The elephant in the room, spending big $$$

[systematic.entropy]

Why has nobody explicitly come out and acknowledged that the best hope of sustaining in this hobby is to spend big money. Talking pre-owned numbers here. I mean, sub $5,000, typically, you have nearly zero value retention. Whereas, when you get into the $20,000+ value retention is a huge qualifier. A $5k Breitling will go for $1500 in a few years. A $25k AP... will probably still be in the $20s. Of course there are exceptions. But, it seems like the only way to really stay in the game, or at least minimize loss, is in the upper tier.

I often wonder why, so much of the collecting community seems to promote and embrace simply poor buying decisions. I know there are many reasons to collect, and for some, it is just aesthetics. But even still. I see so many collections and discussions that are basically throwing away money (and by extension, your ability to stay in the hobby).

Does anyone else agree?

[Helmi]

I agree that value retention is very important. In fact, if value retention is not there, I wouldn't collect as much as I am doing right now. And I agree to retain value you need to purchase certain models. But there are brand like tudor that keep value well (certain models) while being in the sub 5k category. The sweet spot for value retention is 8-12k steel rolex. In upper tiers (I.e. 25k+), not necessarily all brands/models kerp good value. In fact only few brands/models do. Namely nautilus from patek and some RO from AP. Mostly everything else (jlc, Ulysse Nardin, iwc, vacheron Constantin, Panerai, Gerard perrigoux...etc) loose big % if you purchase at MSRP. Hence the rule applies in all categories and you need to know what you buy in order to retain most value

[systematic.entropy]

Originally Posted by Helmi

I agree that value retention is very important. In fact, if value retention is not there, I wouldn't collect as much as I am doing right now. And I agree to retain value you need to purchase certain models. But there are brand like tudor that keep value well (certain models) while being in the sub 5k category. The sweet spot for value retention is 8-12k steel rolex. In upper tiers (I.e. 25k+), not necessarily all brands/models kerp good value. In fact only few brands/models do. Namely nautilus from patek and some RO from AP. Mostly everything else (jlc, Ulysse Nardin, iwc, vacheron Constantin, Panerai, Gerard perrigoux...etc) loose big % if you purchase at MSRP. Hence the rule applies in all categories and you need to know what you buy in order to retain most value

Can't bring MSRP into the conversation, less, Rolex, AP, PP. you simply can't pay MSRP for anything you will not consider a forever watch. Especially in the high horology sphere. Only considering pre-owned prices in this conversation. To your point on JLC, UN, IWC, preowned isn't terrible. They drop a couple percent year to year, but a preowned $20k IWC perpetual calendar will always trade above a Hublot three hander, even a new Tudor three hander. As long as less expensive alternatives occupy that space, the IWC will exist above it.

I'm not saying all high ticket items have good retention. I'm just saying the only hope of having the best chance of retention is in the upper end. And that the lower end has a higher pay to play, and why does no one say this to anyone entering the hobby. Just frustrates me.

[Playinwittime]

My philosophy is for new model Rolex purchases to be made at MSRP from my AD whenever possible, usually eliminating risk of fakes, reducing price and preserving warranties in most cases. The other purchases tend to be below $5k for precisely the reasons you articulate. I am not in the class of those that can “waste money” on $50k+ purchases without the hope or concern that the watch will retain its value. I agree that a forever watch could make me interested, but that would likely be a single purchase. While we all know that investing in watches is a poor choice compared to other avenues, to buy expensive watches with reckless abandon, and not try to buy pieces you want with knowledge they will likely appreciate or maintain their value, is a game for the truly wealthy only.

[gretch6364]

If you are collecting watches to someday make money on them, you may want to switch to collecting something else. Obviously it can be done, but it is a hope and a prayer and you need to be honest with yourself when you purchase something.

[GB-man]

If you plan to keep a ledger and buy and sell you will need a big bankroll just like most other commodities. We use to tell people all the time here that they should spring for that sub or gmt over xyz for value retention alone. Now everything is out of whack.

[SG56]

yeaaah, no.

I will buy what i like, not what the market tells me.

Did i think that my 37mm YM will retain its value? Nope!

Don't care. Life is short. Embrace the scratches.

[systematic.entropy]

Originally Posted by gretch6364

If you are collecting watches to someday make money on them, you may want to switch to collecting something else. Obviously it can be done, but it is a hope and a prayer and you need to be honest with yourself when you purchase something.

No, for sure, the "making money" is a pipe dream. But, you can be a smarter buyer in hopes of minimizing cost. But, of course, buy what you like should trump the economics of it.

[_speedmaster_]

This is patently false. Certain brands and models retain value. Value retention is not dictated by price.

[systematic.entropy]

Originally Posted by _speedmaster_

This is patently false. Certain brands and models retain value. Value retention is not dictated by price.

???

Umm, agree. Not saying retention is not dictated by price. HOWEVER, pieces in the higher end tend to have a higher likelihood of having better value retention.

At least looking at the ends, preowned numbers, fashion brands excluded, something in the $1000-$2500 range is incredibly likely to drop to near zero eventually. Where are something in the $20k+ range. Will always be worth something significant.

[capote]

Originally Posted by _speedmaster_

This is patently false. Certain brands and models retain value. Value retention is not dictated by price.

+1 however the brands that retain value are often expensive to begin with

[brandrea]

Buying Rolex SS professional references at MRSP is about as good a value as there is. Certainly not higher up the food chain.

[systematic.entropy]

Originally Posted by capote

+1 however the brands that retain value are often expensive to begin with

That is what I am trying to illustrate, and this is just my brain droppings. The likelihood of better value retention tend to occur more frequently in the upper end. And that on the lower end, things have a significantly higher likelihood to go to zero.

[shaunylw]

Originally Posted by systematic.entropy

Why has nobody explicitly come out and acknowledged that the best hope of sustaining in this hobby is to spend big money. Talking pre-owned numbers here. I mean, sub $5,000, typically, you have nearly zero value retention. Whereas, when you get into the $20,000+ value retention is a huge qualifier. A $5k Breitling will go for $1500 in a few years. A $25k AP... will probably still be in the $20s. Of course, there are exceptions. But, it seems like the only way to really stay in the game, or at least minimize loss, is in the upper tier.

I often wonder why, so much of the collecting community seems to promote and embrace simply poor buying decisions. I know there are many reasons to collect, and for some, it is just aesthetics. But even still. I see so many collections and discussions that are basically throwing away money (and by extension, your ability to stay in the hobby).

Does anyone else agree?

I agree minus the sub 5k part. you can get a 3350.70 for $3500, a 16570 for around $4500. Both of which will not be tanking. Omega 2254.50 for about 2k, thats not going anywhere. There are tons of watches sub 5k that will not tank, however, not very many will likely be big appreciators in the future.

If you have Patek money, your cash is going to be safe forever. It's hard for most people to pull the trigger in that range though. I feel that buying mass-produced Rolex for significantly over MSRP, with the exception of the Daytona, needs to be more about really loving the watch vs value retention. If you are spending 16k on a BLNR, I don't think it's going to work out very well for you if the long term plan is to make money. If you buy it saying, screw it, I want it and I love it. I think that's great, wear it in the best of health!

[astewartconst]

I agree and value preservation has always been a focus for me in watch, knife, edc hobbies. I don’t think you have to be in a $20k plus price point to find that though. Look at this Blancpain I picked up 6 months ago. It’s a mid 90s basically bnib condition. I got it for $4,600 now I don’t expect to make money on it but I can’t believe how I can lose either at this price. 38mm highly detailed case and dial, FP1185 chrono with flyback. I think you can sustain the hobby if you buy depreciated high quality watches.





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[Brew]

Would you rather look at a watch you don't really care for every day, waiting/hoping for some eventual payoff for your troubles, or just buy what you like? I'll take the YM too, thanks.

[_speedmaster_]

Originally Posted by systematic.entropy

That is what I am trying to illustrate, and this is just my brain droppings. The likelihood of better value retention tend to occur more frequently in the upper end. And that on the lower end, things have a significantly higher likelihood to go to zero.

It depends what you mean by upper end.
I don't consider Rolex an upper echelon watch brand, and they likely have the strongest value retention in the industry. Higher end brands, like Breguet and VC have mostly bad value retention.

[bobernet]

Setting aside dealers, as running a business is different than a hobby, the smart move has always been to buy right at any price point.

I’ve made dumb decisions and lost money when I sold/traded for something else, and I’ve done well in some cases when I’ve moved on.

I’ve never been seriously hurt by buying right. For a desirable Patek, that might mean paying MSRP. For an ALS or gold Rolex it means finding a good discount or buying gently used.

That holds true whether it’s Richard Mille or Omega. Ultimately, I’m ok being even or losing a little over the long term. I’m in this for the watches not the $$. I’d rather take a loss on a watch I really enjoyed owning and wearing than making a little money on something I never wore.

[systematic.entropy]

Originally Posted by _speedmaster_

It depends what you mean by upper end.
I don't consider Rolex an upper echelon watch brand, and they likely have the strongest value retention in the industry. Higher end brands, like Breguet and VC have mostly bad value retention.

Upper end being one that trade in the $20k+ PREOWNED. Everyone here knows Rolex is king of value retention when compared to MSRP, followed by AP and PP, but those anomalies aside, let's talk about the rest of the industry in general. Yes, the high horology set take a huge hit walking out of an AD. But, wouldn't you agree, talking preowned, something like a $20k JLC duometre is going to be holding reasonably? Or even something like Lange? Again, talking getting in at preowned and measuring what expected cost of ownership is going to be. I think it flattens out proportionately higher than pieces at lower price points.

And I could be wrong, I'm only basing this on anecdotal evidence, following some of the higher end pieces (and not what I would call trendy) I like not really dropping over the several years, yet seeing some lower end pieces I've purchased new and pre-owned dropping significantly.

*this is the type of sh*t that distracts me in traffic.

[_speedmaster_]

Originally Posted by systematic.entropy

Upper end being one that trade in the $20k+ PREOWNED. Everyone here knows Rolex is king of value retention when compared to MSRP, followed by AP and PP, but those anomalies aside, let's talk about the rest of the industry in general. Yes, the high horology set take a huge hit walking out of an AD. But, wouldn't you agree, talking preowned, something like a $20k JLC duometre is going to be holding reasonably? Or even something like Lange? Again, talking getting in at preowned and measuring what expected cost of ownership is going to be. I think it flattens out proportionately higher than pieces at lower price points.

And I could be wrong, I'm only basing this on anecdotal evidence, following some of the higher end pieces (and not what I would call trendy) I like not really dropping over the several years, yet seeing some lower end pieces I've purchased new and pre-owned dropping significantly.

*this is the type of sh*t that distracts me in traffic.

I'm sorry, I just don't agree. A pre-owned Speedy holds value very well. So do lower end pre-owned JLC pieces, like the Master Control line. Pre-owned IWC Portuguese holds its value well. Meanwhile, you can get creamed buying certain pre-owned Blancpain models, Moser or even Journe. Certain Grand Seiko models will not lose value.

My point is, certain specific models, across a variety of price points, are highly liquid and will hold value well. I don't think that there is a higher tendency for upper echelon watches to hold value better than others.

Agree to disagree though.

[AK797]

You are certainly not the first to bring this idea up, in fact 1 in 2 threads on this forum now are pretty much on money and value retention and making a fast buck, and everyone knows which watches do what.

[zengineer]

A $3500 new grey market Speedmaster Pro will hover over $3000 unless it's beat up. It's about buying right in any price range.

[toxicavenger]

Poor buying decisions? Sounds like you are into this hobby as an investment. This is not why I am into watches.

[startrolexendrolex]

Rolex ss sports, ap ss RO, pp sports, fpj CB, omega moon watch. In a nut shell.

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[janice&fred]

i am guessing the OP is speaking about buying new then value retention down the line. that is a crap shoot no matter the brand but as some mentioned a handful of brands do better than others.

the smart money will ALWAYS be on buying pre-owned in most cases and no matter if lower or high end stuff. a $500 new steinhart can be had for $250 used, worn for a few years and resold pretty much for the $250. a used tag aquaracer can be picked up for $450 to $600 and surely hold it's value. up the ante to a pre-owned omega seamaster bond style for $1000 to $1200 and it will be fine at that price in a few years too.

higher end stuff the same applies. however if one must have whatever the internet dictates is trending like late model silly nick-named rolexes like bluesy, batman, hulk, kermit or any number of other watches that are artificially inflated by the monkey-see monkey-do tendency of this hobby then it's at one's own risk.

smart money is buying pre-owned, and buying what you like and not what's "hot" according to social media. we laugh at the group shots of some "collectors" as well as viewing them in person as it seems since the internet was created most everyone's "personal" collection starts to look the same.

[Andad]

If you want to stay in the Rolex game right now.

Stay out if it.

[tjs00]

Originally Posted by brandrea

Buying Rolex SS professional references at MRSP is about as good a value as there is. Certainly not higher up the food chain.

And we all know this is just now... who knows in 5 - 10 years from now what the market will dictate.

[tjs00]

Originally Posted by zengineer

A $3500 new grey market Speedmaster Pro will hover over $3000 unless it's beat up. It's about buying right in any price range.

That is a rare case since the style never changes. Otherwise, folks can tell the model year and discount appropriately for age and wear.

[Tony64]

Originally Posted by systematic.entropy

Why has nobody explicitly come out and acknowledged that the best hope of sustaining in this hobby is to spend big money. Talking pre-owned numbers here. I mean, sub $5,000, typically, you have nearly zero value retention. Whereas, when you get into the $20,000+ value retention is a huge qualifier. A $5k Breitling will go for $1500 in a few years. A $25k AP... will probably still be in the $20s. Of course there are exceptions. But, it seems like the only way to really stay in the game, or at least minimize loss, is in the upper tier.

I often wonder why, so much of the collecting community seems to promote and embrace simply poor buying decisions. I know there are many reasons to collect, and for some, it is just aesthetics. But even still. I see so many collections and discussions that are basically throwing away money (and by extension, your ability to stay in the hobby).

Does anyone else agree?

I get your point, but in your example above you'd have lost $5000 on the AP but only $3500 on the Breitling...

It's not just about percentages when it comes to investment or value - absolute dollars matter. If it's enjoyment you're after then price and value retention become less relevant imo.

[DCheeta]

Originally Posted by toxicavenger

Poor buying decisions? Sounds like you are into this hobby as an investment. This is not why I am into watches.

Bingo. That’s exactly where I stand. I won’t pontificate on that any further.