Yesterday, over lunch with the infamous @nycwatchguy and @f1ptb… we discussed the concept of purchases under pressure. In the current environment this issue is far more pronounced, due to the rise of limited editions, the increased popularity of independent watchmakers (who have lower supply inherently) and because of general hype with any popular watches – often fuelled by the influx of profiteers into the watch game, who tend to pose as genuine enthusiasts or collectors. This also raised the question of what defines a “genuine” enthusiast anyway; and when is it ok to sell a watch without being labelled a flipper? Thoroughly enjoyed the conversation, and thought I would share a few of the insights here.
Let’s start with some stories… Mine is related to buying the Bulgari Octo Finissimo Tadao Ando limited edition. This took place prior to the launch. At this time there was only one photo of the piece available (showing only the front, the moon appeared to be yellow paint), and the boutique didn’t have any in stock to view in person. I was informed that the London boutique would be getting very few pieces, and that customer representatives would need to request an allocation from HQ… which could potentially be declined. Therefore, full payment would be advisable, as this would likely secure a guaranteed allocation. Knowing this was a limited edition of 160 pieces, and based on the prior success of the first Tadao Ando edition, I knew the decision was closer to “now or never” than “let’s wait and try it first“. At this point I had tried a ‘standard’ version of the watch, so I knew I liked it, and it fit me well etc… So my exact logic at the time was along these lines: “If I do want to own this watch, I don’t have a choice right now but to pay up, and wait for delivery… hopefully I like it enough to keep it, but if I don’t I am likely not going to lose much, if at all“. So I saw it as a low risk gamble on a watch I only partially knew enough about, and I paid up. I got the watch, and I liked it, so I still have it. Had I sold it, would that make me a flipper? Hold that thought, we can revisit this later.
The next story is from @nycwatchguy, and it took place last week during Geneva Watch Days (GWD). He found himself at Czapek, as they were revealing their new Antarctique Rattrapante. He described it along these lines: “I see this watch and I’m thinking, wow, that’s a lot of watch for 45k… yeah I quite like it, but I’m not sure whether I love it enough to buy it… I probably do, but I can’t know for sure in just a few minutes. I do know that at first glance I like it, and with only 77 pieces made, if I don’t buy it now and I end up having to pay 80k on the grey market, I will be highly annoyed, and probably not do it. I know I won’t have time to think about it because with only 77 pieces made, it will be sold out in no time.” Of course this is paraphrasing the story, and not a direct quote, but you get the idea. Yes, the watch is now sold out, but he is going to be one of those 77 owners, and it looks like he will not lose money if he ends up not liking it, because this is a popular watch and arguably one of the best releases from GWD this year. If he gets it, and end up not enjoying it, does that make him a flipper? Again, hold that thought for later.
The next story is also from @nycwatchguy, but this time explores a different sort of pressure and thought process. He described a time when he was being offered the final AkriviA AK-06 allocation in the USA. This was before the current popularity had set in, and it remained a bit of a gamble in terms of value proposition. He recalled how he wasn’t quite sure about the ‘cushiony’ case. He also had the example of Journe beginning to gain traction, and thought about the potential for this to become equally attractive as a value proposition, whilst still delivering an astounding level of horological marvel – even if the cushiony case wasn’t quite to his tastes. So this was a hybrid decision driven by both horological appeal, but also the potential for immense upside. Remember, @nycwatchguy is a VC investor, so this sort of value bet is ingrained into his thinking anyway. Regardless, it could have gone either way of course; I recall having a similar discussion with Shawn (@watch4moi) to better understand my ‘maximum likely loss’ after buying my Resonance – I knew I wanted it, I didn’t plan to sell it, but money doesn’t grow on trees so I wanted to have a better understanding of my overall downside exposure if I was somehow forced to liquidate the collection. Granted, with the Journe market today, this seems trivial – but at the time, it wasn’t!
What does it mean for collectors?
This post isn’t to offer some sort of magic formula to tackle these scenarios, but more to share some insights into real (first world) problems collectors might face. That being said, if you haven’t read this previous post of mine about improving your decisions, then that’s probably a good place to start. As a general rule… knowing yourself really well, and understanding how to differentiate your own preferences from external influences, will be the best defense against foolish impulse purchases.
Of course, I have written about ignoring value in purchase decisions, and simply buying what you like… so am I now changing my view? No. This mindset is the equivalent of being a zen master to a certain extent, because we live in the real world, and we’re exposed to social media, and most of us have funding constraints. The choice of a particular piece, is also simultaneously a choice NOT TO buy another piece. This means value does matter… and it also means that we can’t delete it from our decision-making process. The key point, however, is that this logic only applies under pressure. If you’re sitting at a Breguet boutique and you find yourself in love with a particular watch, despite the weird lug shape and despite the fact that it will depreciate like any other non-hyped watch… then I believe the mantra of buying what you like should definitely apply. The mere presence of potential depreciation being the deciding factor against the purchase of a watch you truly love, is how I would define the difference between a genuine collector, and a watch dealer or profiteer. Why is that? Well, collecting is a journey, and you win some and lose some – but you definitely learn something either way. A trader is making moves to maximise profit and minimise loss – enjoyment is secondary, since they can enjoy all sorts of watches, they just happen to exclusively pick only the ones which will likely always go up in value, and never enjoy the ones which go down in value.
The earlier stories touched on another point – about the definition of a ‘flipper’. To me this is something that only the buyer themselves will ever know for sure. It is entirely about intent. If the purchase is made with genuine intent to wear and enjoy the watch, but you then find it unenjoyable, then why cant you sell it? That’s part of the journey. If, on the other hand, you buy it simply for the upside profit potential, knowing you never planned to use or keep it, then I think that makes you a flipper. I concede there is grey area here – for example, people who only buy Rolex sports models, knowing they always appreciate – and while they use them and enjoy them, they do plan to eventually sell them to unlock future ‘big purchases’ – are they flippers? Not for me – the key differentiation being that they wear the watches and enjoy them. The fact that they have bigger watch plans but limited funds, makes them normal people! I would argue that these are the people who, money no object, would keep those Rolexes and buy the more expensive stuff as well.
It would be helpful if brands didn’t simply blacklist customers for selling a watch, particularly if it was purchased without seeing it. I think this is where relationship building, along with direct engagement with collectors, becomes invaluable. Brands cannot always know whether someone is a habitual flipper or a dealer masquerading as a collector – but through community engagement, they will soon have much better information which can be used to differentiate between customers. H.Moser & Cie did this “Pioneer tour” (or something like that) – they sent out some Pioneer watches to collectors, who were able to try it out for a few weeks before passing it on to the next collector in the ‘arrangement’. Moritz Grossmann did something similar with Redbar – allowing members to take a piece away and use it as their own. It defies logic that this practice isn’t more commonplace.
This is absolutely subjective… I get that. What happens if you get bored after 6 months? How about 12 months? What is a ‘reasonable’ timeframe to hold a watch, or how long, on average will it take to get bored of a watch? This will vary by individual. A good friend Z (@sometimes_someotherstuff) suggests an elegant solution for this conundrum. Since we can agree that “proverbial line” before which selling is frowned upon, or after which selling is acceptable – is relative and variable – it should be gauged based on the size of one’s collection, or based on how many watches you’ve been through since the start of your collecting journey. He argues, quite compellingly, that you learn about your tastes and preferences by buying and learning by doing. As you go through (or still own) more watches, you’ll have a better sense about what you like and why… and will therefore be less likely to need as much time with a new watch before you can conclude its a keeper (or not). He has a vast collection, so I take him at his word – he’s a bit of a nutter, and only shares stories – but if you ever want some deep collecting advice, he’s another one to add to your list of people to chat to.
I think that’s enough for today! I hope you enjoyed the stories, and look forward to stories of your own in the comments below. A big thanks to @nycwatchguy for allowing me to share his stories, and Z for the brain farts!