Horological Meandering

Larry Seiden
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Value, price, limited editions, and collectors' mentality

Thomas, like many participants on this forum, you and I have had this discussion on and off since the last century!

While we can all agree that “market price” is solely determined by an agreement between buyer and seller, as a Watch Aficionado (thank you Marc F. for that term), it is essential to my ability to collect timepieces that I know both the value and the market price of a watch. However, more and more I find that value is another word for “taste,” “buzz,” or “hard-to-find.”

While there are some collectors who never sell a piece simply because they have either the resources or the desire to bequeath their collections to heirs or a museum or possibly, they find true happiness in surrounding themselves with 5, 500, or 5000 watches. I would never put myself in a position to judge anyone’s choices.

For myself, who has limited resources, yet still fortunate and blessed to afford a few luxuries, I find that my collection consists of a “core” collection of about a dozen to 15 timepieces that I’m acquired over the years that I love and I wear, although some more frequently than others. And my collection is based solely on what I love. It is not brand- or complication- focused, although certainly I am partial to IWCs.

Then within my collection, there is a second layer of watches, sort of like the Rings of Saturn, that circle my core collection, some pieces going, some coming. It is from this circle that pieces either pass the test of attraction and value to become part of the core or they get passed on to other collectors (with the hope of breaking even at best).

This is where value and market prices come sharply into focus – not only for me but also for most collectors I know. I don’t believe anyone feels good about losing 70% of their purchase price (whatever the collectible item) when they decide to sell something. This holds true for most “boy toys.” Except for automobiles, they seem to track against my theory, since they’re marketed so well, that they are considered a necessity. When was the last time you approached a friend and said, give me $50,000 and in three years, I’ll give your back $25,000. I doubt many friends would agree to that logic.

What I’m finding distressing (and has put me on this soapbox) is the increasing number of limited editions that are hitting the market. I believe this phenomenon started with the firearm manufacturers and now every collectible field has them. What may have started innocently enough when a watch manufacturer either produced what they felt was the most they could sell, or the number signified something or they felt they were creating something special (of value), whatever, collectors started gobbling them up.

While I salute those manufacturers who had the integrity to destroy the mold (Patek) or create a special piece with a limited market (Omega Skeleton Speedmaster, AP EOT), however, now it seems to have gone haywire. Everyone is marketing Limited or Special Editions. Sometimes all that means is change in a dial color. And we collectors go gaga over them. So you can’t blame the manufacturers. We get on waiting lists, put down large deposits and we often end up paying the full list price for the pieces. Much to the joy of the manufacturers and the retailers. Sometimes these pieces do increase in market price, sometimes not.

Going back to my theory of value equals taste (buzz and exclusivity). Take the AP End of Days. An early limited edition, whose size and color while perfect for the early 21st Century, contemporary time, these watches languished below retail, when introduced in the late 90s. The same can be said for the IWC 1993 Jubilee Portugueser. Both watches are now considered by most to be “grails.” Their market priced only soared when we the collectors, could not get our hands on them and decided their large size fit our collections and taste. In each case, the manufacturer produced just enough pieces to create more demand than supply. Whether that was intentional or not, it is hard to say, but I’ll bet if they could turn back time they’d make 2x or 3x because they are in the business of selling watches.

While originally, limited editions were made to honor an occasion or a moment in time, either for the manufacturer, one of their best clients (Schwarzenegger, Stallone) or their best houses (retailers like Wempe, Tourneau and Sincere, etc.) However, In the past 2 years, as manufacturers have become distributors as well as retailers, they have created more and more limited editions to sell either at their boutiques or through their best houses. More and more of these are often cosmetic changes, but by virtue of their exclusivity and pre-marketing, are often purchased by us at full retail.

Then the question of value equals taste really comes into play. Often it is not about value, but following the stock market, and being about P/E, not of Price/Earnings, but of Price/Exclusivity! Of course those who are shut out of the original offerings (IPO) pursue their quest on the secondary market where there are those who are more than happy to make a profit (please, there is nothing wrong with that).

However, here is my point – while value comes from the heart, most of us living every waking moment in our heads, which translates to dollars and cents (or substitute your own local currency). Most collectors I talk to will say, that at the moment they make a purchase, they are already calculating in their head, “what can I sell this for?”

That is not to say that if you’ve been searching for a stainless steel Lange 1 (or a1957 Les Paul with Humbucking pickups) and you decide to pass on it because the price was not to your liking does mean you don’t have a feel for value (assuming you could afford the item). Is the first thought in your head “if everything went south in my life and I faced a dire personal financial crisis would I be able to get most or all of my money out of this item?” or does your heart say, “no matter what the cost I must have this?”

The intrinsic value of a collectible. What a concept! For reference, there is an auction on an Internet site for the window perch that supposedly Lee Harvey Oswald stood at when he supposedly shot John F. Kennedy. Starting bid: $100,000.

Thank you,

Larry SeidenFebruary 2007