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THE BROAD VIEW

Watches are the new bitcoin

In a market where stocks, bonds and real estate are at an unsteady peak, vintage watches offer a new alternative.

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Next-generation collectors are seeing old timepieces not just as a subtly stylish way to dress up a T-shirt and jeans, but also as a hot new asset in their investment portfolios. Seen above are details of a 1966 Rolex Submariner, reference 5513, featuring a gilt, metres-first dial; a "long 5" bezel; a so-called Bart Simpson crown logo; and plenty of patina.

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Guitarist John Mayer estimates the value of his watch collection in the tens of millions.

AS tattooed rockers, tech bros and Instagram influencers pile into the tweedy world of watch collecting, prices for sought-after classics from brands such as Rolex, Omega and Patek Philippe are shooting up. In some cases, they have doubled in just a couple of years.

These next-generation collectors see old timepieces not just as a subtly stylish way to dress up a T-shirt and jeans, but also as a hot new asset in their investment portfolios. In a market where stocks, bonds and real estate seem at an unsteady peak, do vintage watches present a bitcoin-in-2017-like growth opportunity? Or are they in a bitcoin-in-2017-like bubble?

Time - elegantly monitored - will tell.

Even though his investment in watches has doubled in value in just 18 months, Peter Goodwin, a private investor in Charlottesville, Virginia, who also collects watches, said that he is concerned about frothiness in the vintage market.

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"It's much like momentum investing in stocks," he said. "People see the rise in Facebook shares, they see Mark Zuckerberg, and they want to ride it up. It is the same with the trendy watches we read about in the auctions - the Paul Newman Rolex, the Omega Speedmasters, some Submariners. You see them rising and you want to jump on." "The question," he added, "is when does it stop?"

Watch collectors hide in plain sight. John Mayer's watch collection is nearly as famous as his guitar work. His bank vault contains a vast array of collectibles, including sapphire-encrusted gold Rolexes and Luftwaffe watches from World War II, that he has said are valued in the "tens of millions".

Silicon Valley heavyweights such as Kevin Rose, the Digg founder, and Matt Jacobson, Facebook's employee No 8, have museum-worthy Rolexes and Patek Philippes, helping to establish a head-turning timepiece as a tech-world style flourish to rival the hoodie.

Ellen DeGeneres wore a holy grail Paul Newman model Rolex Daytona from the 1960s, now worth perhaps US$250,000, while bantering with Jerry Seinfeld in an episode of Comedians in Cars Getting Coffee last year. (Adam Levine and Ed Sheeran have been spotted wearing Paul Newmans as well. One also made a cameo on the wrist of Pierre Png's character in Crazy Rich Asians.)

In professional sports, high-end timepieces have long seemed as indispensable as a shoe contract for stars with seven- and eight-figure incomes. Top athletes including Rafael Nadal, Dwyane Wade and LeBron James have served as celebrity ambassadors for brands such as Richard Mille, Hublot and Audemars Piguet.

Star players who have been traded have been known to trade a Rolex to a player on their new team to secure their old jersey number. And in recent years, several have morphed into certifiable watch snobs. Howie Kendrick of the Washington Nationals, for example, counts understated heirlooms, like a 1959 LeCoultre Deep Sea Alarm and a 1960s Breitling Superocean, as key elements of his off-field uniform.

If you are still one per cent-ish but would prefer to dabble, there is good news. The Watch Fund, run by Dominic Khoo, a shareholder and watch specialist with the auction company Antiquorum, offers people a chance to invest in rare and limited-edition watches at prices that can be 50 per cent or more below retail. Those who have bought in have seen at least double-digit returns since the fund's inception six years ago, Mr Khoo said.

Star power and funds like Mr Khoo's add credence to the idea that fine watches are a soya bean or copper, another investable commodity. But does that make them a good investment?

What even makes a watch valuable? Consider the bezel insert from a 1957 Rolex Submariner. A bezel insert is the featherweight aluminium disk with numbers on it that surrounds the dial of a diver's watch.

On Submariners made in the third quarter of 1957, the bezel insert was made with an unusual red triangle at 12 o'clock and slightly different typography on the numerals. Because it is rare, that insert is so sought after by collectors that it can fetch more than US$30,000 these days, said Eric Wind, a dealer of fine vintage watches in Florida, up from maybe US$10,000 just a few years ago.

None of this necessarily makes sense. It is not like a vintage watch is better than a new one. In fact, it is worse in almost every way. Which is, naturally, why old watches are considered cool: They have patina, provenance, soul. And for a generation of men (and yes, vintage watches seem to be an obsession largely for men, with apologies to Ellen) who value the analogue chic of antique mechanical watches - just like vinyl records and selvedge jeans - that is key.

"Vintage watches should show off their age," said Nelson Murray, a 31-year-old photographer and budding collector in San Francisco. Vintage sport watches, like his Rolex GMT-Master, a classic pilot's watch from 1980, "evoke a sense of adventure and a kind of dare to add more dings and scratches to them as evidence of a life lived".

Benjamin Clymer, the founder of the watch site Hodinkee, which has evolved from a one-man watch blog to a market-moving editorial and e-commerce site selling new and vintage watches, has been practicing a form of horological arbitrage with his collection for years.

In 2012, for example, he bought a Patek Philippe Nautilus, a triumph of 1970s mod design that conjures images of Concorde flights and fondue parties, for US$18,000. That watch is worth at least US$75,000 today, Mr Clymer, 36, said. That is not his only home run as a watch investor.

"I have a distinct memory of a friend who is now one of the great vintage dealers in the world calling me crazy for spending US$30,000 for an early 1950s Omega Speedmaster," he said. "The same watch today would be well north of US$100,000."

With wrist shots flourishing on Instagram and watch sites such as Hodinkee, Worn & Wound and Monochrome spreading arcane watch knowledge to the masses, collector demand is spreading beyond behemoth brands like Rolex and Omega to lesser-known makers such as Universal Genève.

One particularly coveted version of that venerable Swiss maker's Compax chronograph famously graced the wrist of Nina Rindt, the fashionable wife of the 1970s Formula One racer Jochen Rindt. It began trading as high as US$45,000 recently, up from maybe US$2,800 in 2011, although the market has cooled of late, Mr Wind said. The same model might trade for US$20,000 to US$30,000, he added.

But no watch has exploded in value like the Paul Newman Daytona. It is a car racer's chronograph that once was considered something of an afterthought in the watch world. Joanne Woodward accidentally made it iconic when she bought one for Newman, her gear-head husband, in the late 1960s for about US$250.

Those were the days. After Newman's own Paul Newman attracted worldwide headlines by selling at auction for US$17.8 million after a mere 12 minutes of bidding in 2017, every Paul Newman suddenly seems to be trading like a Picasso.

A coveted version known as an Oyster Mk 1 "panda" went for more than US$750,000 at a Phillips auction in Geneva this past spring, a figure that shocked Mr Clymer, who once owned that very watch.

"The Oysters are something really special, and go well beyond ticking the box for a rich guy to prove he's cool," Mr Clymer added. "I bought this watch in the twos, sold it in the threes, and I thought I was the smartest man in the room. How could a steel Daytona break US$400,000?"

Not every old watch has value. Anyone who scoops up a cheap boxful of half-working Bulovas from the 1950s at a flea market is likely to end up with a cheap boxful of half-working Bulovas from the 1950s.

Already, some sure things, like certain Daytonas, are looking like slightly less than a sure thing.

"The market for Daytona just got a little silly for awhile," Mr Clymer said. "We saw references worth US$20,000, US$25,000 in 2011 to 2015 all of a sudden worth US$50,000, then all of a sudden worth US$80,000. And now those same references are worth US$65,000. That's still significantly higher than they were, but they've come down from the stratosphere."

During the bear market of 2008 to 2009, too, prices for some high-flying vintage models, including Paul Newmans, dipped by 30-40 per cent, said Matthew Bain, a dealer of fine watches in Miami Beach. But, like stocks, they bounced back to new highs.

The rebound may seem intoxicating. But people who think of their watch collection as an alternative to an E-Trade account may be in for a rude surprise when they discover that watches often come with sizable dealer fees, not to mention substantial outlays for insurance, secure storage and other hidden costs, Mr Khoo said.

"Investors are not collectors, and collectors are not investors," Mr Khoo added. His Watch Fund has a database of "more than 9,000 watch collectors worldwide", he said, and "I have never met someone who bought hundreds of watches that he liked, and sold 100 per cent of them for a net absolute gain."

In other words, newcomers to the watch world may want to heed the warning attached to brokerage advertisements on television: Past performance is no guarantee of future results.

Or, they may just want to buy whatever looks cool and leave it at that. NYTIMES


Six up-and-coming collectible watches for your bonus cheque

IF you didn't scoop up a $200,000 Paul Newman-model Rolex Daytona a couple of decades ago, when they were selling for a tenth of that price, you missed your chance.

All is not lost, however. The New York Times asked prominent dealers and experts to identify six up-and-coming vintage watches that are still reasonably priced - by high-end watch standards - and that stand a chance to outperform as investment assets.

Seiko 6105

Vintage Seiko diver's models such as the 6105, the 6217 and the 6309 offer a tremendous bang-for-the-buck proposition, with prices from around US$1,200 to US$4,000. With classic no-nonsense tool-watch looks and tough-as-nails Japanese mechanical movements, these watches are high on style and value, as well as offering some rich history in a field dominated by their Swiss counterparts - which, of course, come with much higher price tags. The key in collecting here is to make sure you're buying untouched, honest examples. The market is rife with refinished dials and aftermarket components.
- James Lamdin, founder, Analog/Shift, New York

Heuer Camaro

The Camaro had a distinctive cushion shape that seems like a perfect companion to the fashion of the late 1960s and 1970s. Designed and produced by Piquerez, a famed manufacturer of watch cases, it was introduced in 1967, and seems to be a clear predecessor of the celebrated Monaco, the famous square watch Steve McQueen wore in Le Mans. While other Heuer models such as the Autavia and Carrera have gotten serious attention from collectors, the Camaro remains a model that has quietly gained its own cult following.
- Eric Wind, Wind Vintage, West Palm Beach, Florida

Rolex Submariner (reference 16800)

This model is underappreciated and undervalued. The 16800 is frequently referred to as a "transitional" Sub because it was the first Rolex sport model to have a sapphire crystal along with the quickset feature that allows you to change the date by just turning the crown. Personally, I prefer the earliest versions of the 16800, made from 1979-83 with matte dials and luminous markers directly applied to the dial, as opposed to later versions with glossy dials and luminous white gold markers. Retail can run from a low of US$8,000 to US$15,000 depending on condition.
- Paul Altieri, founder, Bob's Watches, Newport Beach, California

Breitling Top Time chronograph

Classic round design with contrasting black-white subsidiary dials. This model was used in the 1965 James Bond movie, Thunderball. It is available in steel or gold plated, but I would go for the gold-plated version. Breitling is about to focus more on their heritage and the prediction is this will drive up vintage Breitling prices across the board. Bond wore a modified reference 2002 that Christie's auctioned for over US$100,000. A regular Breitling Top Time chronograph, reference 2002, from the 1960s, should cost around US$3,500 for a good example. Two-tone dials are currently more desirable.
- Charles Tearle, vintage watch consultant and broker, Los Angeles

Omega Speedmaster (circa 1970 or 1971)

In 1969, the Speedmaster was the first watch worn to the moon, and it became the official watch of Nasa for many other space missions. It is a highly collectible watch and sought after by major collectors around the world. The 1970-71 is under the radar, and a great watch to buy right now for US$5,000-6,000. It's rarer than the 1969 model, with the same configuration, and fewer were produced than the 1969, which trades for US$7,000 to US$10,000.
- Matthew Bain, founder, Matthew Bain Inc, Miami Beach, Florida

Rolex Datejust (reference 1600)

Datejusts have always been the bread and butter for the Rolex brand, and still are today. They made so many, however, that they kind of get overlooked in terms of being a collectible watch. The vintage Datejust, references 1600 and 1601 in steel, can be found under US$4,000, and even in solid 18-karat gold with gold bracelets for under US$10,000. They are timeless and iconic and have always been undervalued.
- Andrew Shear, Sheartime, New York