The myth of value retaining? Where we go next?

[IWCking]

Well, i actually started putting in my hard earned money in swiss watches since around 7-8 years ago. Back then, except Pam and rollie, most of the ADs still gave very generous discount for some high end brands.

However, I notice that these few years, perhaps with the help of a lot of brothers and sisters here, most ADs seem to start reducing their discount given. Therefore, some of our poisons seem to get more and more expensive in light of the annual price adjustment and lesser discount.

But despite all of these, I am a bit disappointed that most of my collections still have to depreciate considerably  whenever i asked the market trade in rate for my collections. Of course, you may want to say that so long as you like your collections, why bother? True say, but its our hard earned money afterall. So, on one hand, we have concern that if we dont buy it now, the time pieces may just get too expensive later without our reach. On the other hand, if we keep buying, our poison will just keep deepening and its hard to sustain in long term for us without breaking our bank accounts especially since most time pieces will not retain value.
Not sure whats your thoughts on this?

[hanz079]

Watches are not meant to be an investment vehicle anyway.
Just be happy that you still can trade in the used pieces and top up for something new.
If you come from a point of view that even with the annual increases and lesser discounts, by right your collection's value should have grown instead the other way round, then you're bound to be disappointed.

I wonder who started the point of view that watches are a good investment?
Patek? With the auction houses closing sales on million dollar watches?
Those are really rare and exceptional pieces... not all should be treated as such.

The most common question one get on forums is:

"I am buying my 1st serious watch, what's a good watch to invest?"
"I am buying a new _____ (enter any brand here), is it a good investment?"

I have no idea where this "investment" thing came about...
And it seems to be sending the wrong message.

[gloomis]

bro, u must b buying those uncommon brand which discount range ard 35% to 60%. with such discount for sure u cant resist. but tis type of wacth only a handful ppl will know how to appreciate.

for me is simple, i will buy something i like n oso common brand. u wont loose alot when u wan to trade or u might make a little compare to the price u paid previously. so u wont c i m buying uncommon brand even tho i love it so much

[Enkidu]

I have no idea where this "investment" thing came about...
And it seems to be sending the wrong message.

I won't say watches are not worthy investments, but watches are seldom (if not never) good investments. Unless a massive asteroid falls onto Switzerland (especially onto Geneva where this one brand which just released this thing called Sky-Dweller makes its watches) and wipes out the whole watchmaking industry in Switzerland, and the Russians invade eastern part of Germany again, and a big tsunami sinks the whole of Japan, the value of your watch collection will not match the investment if you had put your money into FD or properties or KLSE (very, very carefully in this case).

In 2001, there was a craze on Explorer 1 and 2. I remember the 114270 selling for RM 14.6K at Lot 10 HG. The black dial Ex II was selling for RM 14.5k. If one had bought then hoping they would be good investments, well I guess he'l be deeply disappointed today and wished he had used the money to sign up for a 14-day tour across the Silk Road together with his wife instead.     

[terrenceterrence]

A car is seldom if not a good investment at ALL.

But yet i still see alot of ppl still change cars every couple of years.

A hobby is just that.. a hobby. very few and far inbetween a hobby is profitable. if it is in every single hit... then it's not a hobby, it's a side business; a profitable-enjoyable-side-business. if you see it as an investment, then again, it's an investment like ur funds and shares and not a hobby.

[dpkong]

anyone who buys a NEW watch from an AD and hopes to make profit or suffer little loss when selling the said watch is in for a serious disappointment, even with Rolex.

the moment the AD puts a date on the card and you put it on your wrist and walk out the store, it's a pre-owned watch and you just lost at least 25% of what you paid for it. even if the ADs raise prices 5% every year, it doesn't mean your pre-owned watch will go up 5% as well.

let's say you buy the watch but never wear it or take off the stickers. the AD still dates the warranty card. trying to sell the watch as Brand New In Box a few years later will still not get you the purchase price or better simply because it is out of manufacturer's warranty.

i do wonder why or when watches evolved from a device WORN to tell time to becoming investment pieces.

however, compared to spending on cars, watches do seem to depreciate slower...

[David_cheong]

Well said...dpkong

Now you see why some preloved watches quoted just 30-40% less off the list price just won't do.....unless its a non productive pc

Prices of the more regular pcs that are quoted 50-70% less off list might attract some buyers.

my 2cts
dc

[IWCking]

Of course, buying watch is never for investment purposes. Its pretty much hobby and enjoyment. My point is comparing with car, watches should be depreciating lesser. However, this doesnt seem to be the case, especially if one factor in inflation and hefty service fees.

I always tell people that dont buy watch as buying watch is never a good 'investment'. Someone then told me PP. I told them that run of the mill PP cant retain much value either unless its grand complication such as minute repeater plus per. calender which is exclusive to PP vip. We have seemed how PP 5980 price rocketed and then burst. Let alone other brands.

My point is high end  new time piece is very expensive to own and the pre owned price seem to be unable to catch up. if this is the case, eventually, all this watch collection biz and hobby may collapse one day just like what happened in 70-80 when Jap introduced cheap and reliable quartz?

[Angryrodent]

I've said it before and will do it again... go to the toilet u have nothing to read... its boring! unless you have a watch then you can just sit and admire while doing your other "bussines". If you want a good investment plan.. skip uni start your own company and live in malaysia because you can get great food for almost no money

[dpkong]

To the OP, I hope it won't look like I'm picking on you but stating that you're putting your hard earned money into Swiss watches and then being disappointed at their trade value at a later time does make it look like you expect them to be fairly good investments. And compared to cars, they do depreciate slower. Have you compared the resale price of a 10 year old car against a Rolex percentage wise?

If you're thinking of a Patek, one of those made to order tourbillions, perpetual calendars or minute repeaters might drop in value slower. But then, if you have the disposable income for one of those, losing money on it is the last thing on your mind.

Lastly, you shouldn't be spending 'hard-earned' money on watches as you won't be able to wear and enjoy it as it will eventually get scratched up or worse.

[G.MAC]

The only way that people always claim that they earn money from watches, is if they already have a rare piece and the current going price for the watch is high, then of course they earn money when they sell it. However, this kind of situation is really rare. But generally buying watches for investment is not a good idea.

[ASC]

To the OP, I hope it won't look like I'm picking on you but stating that you're putting your hard earned money into Swiss watches and then being disappointed at their trade value at a later time does make it look like you expect them to be fairly good investments. And compared to cars, they do depreciate slower. Have you compared the resale price of a 10 year old car against a Rolex percentage wise?

If you're thinking of a Patek, one of those made to order tourbillions, perpetual calendars or minute repeaters might drop in value slower. But then, if you have the disposable income for one of those, losing money on it is the last thing on your mind.

Lastly, you shouldn't be spending 'hard-earned' money on watches as you won't be able to wear and enjoy it as it will eventually get scratched up or worse.

+1
Well said!

But, may I add that PP MR, Tourbillon & PC Chrono will invariably appreciate in value ............ 'coz of limited production to one or two pieces per year by the ONLY THREE master craftmen in PP Geneva!

The much easily available PC may maintain or depreciate in value, pending on the model & seasonal craze.

[bwee]

yeah.. i think the general concensus is that watches are never good investment (generally). watch prices go up (in my opinion) due to mere coincidence and after events (eg. watch brands become ultra expensive and exclusive 80 years down the road).
I share the same sentiment in watch collecting.. it is definitely going to hurt our pockets in the short/long run (no thanks to our weak MYR), however, i guess it is the satisfaction derived from buying that holy grail and wearing it often enough to comfort ourselves that our 'investment' was worth it 

[meoramri]

Hobby and business do not mix -

[terrenceterrence]

somehow i find it perplexing that ppl never complain about "investing" in

a. designer clothings; jeans, handbags, wallets...etc.
b. cigarettes, tobacco
c. alcohol
d. 4D
e. car

but yet, whenever it comes to watches... the "investment" and "resale value" always comes into play.

sorry in advance but this is not picking on anyone or anything... just that I find it strange. Buy what you like and what you want, we spent too much time working slogging off our arse to pay interest to the banks. time to be selfish and treat yourself abit and not think too much about it.

[hanz079]

somehow i find it perplexing that ppl never complain about "investing" in

a. designer clothings; jeans, handbags, wallets...etc.
b. cigarettes, tobacco
c. alcohol
d. 4D
e. car

but yet, whenever it comes to watches... the "investment" and "resale value" always comes into play.

sorry in advance but this is not picking on anyone or anything... just that I find it strange. Buy what you like and what you want, we spent too much time working slogging off our arse to pay interest to the banks. time to be selfish and treat yourself abit and not think too much about it.

Yalor....we slug day n night to pay for mortgage, car payments, astro, water n electricity, fuel, food, kid's education, tuition, piano classes, ballet classes.... I think a watch's value retention is the least on my mind...
Guess what? Besides my 2 properties, everything i own seems to lose value pretty quickly... Cars, Gadgets and electronics specifically.
Terrence is spot on...
We dun hear ppl complaining lv bags losing value... Or any designer item for that matter...
Why watches seem to give ppl a sense of unjust when it loses it's value...
Which come to a simple question... Who got this type of mentality started?

[Angryrodent]

well alcohol its easy the get some money from... wine and whiskey has good raise in price like i bought 4 bottles of the Swedish whiskey Mackmyra...sold em with 200% profit a couple of months later.. only a few thousand bottles were made it was the first batch everyone in sweden who like whiskey wanted one... sold out the first day so i could just put em up for sale at double the price

[Godzillaz]

Like you I have plough in my hard cash for theses call swiss mechanical. Like you I also weep on the moment my friend told me how low they pay for the same watch that I have(Seamaster James Bond) thru used market. They always tease me on I should wait till it's available on the used market.

I did what they said, only to see the price of the watch tripled (PAM 249) and lose the chance to buy it.

Am I upset? You bet.

But that's life.

Through out all these years I have learn a few things.

1. The collectable market is just like the share market. For 1 gold nugget there's many lemons.
        i.e. For 1 PP5970 there's many quartz Twenty4.

2. The seller will never tell you which is the nugget but gladly sell you all the lemons.
        i.e. Ever try to ask for PP5970 or better yet the SS Daytona black dial at retail price? Forget about discount.
              Consider yourself lucky if the price is less than 15% premium.

3. This is the best I have The nugget always appears to be less desirable than the lemons.
        i.e. A 50s/60s Omega Constellations Pie Pan dial could be had for RM800 or less and you can go on and buy lots of them because    no ones like them. Great movement (better than rolex!), Super fine dial and in gold some more. All stop until 3 years ago. The price now is about RM3k~RM4k.

Here is where I tell you that I'm not that smart. I didn't get them at ratus. Ribu is what I paid. Why? because 4~5 years ago everyone is into big watch. No one care for these little jewel (34mm~35mm). I sure didn't and when I did it was too late. Price have gone up.

This sort of info is not easily obtainable and have to spend time going deep into research and understand how the watch industry works. Then maybe we can land ourself a heavily discount unpopular watch but price will grow 4~5 times over the next decades.

There are people doing this for living and they are sharp, fast and financially equip. Not a easy game to win, my friend.

It sound to me you're frustrated about your watches losing value. May I ask does that makes you love them less?

That's the ultimate goal isn't it? We are into this because we love watches.

Regards
T
 

[Enkidu]

Hobby and business do not mix -

These 6 words of yours sum it up so well!!!! 

[dennis.T]

You lost the fun once you mix the hobby and business... If you are calculative/money minded in your hobby thn that is biz not hobby...

[Enkidu]

You lost the fun once you mix the hobby and business... If you are calculative/money minded in your hobby thn that is biz not hobby...

......but deeeeeeeep down all of us also want a hobby that also makes money 

[terrenceterrence]

Deep down also .....we also want a wife that looks like Maria Ozawa 

[Godzillaz]

but haven't slept with as many men as the real life Maria Ozawa. :-P

[Enkidu]

Deep down also .....we also want a wife that looks like Maria Ozawa 

So, you want to (i) collect beautiful watches, (ii) the beautiful watches must increase in value beautifully, and (iii) you also want a "Maria Ozawa" beautiful wife.  Your standards are truly very high. 

[dpkong]

somehow i find it perplexing that ppl never complain about "investing" in

a. designer clothings; jeans, handbags, wallets...etc.
b. cigarettes, tobacco
c. alcohol
d. 4D
e. car

but yet, whenever it comes to watches... the "investment" and "resale value" always comes into play.

sorry in advance but this is not picking on anyone or anything... just that I find it strange. Buy what you like and what you want, we spent too much time working slogging off our arse to pay interest to the banks. time to be selfish and treat yourself abit and not think too much about it.

i guess mainly because this is a watch forum so posters tend to only complain about how watches end up as not very good investments. if you want to bring in clothing, cars, 4D etc, i would like to add kids into the list as i wonder how those investments are going to end up...