Buying for investment, recommendation and the idea that only above a certain value counts?

Thread: Buying for investment, recommendation and the idea that only above a certain value counts?

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  1. #1
    Member parks11's Avatar
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    Cool Buying for investment, recommendation and the idea that only above a certain value counts?

    I'm new to the idea of watch collecting but very interested in it. I'm a student now but I would like to start investing in vintage pieces to start building a collection. My research though has lead me to believe watches that arent from a few very collectable makers (Patek Phillipe, Zenith, etc) seem to depreciate rather than appreciate. It seems that unless a watch is over $10'000 it will have little change of holding it's value, let alone appreciate? What are your thoughts on this?

    I have become fascinated in vintage 40s and 50s Omegas that retail for about $200 dollars, and since the majority of it is just in owning the watch but a small requirement is that it holds or goes up in value, would these actually do the trick?

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    Member Marrick's Avatar
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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    You may find this article of interest:

    Take time and watch your money grow - Spend & Save , Money - The Independent

    But its a bit like collecting vintage cars or antiques in general. Fashions come and go, 'values' go up and down, and there are never any guarantees. Moreover, if you spend a lot on a watch and it turns out to have unforeseen problems, then it will almost certainly be a poor investment.

    Vintage Omegas are particularly likely to be dodgy - as the brand is well known and highly regarded. Therefore, unscrupulous sellers can 'modify' the more mundane models and pass them off as more sought after ones. For example, just by having the watch redialed with a certain word added. In the short term, it is very hard to make money out of buying and selling watches unless you can buy watches with problems and fix them yourself.

    Having said all that, if you buy a nice vintage watch in good condition at the right price it will probably retain its value much better than a new watch for the same money and may, only may, turn out to be a good investment. But you need to know your stuff - there are fake vintage watches being produced and sold as well as new models. Try googling 'replica vintage omega seamaster' or 'replica vintage zenith' - don't post any links in here though.

    Anyway, others will add their views.
    Everybody is ignorant, only on different subjects."

    Will Rogers (1879 - 1935)


    Please don't PM me to ask for a valuation - I won't attempt one.

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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    Simply forget the aspect of ever getting money out of this and accept it for what it is: A more or less expensive hobby. If You do want to earn: Try to buy good stuff cheap. You can't figure out how? Wellcome to the club .
    I think there is only one way to really earn money on watches, and that is to dupe people who don't know better - place some adds, go to garage sails or flee markets whatever. Make sure You don't get duped Yourself. Btw, to "dupe" someone is not a very moral thing to do in my eyes.

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  5. #4
    Member parks11's Avatar
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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    Brilliant. Some fantastic information there. I think primarily I will acquire peices for sentimental value first and as I work my way up the corporate ladder buy something more investable :)

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    Member Eeeb's Avatar
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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    Knowledge can be converted into money. But if your goal is to maximize the money, get into real investing... all watches are just speculation not investment and speculation is often risky.

    If I could break even on selling a vintage watch I bought, I would consider myself 'on target'... And I would never expect to break even on new watches unless I acquired them for 75% off list (which I can sometimes do, but not often).

    But I used to collect and restore and drive vintage BMWs. That's a money pit! (Of course, the sales folk always called them 'investments' )
    "Forever is composed of nows." - Emily Dickinson

    "The watch has to be surrounded by a history.
    You need more than just a great design. You need to create an atmosphere around the product.
    Who is the company behind it? Why are they using this material?
    People need to be able to identify the watch with themselves. It's based on emotion." - Ralph Furter

    ...that's just my opinion and I've been wrong before and will be again and might be now!

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    Member parks11's Avatar
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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    Quote Originally Posted by Eeeb View Post
    But I used to collect and restore and drive vintage BMWs. That's a money pit! (Of course, the sales folk always called them 'investments' )
    So very true! haha. But theres a certain charm in an old watch that a car just doesn't bring but as you say just speculation, you never know, one day the guy whos great granddad wore your watch in WWI might discover you selling it and pay you a fortune ;)

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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    Invest in an education.

    The most certain money in watchmaking as a hobby is in being able to service watches for other collectors.

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    Member parks11's Avatar
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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    Quote Originally Posted by bjohnson View Post
    Invest in an education.

    The most certain money in watchmaking as a hobby is in being able to service watches for other collectors.
    Such a good point.

  10. #9
    Member JohnF's Avatar
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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    Hi -

    As others have said, quite rightly so, no watch is an investment: they do not generate a cash flow. Buying a watch with the intent to resell at a higher price is not an investment of any kind whatsoever: it is a speculative purchase. Might sound like splitting hairs, but it is most definitely not.

    That said: as with any speculative object, the key to value increase is condition, condition, condition, rarity, and then condition. If there is a special provenance to the watch - say, it was owned by James Dean - then this needs to be documented in such a way that it would hold up in a court of law (like the receipt for the watch with the serial number, made out to James Dean in the original with his signature thereon). There are a lot of scammers and wannabes out there aiming at making a buck.

    Given this, plus the fact that when you decide to end your speculation and sell the watch, you may want to use auction services and the like to ensure a very high price (but with the resulting costs calculated in), the watch will only bring you a profit if it is indeed a rare watch in exquisite condition. You need to consider first the cost of cleaning and polishing a vintage watch; necessary repairs and restoration where needed/applicable (which may, however, reduce the value of the watch!), storage costs, then selling costs etc etc etc. Don't forget to report the income to the tax authorities as appropriate as well.

    This is where the problems then begin: you need to store it properly and be willing to maintain it so that when it is sold, it is in the best possible condition. If anything, you should choose a watch that you believe will appreciate within a 10 year time period and then have it serviced before it is sold: if it is an older watch that hasn't had much servicing, have your watchmaker (you do have a good working relationship with a relatively young watchmaker, right? Sort of like what you need with a mechanic when selling vintage cars...) remove all oils and greases during storage. Work with the watchmaker to do a clean and lube before you sell it, and have him document how the watch is performing with a timer printout. The better the performance is documented, the better your watch will sell at the price you want to sell it at.

    Perusing eBay in the hopes of picking up some unknown legend is pretty much a lost cause (there are exceptions to the rule).

    I know of speculators who buy top-end watches (from €30'000 up) in batches from ADs, dropping up to €150k in a month or so, waiting for them to arrive and then turning some around immediately to those unwilling to wait the 6 months or so some of these watches take to arrive, storing the rest for 5-7 years and generally getting a rate of return from their speculative purchases that is around 15% when you calculate their actual profits over time.

    However, choose the wrong watches, ones that fail to achieve cult status, and you'll be lucky to break even over 20 years, let alone make any money. This is a professional's business, usually by someone with very deep pockets, and it is a very difficult business to break into (no pun intended) unless you have a background in the industry and have the connections you'll need to know what will be available well in advance, as well as extensive contacts amongst those who think nothing of dropping €70k on a watch.

    JohnF

    PS: I recently acquired the first watch I have bought for speculative purposes. It's a true NOS classic from the 1970s, increasingly very rare, is arriving tomorrow and my intention is to store it safely and sell it in five years' time. The sum involved is less than $1000 and I hope to sell it in five years for at least 50% more than I paid for it, as it was one of the last of its kind available truly NOS. Stay tuned...
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  11. #10
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    Re: Buying for investment, recommendation and the idea that only above a certain value cou

    Wow, it's been a few months since somebody came up with this idea. I get to use my favorite line: Know how to make a small fortune in vintage watches? Start with a large fortune.

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