It shames me, a militant capitalist who regards the Law of Supply and Demand as sacrosanct as the Ten Commandments, to bitch about the elevation of prices based on that rule of commerce. But of late, as with the pricing of hi-fi equipment and certain wines, things are getting out of hand.
To anyone bar a Communist, it’s blindingly obvious that if you have one of something and ten people want it, you have the makings of an auction. Bidding for an item is the most honest and genuine way to determine something’s worth: the value is set not by artifice, hype nor advertising. It is defined by unquenchable desire and the wherewithal to realise its purchase.
Who am I to criticise the benighted soul who pays an extra £5k for a fucked dial? Excuse the use of the vernacular, but that’s all a “tropical” dial is: faded, knackered, despoiled. Call it “proof of provenance” all you like, but you are lying to yourself. This pursuit of the damaged, and then elevating it to a level of desirability, makes the Emperor’s new clothes seem like bespoke Huntsman. Talk about delusional.
Trying to defend the inflation, I firmly believe that supply-and-demand is everything, and yet absolute rarity doesn’t define it as much as one might imagine. If that were the case, the collector of watches with Valjoux 72 movements would pay more for Gallets than for the Rolex Cosmographs, which vastly outnumber them. But because there are exponentially more Rolex collectors than Gallet fanatics, a superlative gold Gallets is worth only 0.3% the price of a typical “Paul Newman”.
It wasn’t always like this, as investor-types are pleased to remind us. Once the values had some basis in reality. In a conversation this week with a hedge fund manager, who knows the watch biz, he and I both agreed that the industry may be sweating it and there is no doubt that new watches are in an oversupply situation, but even he couldn’t believe how vintage watches have produced greater returns than all but the luckiest of social media site sales, fine art or real estate in London or New York. Vintage watches are the new Ferrari GTOs.
Repeating the notorious inflation of Eric Clapton’s Daytona, which went from $50,000 to over $1.1m in little more than a decade, this week’s Phillips/Bacs and Russo Auction Five in Geneva saw an identical multiplication in value. The near-mythical Rolex “Bao Dai” ref. 6062 sold for $235,000 in 2002. 15 years later, the hammer went down at CHF4.3m, or roughly $5m. Now the highest price ever paid for any Rolex, the watch has the same worth as two fully-loaded Bugatti Chirons.
Really? I know which I’d rather have.