Comments:
Regarding the cost of manufacturing the watch, that MSRP takes into consideration manufacture costs + research and development + facility costs + overhead, etc. I bet Patek spent more than 300k researching and developing the parts and movement for that watch, so while the manufacture cost is not 300k, Patek needs to make that money back and fund other projects.
Putting aside the cost of the watch, this is a relatively affordable minute repeater from one of the finest watch manufactures. You can probably recover most of the cost if you want to sell it or trade up.
Something to also consider are service costs. Similar to higher end sports cars, the purchase price may only be the beginning of ownership.
If you can get the watch at MSRP - 10%, that seems like a rather good deal. Especially considering what you need to purchase in order for your application to be approved.
I agree....
Take a step back and consider it.....
From experience, see and examine the watch very well so it is exactly what you desire....
Sometimes a Grail, is simply not a Grail....
Good luck...
Cheers
issue is what the market will bear and it appears that market may be softening considering the current market.
One additional thought, aside from the initial cost, future maintenance, and insurance, is the cost of ownership while in your possession. Weighing the personal reward of having it (whether worn or sitting in a collection) vs. the monetary gain had you invested the money. My father demonstrated this point when he told me he paid $30,000 for a painting in the '60's and then ran the numbers had he invested the money. The true cost of the painting was a staggering number considering the almost fifty years of growth. But he loved it at the time and had to have it. He roughly figured that it cost him about $ X each time he looked at the painting. How much will it cost you each time you look at the watch or push the slide to hear the chimes? Run the numbers based on conservative figures over a thirty to forty year period. Then see if it's worth it to own.
That's a view that most of us (on the forum) don't care to hear or necessarily consider given that we enjoy very expensive toys whose ownership cannot be rationally explained.
I have a 3970 which took some time to accumulate the funds and have owned it for about 23 years. It represents something to me, a point in my life that I don't want to forget. I have a 5015 which marked the sale of a PP cushion shape MR which represented the most important PP I had the opportunity be a part of. So for me, these represent milestones of my life that I never want to forget but want to be reminded of every time I look at them regardless of the cost.
Now the fact that you don't much care for the PP offerings and you think you love a few. At these prices, I would make sure there is no question about it.
Is there hype, you better believe it and I'm sure the margins are significant for PP to devote so much effort. Thirty years ago, MR's were rarely encountered and given the low production, is an indication of demand. When the hype slows, I would think the demand would as well, and possibly as the prices of pieces in the marketplace.
an advice......
You have been after the 5711 for some time and you seem to be also seduced by the 5170....
I made a mistake once buying a watch that was generally great and quite interesting but, at the end
of the day, not the watch for me for several reasons...
( model & reasons are are irrelevant to this thread and differ for everyone)
You are thinking of the 5711 but you have only tried it once....
I think that you should see it again several times (since you sold six watches for it) and
examine it closely to make certain that t is the watch for you....
Maybe yo should wait longer and get the 5170....
I am saying this in good faith Dje, and at the end of the day I am someone that you have never met
so you can always dismiss this comment.... But the wise choice, involving such funds, always comes after
reflexion and re-examination
Cheers
I agree that this is a great thread, that is applicable to almost any watch purchase, relative to the purchasers economic status and liabilities. The amount of money that the purchaser intends to spend will not cripple their current lifestyle or prohibit him from satisfying his current non discretionary responsibilities.
No one is really denying that the use of this money could be used for better investment purposes, say investing in a high dividend yield stock. This is a purely emotional purchase that signifies accomplishment and attaining numerous goals. This is a lot of money but at the same time life is short and i am a firm believer that one should enjoy their riches while he is able. If we wait too long, we may never be able to enjoyment these numerous horological accomplishents and functions. We can't take that money with us so as long as our loved ones are well taken care of, then I would reward myself whether we are talking about a Pulsar or Patek Philippe.
A lot of discretion
She is not that amused by the idea but she has enough faith in me that I will be there to provide whatever is necessary for our family, as I have always done. I am fortunate to have a lot of discretion in these kinds of things. Truth is that this purchase would not impact our lifestyle in any way, it is mainly a psychological decision based on whether 'cash is king' trumps 'love for some special luxury'.
Another angle...
I struggle a lot with granting myself "permission" to spend crazy money on watches. I too am very fortunate to be financially able to do it and still meet my commitments to my family, but I still question whether it's "right". It really is a somewhat embarassing luxury from a purely practical standpoint. My wife and I started with literally nothing and made a lot of sacrifices to get where we are, so this kind of consumption isn't in my DNA. However, I have always appreciated quality, craftsmanship and beauty and when I caught the watch bug I fell hard!
As much as I truly enjoy them and have no investment aspiration at all attached to my collection, it does help me feel better about moving forward buying a watch if I believe I am getting a good deal and that I will be able to recover a good percentage of the funds if I sell.
A couple things that haven't been mentioned yet:
- Will you be comfortable wearing a watch that costs this much? I have seen some people get a "grail" watch only to be paralyzed into not wearing it for fear of damaging it or having it stolen.
- For a complete financial analysis you have to consider maintenance and other holding costs as you own it. Insuring a piece like that will be expensive and sending minute repeaters in for maintenance is probably a five-figure hit every 5 years or so.
Great discussion, guys!
Steve
Grail Paralysis
Good points - I did consider insurance and maintenance, those unfortunately are just part of my reality already although they would escalate dramatically in this case.
A much more real issue is the fear of wearing the watch, not so much for fear of theft as insurance is there for that, but fear of damage. That is actually one of the reasons I like the 5078P - the platinum case is better for refinishing and daily use compared to gold. So my hope would be to not worry about the hairlines and natural patina that will occur because of the ability to refinish quite easily.
I've been a victim of grail paralysis in the past so this is a very real possibility.
A much more real issue is the fear of wearing the watch, not so much for fear of theft as insurance is there for that, but fear of damage. That is actually one of the reasons I like the 5078P - the platinum case is better for refinishing and daily use compared to gold. So my hope would be to not worry about the hairlines and natural patina that will occur because of the ability to refinish quite easily.
I've been a victim of grail paralysis in the past so this is a very real possibility.
Manufacture costs
Regarding the cost of manufacturing the watch, that MSRP takes into consideration manufacture costs + research and development + facility costs + overhead, etc. I bet Patek spent more than 300k researching and developing the parts and movement for that watch, so while the manufacture cost is not 300k, Patek needs to make that money back and fund other projects.
Putting aside the cost of the watch, this is a relatively affordable minute repeater from one of the finest watch manufactures. You can probably recover most of the cost if you want to sell it or trade up.
Something to also consider are service costs. Similar to higher end sports cars, the purchase price may only be the beginning of ownership.
If you can get the watch at MSRP - 10%, that seems like a rather good deal. Especially considering what you need to purchase in order for your application to be approved.
So why does MR from other firms cost 1/3 of PP
All true and well known, manufacturer has to amortize their R&D costs and all the rest. However, so do other firms. It still begs the question of what the true additional costs are that PP incurs to make their MR vs JLC, VC, etc to make it that much more costly ..
I'd love to be a fly on the wall
when Patek Philippe has a discussion on how they will price their pieces. I am sure one of the considerations for Patek pricing is the robust demand for the Patek MR's ( many more people have the money and want to buy a Patek MR than they produce yearly ) hence the waiting list , long wait time, and exclusive application process.
I have noted this sort of business model in other businesses- like Ferrari sports cars, Harley Davidson ( I guess before they became public and could ratchet up production ) and even high end amateur telescopes where there are multi year waits and mystique about the brand.
Interesting thread............
With many different response's being generated.
Unfortunately I have the same mindset as Bruno & mjn, and echo their sentiments, but I can also see the otherside of the discussion.
Having read your various replies, the vibes that I am getting from you. Is that though you "Day Dream" about owning a MR, the cold reality of the cost and the ownership etc is causing you many concerns.
I believe that perhaps a few steps back and some time to consider how you feel would be on the cards. Perhaps give yourself 3-6 months and then see how you feel.
Very sound advice.....
I agree....
Take a step back and consider it.....
From experience, see and examine the watch very well so it is exactly what you desire....
Sometimes a Grail, is simply not a Grail....
Good luck...
Cheers
Day dreaming indeed
You are right - this is probably fantasy land in my mind. I guess if I could truly afford a watch of this level I would not be sweating the details to such a degree and if I truly loved it I would just get it. So this is probably a sign for me to chill out and keep working, perhaps find something at a more comfortable psychological point in the meantime.
Considering the amount of money involved....
it is perfectly responsible and reasonable to contemplate if this watch is for you and how much you want it. I do not know if you can "truly afford a watch of this level" but assuming you can, you should be sweating the decision. Is it reasonable? No. Will a $10 Casio be more accurate? Yup. You can love something and still agonize the purchase. Ultimately, it is your preference and emotions that come into play. Good luck with your decision!!
What the cost of manufacture is immaterial. The
issue is what the market will bear and it appears that market may be softening considering the current market.
One additional thought, aside from the initial cost, future maintenance, and insurance, is the cost of ownership while in your possession. Weighing the personal reward of having it (whether worn or sitting in a collection) vs. the monetary gain had you invested the money. My father demonstrated this point when he told me he paid $30,000 for a painting in the '60's and then ran the numbers had he invested the money. The true cost of the painting was a staggering number considering the almost fifty years of growth. But he loved it at the time and had to have it. He roughly figured that it cost him about $ X each time he looked at the painting. How much will it cost you each time you look at the watch or push the slide to hear the chimes? Run the numbers based on conservative figures over a thirty to forty year period. Then see if it's worth it to own.
That's a view that most of us (on the forum) don't care to hear or necessarily consider given that we enjoy very expensive toys whose ownership cannot be rationally explained.
I have a 3970 which took some time to accumulate the funds and have owned it for about 23 years. It represents something to me, a point in my life that I don't want to forget. I have a 5015 which marked the sale of a PP cushion shape MR which represented the most important PP I had the opportunity be a part of. So for me, these represent milestones of my life that I never want to forget but want to be reminded of every time I look at them regardless of the cost.
Now the fact that you don't much care for the PP offerings and you think you love a few. At these prices, I would make sure there is no question about it.
Is there hype, you better believe it and I'm sure the margins are significant for PP to devote so much effort. Thirty years ago, MR's were rarely encountered and given the low production, is an indication of demand. When the hype slows, I would think the demand would as well, and possibly as the prices of pieces in the marketplace.
Quite interesting thread!
Hi,
I too find this thread to be quite interesting. I was a bit worried first as we don't discuss value here, as per forum rules, but the way it has been proposed and answered is IMHO quite acceptable.
I understand your question as I have to admit I'm asking myself the same question at the time being, at a different level, but with the same logic.
I'm married and make a living for two children that I want to see follow long studies later. I have a mortgage but no other debts. I have a decent job but nothing extraordinary. My job is definitely unsecure but I trust my capacity to find a new one if necessary (even if possibly less well paid).
I've always bought watches when I had money available and no other urgent need to answer. Furthermore the watches I've bought so far where always of unsignificant value compared to my mortgage.
As of today after selling 6 watches in 2010 I could (financially speaking) enter a Patek Philippe salon and buy a Nautilus 5711/1A (well let's say I could go up to a 5146G, but not a 5170J yet). I could probably sell a few more watches (that I would probably regret) and have the required money for a 5170. I've never bought a PP before but I have a good relationship with PP so I suppose they would sell one to me (let's suppose so, that's not the question).
Would I do it? Would I buy a 5170? I don't think so. That would represent too much money for me.
Would I do it for a 5711? That's my current problem. If there's one current PP watch to buy that's the one. The only real PP competition as of today would be more a PP minute repeater pocket watch, but it is not as simple as buying (and selling) a 5711. If I buy a 5711 today I think I take little risk of loosing any money. I think I'd really wear it easily in my kind of life.
So my real problem is to know if I'd need this money for something else in a short or medium term. If yes it would be irresponsible to buy, if not, why not buy it?
I don't have the answer for myself!
Cheers
Dje
I too find this thread to be quite interesting. I was a bit worried first as we don't discuss value here, as per forum rules, but the way it has been proposed and answered is IMHO quite acceptable.
I understand your question as I have to admit I'm asking myself the same question at the time being, at a different level, but with the same logic.
I'm married and make a living for two children that I want to see follow long studies later. I have a mortgage but no other debts. I have a decent job but nothing extraordinary. My job is definitely unsecure but I trust my capacity to find a new one if necessary (even if possibly less well paid).
I've always bought watches when I had money available and no other urgent need to answer. Furthermore the watches I've bought so far where always of unsignificant value compared to my mortgage.
As of today after selling 6 watches in 2010 I could (financially speaking) enter a Patek Philippe salon and buy a Nautilus 5711/1A (well let's say I could go up to a 5146G, but not a 5170J yet). I could probably sell a few more watches (that I would probably regret) and have the required money for a 5170. I've never bought a PP before but I have a good relationship with PP so I suppose they would sell one to me (let's suppose so, that's not the question).
Would I do it? Would I buy a 5170? I don't think so. That would represent too much money for me.
Would I do it for a 5711? That's my current problem. If there's one current PP watch to buy that's the one. The only real PP competition as of today would be more a PP minute repeater pocket watch, but it is not as simple as buying (and selling) a 5711. If I buy a 5711 today I think I take little risk of loosing any money. I think I'd really wear it easily in my kind of life.
So my real problem is to know if I'd need this money for something else in a short or medium term. If yes it would be irresponsible to buy, if not, why not buy it?
I don't have the answer for myself!
Cheers
Dje
If you permit me......
an advice......
You have been after the 5711 for some time and you seem to be also seduced by the 5170....
I made a mistake once buying a watch that was generally great and quite interesting but, at the end
of the day, not the watch for me for several reasons...
( model & reasons are are irrelevant to this thread and differ for everyone)
You are thinking of the 5711 but you have only tried it once....
I think that you should see it again several times (since you sold six watches for it) and
examine it closely to make certain that t is the watch for you....
Maybe yo should wait longer and get the 5170....
I am saying this in good faith Dje, and at the end of the day I am someone that you have never met
so you can always dismiss this comment.... But the wise choice, involving such funds, always comes after
reflexion and re-examination
Cheers
Human conscience
I agree that this is a great thread, that is applicable to almost any watch purchase, relative to the purchasers economic status and liabilities. The amount of money that the purchaser intends to spend will not cripple their current lifestyle or prohibit him from satisfying his current non discretionary responsibilities.
No one is really denying that the use of this money could be used for better investment purposes, say investing in a high dividend yield stock. This is a purely emotional purchase that signifies accomplishment and attaining numerous goals. This is a lot of money but at the same time life is short and i am a firm believer that one should enjoy their riches while he is able. If we wait too long, we may never be able to enjoyment these numerous horological accomplishents and functions. We can't take that money with us so as long as our loved ones are well taken care of, then I would reward myself whether we are talking about a Pulsar or Patek Philippe.
That is why I got myself this
Off topic but on your subject of 'rewarding oneself', upon a nice return from one of my private equity investments I splurged on this toy.
No issues
Got it sorted out a few months ago with that recall .. been all good. But it does make you really wonder about 'value' of these timepieces: Patek 5004 or 458?!
hmmm probably 5004.
The reason I say this is because I live in NYC and where could I really drive the 458? Not to mention parking the car and fears of dings/dents/reckless people. At least with the 5004 I can tuck it under my shirt cuff while on the subway or taxi. I never realized how low a Ferrari is until going on a driving tour and the owner had to slow his Enzo down for EVERY bump, in hopes of not scratching the undercarriage. even at the end of the drive, you could see stone chips and signs of wear. I assume the nature and "consequences" of driving any car on a non-track surface!
looking back
Looking back, now at 60, I see that money is far better to be invested for the future and then reap the benefits of wise investments later in life. The "opportunity cost" of luxury goods bought early in life is very substantial and can really deplete one's future nest egg. When the cost drops to 1 or 2 percent of net assets and you are debt free, opportunity cost is not as damaging. (and you can more rationalize, you cannot take it with you)
I hear you - I'm passing on this watch
Especially at this level of expense there is a big opportunity cost involved.
I've decided to hold off and look into a more modest timepiece, just feel like it would be too stressful to have a single luxury item that is so expensive. I'm not there yet, maybe in a few years or to mark a bigger milestone in the future.
thanks for all the great commentary, it led to much soul searching.
I've decided to hold off and look into a more modest timepiece, just feel like it would be too stressful to have a single luxury item that is so expensive. I'm not there yet, maybe in a few years or to mark a bigger milestone in the future.
thanks for all the great commentary, it led to much soul searching.
Patek + Ferrari
Shortly after purchasing my Patek, I attended a Ferrari owners event. A good friend gave me the "job" of being his navigator in exchange for a ride in his Enzo. Patek + Enzo=Probably one of my most exciting car rides ever. Felt like a roller coaster ride on the road!
my uncle had a similar problem
He has always been a patek fan, and he only wanted a minute repeater from them, nothing more nothing less..
He came close to buying one about 4 years ago, but he decided to use that money to start building a house for his son instead.
This year for his 64th birthday he got himself the minute repeater, and only after he was 100% sure that he would not have needed to spend that money on his children (paying for tuition, houses, weddings, etc..) , sure it did take him 30 years to finally buy it, but he enjoys every second wearing it while hes with his family. Atleast thats what he told me
Although we all love watches I believe that family should always come first and you should not risk it for the sake of buying a watch. After all Patek has survived all these years, and i dont think in 10, 20, or even 100 years theyll ever go out of business. What im trying to say is that you can get it when ever you want, even today. But you should think, can i really afford to keep that amount of money away from my family? Its all up to you, if you do decide on buying it, id love to see some pictures
sincerely
Marwan Al Rasheed
He came close to buying one about 4 years ago, but he decided to use that money to start building a house for his son instead.
This year for his 64th birthday he got himself the minute repeater, and only after he was 100% sure that he would not have needed to spend that money on his children (paying for tuition, houses, weddings, etc..) , sure it did take him 30 years to finally buy it, but he enjoys every second wearing it while hes with his family. Atleast thats what he told me
Although we all love watches I believe that family should always come first and you should not risk it for the sake of buying a watch. After all Patek has survived all these years, and i dont think in 10, 20, or even 100 years theyll ever go out of business. What im trying to say is that you can get it when ever you want, even today. But you should think, can i really afford to keep that amount of money away from my family? Its all up to you, if you do decide on buying it, id love to see some pictures
sincerely
Marwan Al Rasheed