paid for a wristwatch at auction in the U.K. saw a gold, 1932 "Trossi Leggenda" Patek Philippe watch,

originally owned by Italian racing driver Count Carlo Felcie Trossi, go under the hammer at Sotheby's in 2008 for CHF2.345 million -

equivalent to GBP1.14 million.



Because there is no market index, the burden of establishing a database of sales figures, by which valuations can be made, lies

with individual auction houses. Thanks to the growth of the Internet, however, most of these databases are easily accessible for

cross-referencing.



Although prices may have dipped, interest in watch auctions continues to grow - a trend which isn't set to change anytime soon,

Matheou said.



Watches tend not to change hands, or wrists, too often. A lot of vintage wristwatches brought to auction are sold by their

original owners. As long as they're looked after, tales of incredible profits are not unfamiliar. For example a Rolex submariner

bought for GBP100 in 1972, would now sell for between GBP10,000-GBP15,000.



However, a watch worth GBP7,000 on its own, could be worth as much as 70% more, at GBP12,000, if complete with case and

documents, Matheou informs us.



The timepieces themselves are always going to be more accurate than the art of investing in them. So, if a chosen watch is

something that you're passionate about, then it is likely that, if or when the watch is brought to market, someone else will be so

too. "It's likely that, at the very least, you'll get your money back, if not even more," Maudsley said.

nt

One can look to the Revolution sale of two years ago and ascertain a give or take of 38% or so decline in price on all items...Not 50% yet, but heading towards that I am afraid..A very nice PN's on average were selling around $80-100 K tow years ago...Now more like $45-60 K, big difference..Rare and common vintage alike are getting the same hit in price..
Arthur

but I do not see huge reduction in price in the past 6 months.

What I can say is, I have a chance to see some special watches come up for sale in the past 6 month. However, the price is still very firm and collectors are buying their dream watch in a very quick way.

I must say, the price of some of the "more common" model are not reasonable, that's why they regulate their price by the market.

But pieces like Comex, PN, Milisub.... are real cool investment which we can wear it daily!

regards from HK

and often at reduced prices. But, the 'gems' always shift at a pace!
Great news for watch lovers, not so for investors! I know what I am

Yeah right. NOS maybe...

I am trying to sell some nice examples and people want to pay what they sold for 3 years ago.

The 'record' auction prices are hype and I for one think the market is in a huge funk.

I may just pull them all off the market and just wait for the market to come back.

Poor examples on straps sell well at bargain basement prices but people do not seem to want to pay for quality. JMHO =)
Dennis

...are selling for the same prices they used to 3-5 years ago, why should it be any different for watches? Arguably, watches should fall even harder than these other assets because they are collectables not income-producing assets (but that's a separate debate).

Last week in Paris, a gentleman from Marseille delivered to a friend of
mine a beautifull 16610 Comex @ 30 000 euros* (+ 1000 euros for the middle man) to be compared with the Tajan one in lesser condition sold 50.807 euros on 15/12/08.

Then I received this morning from Mondani the 2008/2009 price updating (based on last year auction results)
and the question I'm asking is did we see lately these kind of auction results?

a 5517 Miul Sub @ 121 000usd?
a 18k 3525 Monoblocco @ 229 000 usd?
a 6200 BC @ 138 000 usd?
a 6239 PN @ 156 000 usd?
a 1680 Comex @ 155 000 usd?
a 5510 BC @ 111 000 @ usd?

I dont think so.

Prices did not drop up to 50% but surely went down at least 30 to 40%.

So no need to be eyes closed, YES prices dropped considerably!!










* a bargain maybe? But as the seller said to the buyer, "Those actually willing to pay cash
30 000 euros for a watch are not many".

consistent to the market : if you buy ANY watch directly from the owner you can get it for a price
well lower than the one you find from a dealer......
your friend has just skipped one or two "hands" ( or "steps" if you prefer ) : we are all happy
for him, but :
1) a single price in any case "it's not the market" : for example more than 35 k USD for a "supposed" Patrizzi 16520
with counters grey instead of brown ( watch recently sold in an auction ) is not really significant...as
we cannot expect such a mean value for this kind of watch ;
2) some people are not aware of the price they can ask ( a friend of mine has bought in 2008 in Italy a mint 1665 with
dark brown mk2 dial for around 17 k euro....
3) in this economical situation you can sometimes find people who really need to sell and so their
requested prices can be very low...
so I would be more prudent about "dropping %" as the levels of prices are far more complicated.

...if we can not base our "average paid prices" on exceptions, like perfect watches with B&P's,
clear provenance and sold in upscale auctions, we should then take a well selling, affordable, attractive, collectable and semi rare watch like maybe a 1680 red Sub.

So, once again what was the price begening 2008 for a red Sub and what is the price today for
the same watch? Just look at the red Sub EK just sold on on his website.
I think you will find your 40% drop.

is expensive I think.

I have been proposed one with B/P for 25k and it is not offered by the first owner, but by a collector.

I know a 1665 for sale since december (600m dial), the seller would probably accept 40k now....if he had such an offer in cash...

Probably that situation won't last, but it seems to be the current market...

Cheers

Jeff

If you could post this message earlier,I would buy this 1665 comex for 40K instead of buying David Leach's 1665 comex for around 100K, although it is complete set.

recession. Certainly the USA should be preparing for a decade+ of economic decline even harsher than the multi-decade decline in Japan since 1989.

On a positive note, it was interesting to see 1803s getting higher asking prices on ebayyyy. Certainly not all the watches but when I used just 1803 as my filter I got very nice examples at better prices than I have seen in quite awhile. I partially attribute this to a natural rotation of interest in various models...and partially to the smart buying of gold on the dips. In this case, wearable gold.

I think some of the softening of the sport model prices is also based on just plain boredom. You can only look at so many Subs before they stop being unique...or even as desireable. Saturation does lead to satiety.

John Ireland

Reces. The USA Gov. put trillons in the market and we still lost nearly a half a million jobs in June! And thats just the ones that have applied for unemployment.
I'm seeing signs of a depression everywere.
A few things doing well ....Upscale resturants?.. And pawn shops..One pawn shop in my area is running a 5-10k USD. "We want your Precious Metals, Watches" add several times a month.
The good news in my opinion? The depession will not drag on for years.....
The bad news................. We will have higher taxes, higher inflation, and less freedom.

Hope I'm wrong,
Michael B.

Forget the prices....
Back to watches...
18K 6265 PN (top left in your picture)
Do they really exist?
Wolfgang

http://www.watches.co.uk/watch.php?wid=0705P

must a been over £20k !!!!

in the first place?

There were plenty of piss taking dealers around when the market went into a 18 month mania, and unfortunately, more than enough buyers prepared to buy into and fuel their never ending story.

$48K for a homeplate? $70K for Tudor BC? Surely these owners are gotta be more than 50% down if they sold now?

As for watches.co.uk anyone buying today will be down by more than 50% by tomorrow with bells on!

http://www.watches.co.uk/watch.php?wid=1438F

Steve

Although I do agree that some watches did change hands at over market value in 2007/8 so did everything else.

Cars, boats, planes, diamonds, art, real estate etc etc
(Currency fluctuations have also distorted this.)


If I had sold my Rolex collection in 2007/8 the amount of any of the above I could have bought is the same as if I sold today.

The only losses are for people who were buying things they could not afford.

Of course in an ideal world I would have sold in 2007/8, sat on the cash for a year and then been buying anything from the list above at todays prices.
Ive never been that clever though

---Perpetual Knowledge---

nt

an orange hand Explorer from Hess just around $10K which would have cost a lot more just 6-10 months ago. Red Submariners are now well below $12K range that sellers were demanding for them. Complete Zenith Daytonas are now in the $10K range which is about half of what sellers were demanding for them before the drop. The cream dial Explorer that I bought for $15K is now worth how much? Yes, I got "Creamed" alright. If my memory is correct, a VRF member just sold a complete Zenith Daytona with inverted six and color changing dial for around $14K which sellers were demanding twice that some months ago. I have been checking out the local authorized Rolex dealers in the states and things are sitting and collecting dust. I remember before one dealer telling me that I will need to wait for at least two years to get my hands on the anniverary green Milgauss, which at the time was selling on Ebay for $12-16K. Well, I think sellers can't even get $7K for them right now. If it were not for the joy that I get from these over priced chunks of steel, I would be pretty upset right now...

Best regards
Orchi.

Best regards
Orchi.

vintage pieces, 5513, 1675. etc. that are w/o B&P and in fair condition have taken quite a hit in my area. Nicer examples and the the more rare pieces have dipped as well, not not as much as the aforementioned items have.
Scott

I see it at shows, at big auction houses, and dealer to dealer sales. Two nice PN's went for $50,00 each at Patrizzi...

Arthur

http://rolexnessreviews.blogspot.com/

Like so many markets, when the prices go up very fast, they are more likely to come down very fast . . . yes, the bubble that is blown up quickly "pops" in what seems like an instant.

While the market for vintage Heuer chronographs is much smaller than the market for Rolexes -- in terms of the prices and the number of participants -- there has been very little decline over the last year, etc. Maybe 10% off some of the high-end watches (McQueen Monacos, contrasting sub Carreras, Siffert Autavias); maybe 15% off some of the "commodity" pieces . . . but nothing like the drops in the sport Rolexes. Prices for many models have been stable.

Jeff