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Rolex Geneva Auction - my personal take

 
 By: Baron - Mr Red : May 13th, 2014-12:42
Well, it was certainly an experience. I was in Zurich on Sunday but travelled over to Geneva on Monday to see the auction. I was also tempted to pitch a few sneaky bids in for some watches....but alas, no Rolexes came my way. The room was full and there was a real buzz to the auction. 
Now, I will stress that the following comments are just my personal opinion....I will understand completely if others disagree with my take on the situation.....but this is how the day came across to me.

First things first....yes, I saw plenty of well-known dealers in the room. Dealers from across the world. The phone booths were fully stacked and there was consistent interest from the Far East, but it would be wrong to say that this auction was totally dominated by the Far East...I think it certainly made itself felt though. 

In terms of watches, it seems that a few themes stick out. Auctions typically play out between Rolex and Patek. Yes, I know that other makes are on offer, but the two heavyweights slugging it out are usually Rolex and Patek, and this auction was no different. However, where perhaps recent years have seen Paek come out clearly on top, this auction was dominated by Rolex. 

Within Rolex, a number of themes also played out. First, the big crowns were a big disappointment. The 5510 and 6538 on show just didn't manage to hit the spot. Having said that, I will make one key observation and that is all versions of big crowns on offer were, at best, below average in terms of their quality. I think this is an issue that cannot be underplayed. 

While big crowns were a relative flop, Comex, Paul Newmans, Daytonas generally, and Oman variants on the Daytona, 1665 special issue was a hit....ranging from strong hits to stratospheric hits.. Where a watch was in poor condition, however, it typically flopped. There was strength across the board, however, on these broad themes, and where a particular example of one of these was in extremely fine condition, then the prices achieved were stratospheric. The 6264 PN which, to be fair, is probably the best example around of this rare PN variant went so far through what I considered the top of the range that it disappeared into the sky. The superb 6542 that was with tropical dial, well yes, that went ballistic. The Comex, across the board, saw strong demand across a wide range of interests and saw very strong price increases. My snapshot is simple....for rare Rolexes that were in superb condition, then prices go so far through what is considered to be a high price that it almost looks like it is "fixed. Truth of the matter is that I don't think it is fixed. Was the 6542 "fixed"? Absolutely not.... What about the 16660 Comex? How many of them with full set box and papers....not many...under 10. Nope....that stunning Daytona with Oman dial....EUR 400k hammer....no, these are real prices paid by collectors who want something special. They want "best of breed" and they want that in references that are already rare. Rare watches that were in "so-so" condition, on the other hand just wouldn't see the interest in anywhere near the same way. 

Explorers? Well.....like my post said a week or so ago.....nobody really cares at auction. 1019 Milgauss.....these are rare watches but not so rare that they are impossible to find. If I wanted a 1019, I could find one by the end of tomorrow...and have a choice of what I wanted. If i wanted a straight hand Explorer 2....then yes, I could have a choice by tomorrow. Now, if i wanted a 4-line small crown Sub....now that would be harder and quality would be difficult to gauge. So yes, such a watch would get a much bigger premium at auction. Find me a superb Daytona with an even and beautiful tropical sundials....yep, thats getting much harder so yes, a bigger premium at auction. Find me an Iceman moon phase by tomorrow in perfect condition....yep, now people are laughing. Why do these auctions always result in some seemingly absurd prices? I think the answer is simple. Of the 400+ Lots on offer, there was probably 40-50 watches that were not only rare, but had aspects to them that made them even rarer AND their condition was superb. For the Collector, it might take him 5 years to get the opportunity to find a similar example ... so the premium reflects that (admittedly very wealthy) collectors view that he doesn't want to wait. The thing about very wealthy collectors is that typically, patience is not one the evident personality traits. 

Where does it leave vintage Rolex now? Lets put it this way, those that think prices have gone crazy and that there will be a pull-back as the bubble bursts....well, I think those that say that will not be the collectors who have in their collection what they want...LoL. In the absence of some kind of global economic problem, I can't see such a correction happening soon. Indeed, with QE money printing still very much in train and with that prospect potentially about to start in Europe, I suspect that we will continue to see certain segments of the vintage Rolex market going from stratospheric to even more stratospheric. 

I will say one thing that I did find surprising....the "Killy" that flopped a bit....I can't give an explanation for that. 

It was a great day out for me... and a welcome break from business in Zurich. Some astonishing watches and some astonishing prices.  To those that bought such astonishing watches, I tip my hat to you and make just one wish....that you enjoy them for the astonishing watches that they are....and not because they represent investment grade assets. 
This message has been edited by Baron on 2014-05-13 12:54:15 This message has been edited by Baron on 2014-05-13 13:33:23

Excellent analysis, Joe.

 
 By: amanico : May 13th, 2014-12:53

And somehow good news for me, as I am happy to see that the watches I am hunting, especially the Milgauss 1019, didn't leave the train station, yet...

So, I will be able to take it!  smile

For the rest, well, the stars, the Daytonas, the SD Comex or not, well, it will be harder, not to say impossible, but I am not a big fan of Daytonas, so, well, not really a pain for me, and yes, I would like to grab a DRSD MK II, but if it had leftb the train station is a fast way, well, I will do without.

That is the thing, the most important thing of that auction, of those recent past auctions: People is willing to pay top dollars, nobody can say they are wrong, can dispute them the right to do so.

Love doesn't need a good reason to behave so.

Yes, that is the good thing for me.

May they all enjoy their new treasures!

Best,

Nicolas

Spot on

 
 By: Le Monde Edmond : May 13th, 2014-13:08
Joe-

Your analysis was EXACTLY the way I saw it. BC disappointed because the quality was weak.
Your right, collectors paid top dollar (or CHF) for top quality and rarity. And your damn right about all the top
dealers in the world being present. They were all there. 

As to the market forecast: once again I have to agree with you. I see it the same way. Collectors will continue to pay
top dollar for the super rare stuff and high quality. The market might correct and mediocre stuff will suffer but
collectors are far from done building their trophy collections.

I would just add one thing to your analysis. I think Rolex did not only do well because the  auction was Rolex heavy.
I really see a trend emerging where Rolex is really the new king of the hill. Have you noticed how many Rolex watches
fell within their estimate? Very few. Most exceeded it by far. And Patek almost always fell within their estimate, often the low one.
I think Rolex is at a sweet point right now concerning their vintage models. Never before have so many different generations
been interested in Rolex.

The only downside I see for Rolex is that the supply remains honest. I foresee a potential problem there if the demand keeps so strong.
We will hear more cases such as the Rock Star and super dealer on the west coast. That does worry me.

Hope you enjoyed my beautiful city  (zurich) and that your business meetings went well.

best Edmond

One observation...

 
 By: Baron - Mr Red : May 13th, 2014-13:27
.....look at PuristS forums...Rolex vrs Patek

The Rolex forum is full of many vintage enthusiasts.

The Patek forum is dominated by mainly owners of relatively modern watches. 


Two different universes. Now, I think it would be a mistake to think that Rolex has a richer vintage history than Patek. They are both very full with stunning vintage history and vintage examples. But I think it is certainly the case that, at this point in time, the vintage Rolex collector is more overt than his vintage Patek counterpart. That can easily change too.

You may be right that Rolex is the new vintage king.... but I would say that such a call is possibly premature. Either way....its dominated by two players...still. 

One small reserve, though... Put the right vintage Pateks...

 
 By: amanico : May 13th, 2014-13:34

And you will see how they will score...

A very nice Patek Chrono sector dial, stainless steel case will go over the sky. A very nice 3417, too, as well as the top of the top, the WT ( which still has the record of the highest bid, if I am not wrong ).

At this auction, the vintage PP stuff was not first class... So, it is difficult to compare.

Best,

Nicolas.

agree....

 
 By: Baron - Mr Red : May 13th, 2014-13:39
.....the right vintage Patek will always fly. 

As the right vintage Rolex...

 
 By: amanico : May 13th, 2014-13:44

The interesrt of these discussions is that it is not a matter of rarity, not only, it is a good lesson for those who think that rarity makes all... For the Watch collectors, and for the brands with their supposed limited editions.

The condition, the complete package, the charm does all! The rarity is one factor, not the only one.

Take a vintage JLC DSA Europe... It has been years ( 3 years, to say all ) that I didn't see one for sale.

Less than 200 were made. And much less surviving to the outrages of Time... If rarity did all, it shoud go for 500 K euros.

It is far from being the case...

wink

Best,

Nicolas

Rarity

 
 By: Le Monde Edmond : May 13th, 2014-14:00
for sure does not make everything. I too really never cared for rarity alone.
It is the complete package for sure. And your example of the European DSA is a good example.
I too of rarely seen one up for sale lately.

Thankfully I care more for the American version with the charming lettering on the dial wink
They come up more often!
best Edmond

the uber-law of economics rules: Supply (rarity) vs. Demand

 
 By: RDL : May 16th, 2014-08:21

Of course rarity (i.e. supply, or 'short supply') is not alone what counts: it's the basic law of economics defining price that counts: DEMAND vs. supply (rarity). A watch can be ultra-rare, if nobody wants it, no demand, low price. Actually, I think that if watches are too rare, it's not good - because there is not enough written about them, not enough 'noise'/hype, and prices are low. You need a certain critical mass to get a hype and interest going. And then you need the demand side, demand higher than supply. It's the differential between the two that matters. If there are only 5 watches of one kind, but only 5 collectors want that watch, price is low. But if there are 5000 or even 10000 watches of one kind, but 10x so many collectors want it (see Daytona), price goes through the roof - although the watch is much less rare. Demand and condition are much more important than rarity, IMO.

That's why I think Rolex is doing so well - there are enough watches around for enough collectors to own them and talk about them in forums etc. That sparks interest of new collectors and you get a virtuous cycle. And then, one you have many interested, you get the special kick that out of the many, there is - by definition - only 1 in the world that is the one in best condition of all in the world, and prices go stratospheric. Rolex is hitting the sweet spot of enough critical mass, enough history, great quality.

i've spent 25 years ....

 
 By: Baron - Mr Red : May 16th, 2014-08:31
....as a professional economist, and that is the first time i have ever heard someone elaborate a "critical mass" idea.

I like it. 

I am also an economist...maybe

 
 By: RDL : May 16th, 2014-08:34
that's why I look at it that way.

uh oh.....

 
 By: Baron - Mr Red : May 16th, 2014-08:37
.....you know what they say about how no two economists can never agree.....

I disagree with that saying...

 
 By: RDL : May 16th, 2014-08:41
because I genuinely agree for example with all you have said when you started this thread: your observations are spot on in terms of Rolex vs. Patek...IMO that is. I also agree that your new white gold Patek is absolutely stunning, same as the 3483. I love the three hand, time only, Calatrava-like, pure watches from the 60s. So...another agreement.

LoL....

 
 By: Baron - Mr Red : May 16th, 2014-08:47
...maybe its just US GDP where economists always disagree!

Yep, those last two Patek purchases for me provided something quite different and actually special. A very different animal to Rolex. 

One thing I will add to your comment on critical mass.....that is that demand is not a fixed feature. Sometimes demand grows only after some seasoning of after a sudden awakening. There have, basically, been the same number of Daytona PNs in existence for the last 30 or more years. Supply has been static. The number of examples in great condition has been similarly static. What has varied has been the demand....that has surged not because of an available critical mass, but rather because the watch has become more desirable with time. Now, why has that happened in the last 2-3 years, rather than say 10-15 years ago? For the first 10-15 years of the PN existence, nobody really cared. It needed a spark of something. I suspect that my little rarity+history+condition formula also requires some modification...a Factor X variable too. 

J

of course, that's why vintage watches ..

 
 By: RDL : May 16th, 2014-08:54
..same as vintage cars, some parts of arts, etc. are attractive investments! Because exactly as you point out: demand is fixed! if at all, it goes gradually down with each watch stolen, destroyed, lost over time. BUT: demand goes up with globalisation and China coming on line PLUS (IMO the most important factor) the Internet. A Rolex PN would not be so famous without the Internet, and collectors 'hyping' about it. For me, globalisation + QEII (free capital) + Internet are the factor x that trigger the jump not only in vintage watches, but also vintage cars and art in the last 3-5 years. But Internet, basically is the ultimate accelerator of 'word of mouth', that's needed to jump-start demand.

The Italians

 
 By: Spellbound : May 17th, 2014-07:02
Didn't the Italian collectors have something to do with the sudden popularity ? (I read this somewhere)

Dean

Italians have style. They always loved mechanical watches ....

 
 By: amanico : May 17th, 2014-07:07

And they were resisting against the Quartz Invasion.

Well, Italians among others.

Rolex, Patek, Omega, JLC, AP, they did a lot for mechanical watches.

I would not say this is because of them, nor that it is a sudden popularity, either.

Best,

Nicolas

italians

 
 By: Baron - Mr Red : May 17th, 2014-07:47

Are behind most good things.

+1... My wife is watching me answering. :))) [nt]

 
 By: amanico : May 17th, 2014-08:35
No message body

thanks !! nt

 
 By: marcello pisani : May 17th, 2014-09:44
nt

Very valid points

 
 By: Le Monde Edmond : May 16th, 2014-12:23
I agree with you. It is the demand supply differential which has the entire collectible universe on steroids (generously helped by world central banks).
And you also make valid point if something is too rare it can work against it. However I would also say that internet is making 'rarity' more transparent.
Therefore we are becoming better educated about what is available, what was made, even if it is hyper rare. And then rarity carries a premium.
Case in point the Daytona reference which Parmigiani bought for nearly CHF 1m at Christies.

It is also why the hyper rare vintage Ferrari of which perhaps only 1 or 2 were made fetch tremendous premiums.
We are better informed and educated today on what is rare. 

Btw for an economist you explain things very clearly and logically! 
Best Edmond

Disagree respectfully!

 
 By: Le Monde Edmond : May 13th, 2014-13:58
There were plenty of the right vintage Pateks.
Look at the two 2499 on sale? I am sorry but the 2499 is arguably the most important chronograph on this planet.
Forget the other references from Patek. They struggled to sell.

There was a fine (I regret not buying it) Patek 1463 with Tiffany signature that struggled to sell. It went for a bargain.

No my friends. The market has changed. We are witnessing an important moment in time.
Were one 'baton' gets passed to the other. 

Patek will always be a force. It will be the manufacture that will always be held in the upmost regard.

But right now another brand with a rich history is getting its turn in the limelight.

Right or wrong. This is the way is is.

E

Disagree on the 2499 as being the most important Chrono on the planet.

 
 By: amanico : May 13th, 2014-14:09

Some Longines 13 ZN are for me most important, horologically speaking. As well as some Minervas.

What is Inside a Patek 2499?

But a few Chronos only can beat the purity of a 130 Sector Dial.

Or the Vacheron siblings from the same era...

I still think that there is a life outside Vintage Rolex, but it is true that I am not a vintage Rolex collector, nor a Patek one, either...

Best,

Nicolas

2499

 
 By: Le Monde Edmond : May 13th, 2014-14:18
Ok perhaps it was an exaggeration. Perhaps I should have stated ' the 2499 is perhaps the most sought after chronographs in the world'.
Because sought after and important are not the same. There you make a right distinction.
But you cannot argue that the 2499 is not critically important to Patek itself. And that was my point in my post.
You said there were arguably not the right Patek there. I don't agree with you. There were and my point is that
two 2499 were present.

As far as horologically speaking yes perhaps 13ZN Longines and the Omega Speedmaster 321 calibre (and others)
are equally important. That discussion is another topic all together.

best Edmond
ps: I might understand you not being a vintage Patek collector but that you don't describe yourself as a vintage Rolex
collector with all those GMT's is interesting. Maybe we both differ on what the term 'collector' means or should mean wink

Collector

 
 By: Le Monde Edmond : May 13th, 2014-14:31
Nicolas- I think I understand what you mean.
Your a collector of brands in general and don't differentiate between old and new?
So your a Rolex collector in general because you love the brand and not only vintage.

If yes- I fully understand your point. I have a weakness with the old right now 
and have my 'vintage hat' on which blinds me to more modern timepieces.

Perhaps its part of the evolution one makes as a collector in general.
Best E

No, no I am absolutely not a Vintage Rolex Collector.

 
 By: amanico : May 13th, 2014-22:27

For example, I love the Rolex Tru Beat. Who gives a sxxt to this reference?

Other examples: I am not so madly in love with the vintage Dayto that I never wanted to pay the price for it.

I don't go for the most popular references: The Dayto, I am very happy with my Zenith 16520 which I love a lot.

5512 / 13 Gilt? They are superb watches, but I never understood why they scored much over a 5508 or 6536.

Big Crown? I much prefer the Tudor 7924, over the 6538 or 5510. With one exception, though... I would sacrifice my 7924 for a 6200.  wink

I love Explorers, and GMTs. These are not the most sought after in the vintage Rolex collection, and I am very happy with that.

No, I am defintely not a vintage Rolex collector. Nor a modern one, as my favourite are the Milgauss GV and the Yachtmaster.  smile

Best,

Nicolas

My view

 
 By: Le Monde Edmond : May 14th, 2014-13:52
Nicolas- I don't quite follow your logic. I think you are a Rolex collector. A vintage Rolex collector at that.
I just think that you don't follow the crowd so to speak. That is what makes you charming in my view and makes you
interesting and why you have a strong following. You turn left when other turn right. My mother does the same.
You go your own way which is good.

As to your comments: The 5512 /13 gilt is never held in more regards to the small crowns 5508 / 6536-1.
The small crowns are in another league in my opinion. One of the best small crowns I have ever seen
(this was a 10/10 in my view) just got sold at christies for CHF 87'ooo. It was stunning!

Anyway stay your course - I think its super. I learn everything day from you and I thank you for that.

best Edmond

Two counter example: 5513 / 5517, and the 5513 3 / 6 / 9

 
 By: amanico : May 18th, 2014-23:48

You will never see, at least as far as I know, a Sub small crown doing better than these 5513...

Even the average good 5508 or 6536 will never score a 5512 Gilt underline or 4 lines.

While, in my book, these Sub small crown are more valuable.

You see...

wink

Best,

Nicolas

Not true Nicolas

 
 By: Le Monde Edmond : May 19th, 2014-06:52
Your comparing apples to oranges. Thats like me saying a 275 GTB is more valuable than a 250 SWB.
If you take the racing version 275 GTBC that won its class in Le Mans ofcourse it is more expensive. But on average
(and that is the key here - ON AVERAGE) a 275 GTB is less valuable than the 250 SWB.

The same is true of the 5508 / 6536-1.
These small crowns (I will also include the 6204 there) in perfect condition are always more valuable than the 5513 / 5512 in perfect condition.
A case in point - look at the 4L 6536-1 that sold at Christies. Now show me a 4L 5512 that is worth $90'ooo.
There simply is not one. I own a 5512 and several small crowns so I know the prices. Ofcourse military watches are always
(or most of the time) worth more than the civilian models so 5513/5517 does not count my friend wink

My experience is that small crowns are not in the same league as 5512 / 13 as least from a financial point of view.
I also think they are not in the same league in terms of historical importance as it relates to Rolex. But thats my personal view.

Best Edmond

Let's say that I didn't see a 6536 4 lines in my life.

 
 By: amanico : May 19th, 2014-06:55

And that I never saw a 4 lines 5508 reaching even  half of this price...

wink

Best,

Nicolas

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