Can Watch Investing Really Be Profitable?
Watch Investing - Explained
Ladies and Gents,
We’ve all seen that stupid guy on the street who wears Ralph Lauren, gets out of his Bentley, and points at some random object just to flex his Patek Phillip watch. What if I told you that the Patek Philippe was actually an investment? This imaginary man is going to make tens of thousands of dollars, just by reselling his watch. Ladies and Gents, I’d like to introduce you to the world of watch investing. So, let's put on our most pretentious hats because it’s time to talk about watch investing.
What Is It?
Watch investing really is what it sounds like. You buy a watch, and it appreciates (increases) in value. However, don’t go out to your local watch store and buy some random watch, because it won’t appreciate in value. There is only a select niche of watches that actually appreciates in value.
There are a variety of factors that determine whether a watch will appreciate or not. First and foremost, however, is the quality of the watch. Watches only appreciate in value if they’re well made. Luxury watches, if not damaged, will hold their quality for decades. Using high-end materials like sapphire, gold, titanium, and platinum (which also contribute to the price), watches can last for decades and still hold their quality and price (similar to jewelry). While the materials that are used help the watch hold its value (and somewhat appreciate), it is the brand and model that really causes a watch to appreciate in value.
Perhaps the best watch investment right now is any Patek Philippe. As the newest (and hottest) luxury brand on the market, Patek Philippe has been worn by celebrities around the world (most notably by Cardi B, who helped put Patek Phillipe on the map).
There are a few reasons why Patek Philippe watches appreciate in value. Besides the materials used, the watches are also meticulously crafted. Every part is handmade, and one watch can take anywhere from nine months to over two years to make.
Patek Philippe watches are also incredibly rare. Since its founding in 1839, Patek Philippe has made less than one million watches. To put this into context, Rolex, a brand also renowned for its scarcity, has made well over one million watches.
Both Patek Philippe and Rolex are great examples of what makes a watch investment possible. Materials, craftsmanship, rarity, and condition all play a huge factor in a watch investment.
Are They Actually Good Investments?
At this point, I know everybody is wondering how good of an investment a watch can actually be. Between the periods of August 2018 to January 2023, brands like Patek Philippe, Rolex, and Audemars Piguet saw a yearly price appreciation of an estimated 18-20%. This far outpaced the S&P 500, which increased by approximately 8% per year in the same time period.
Hold Your Horses There, Cowboy
Don’t go blowing your next paycheck on some watch you can’t afford. While watch investing can be profitable, it comes with inherent risk. Value appreciation is driven by market trends, which can often be unpredictable and risky. Watch investing also requires intricate knowledge of watches and the markets that come with them. What’s popular one minute can be unpopular the next. Stories and watch history are also extremely important factors when selling and buying watches. Forgeries are also very common, so buying a pre-owned watch can be risky, especially for an amateur.
For those who can afford a luxury watch, the risks that come with watch investing tend to matter less. Those who can afford it often buy luxury watches for the style and enjoyment it brings them, and the appreciation in value is just an added bonus when they sell it.
Do I, H.R. Berry, condone owning a luxury watch? No, I don’t. Luxury watches are horrendously pretentious. Many of them also just look flat-out stupid. Take the image below for example. The watch got its name “The Cartier Crash” after a watch owner brought in his deformed Cartier watch for fixing after a car crash. The first edition of this watch just recently sold for $1.65 million at auction. Later copies are selling for hundreds of thousands of dollars. And it just looks stupid.
The Random Shower Thought Of The Week
When my dog brings me the same toy, I wonder if it's his favorite toy or if he thinks it is my favorite toy.
Whoa, fetch will never be the same.
Ladies and Gents,
I hoped you enjoyed “The Random Thought Of The Week”. As always, share this like your life depended on it. Send it to your mother and see what she thinks. Stay tuned for next week’s post! As always, I’d like to leave you with a quote from two great philosophers, Bill and Ted. “Be Excellent to each other, and party on dudes!”.
Talk to you next week,
H.R. Berry