This Week In Watches: Auction Edition
Before we get into the auction stuff, don’t miss the latest TickTocking Review video of the A. Lange & Sohne Tourbillon Pour le Merite in Platinum
Too much attention is paid to watch auctions. This is a relatively new phenomenon and should be curbed. We hesitated to acknowledge the auctions at all, given this fact. In fact, we spent nearly a full day writing a long piece that turned out to be total garbage. Writing is rewriting as they say. Instead here’s a brief overview and then some random thoughts with citations. We put the thoughts on the stuff that we actually sell behind the paywall as we do not want to create misunderstandings with casual followers.
Auction houses were particularly well suited to capitalize on the current media environment. Online media is always looking for content and money. Auction houses have only a few sales per year and deal with the most interesting part of the industry: price. They are perfect content. Plus they have huge marketing budgets owing to their ~27% gross margins per sale without even holding inventory. As a comparison, we shoot for an average of 10% margin on inventory that we buy, with all the cash flow requirements and risk that entails. Auction houses have been able to buy prime media coverage and even promotion from brands themselves, while other secondary market sales remain taboo. This has become big business for everyone involved. And with that much $ on the line, you’re sure to get shenanigans.
We do not like buying from auctions. They are often a place for sellers to get rid of watches with issues. We have also had numerous problems with payment, shipping, customs, VAT refunds, etc. For the most part it’s just not worth it. Nor do we use auction pricing as much of a guideline in our value determinations. We know for a fact that brands inject marketing money to either outright buy their watches back or subsidize higher purchase prices. And of course you have the ever present “pissing contests” that lead to stupid prices, or simply the guy who does not realize he has to pay 27% on top. Even wrongly calculating currency exchange can skew prices enough to be unreliable. And in the other direction, the few occassions we’ve gotten good deals at auction are mainly the result of survivorship bias. We won roughly 1% of the auctions we have bid on prior to 2020 and none since. So a low result is also not a clear market signal — just a single data point from a day where no one was paying attention to that lot. So with all that out of the way, here are some random thoughts.
The Holy Grails
Grail is thrown around casually in our world, but in this case we are talking about the true once-in-a-lifetime watches. Recently we had the Kari Voutilainen Tantalor and URWERK 103 Prototype that I would put in this category. For those with the ability, these are the pieces that are literally priceless. In this auction season the two that fit here are both pocket watches — the Dufour Grand Sonnerie and Roger Smith No. 2. At around $1m, the Dufour looks like a great bargain to us. We have no clue what the right price for the Roger Smith is, but if we had the net worth we would simply put in the next bid until it was ours. You can’t lose with stuff like this. What’s the lesson to learn here? We need to make more money.
Journe Madness
The Christies Art of FP Journe sale continued the string of eye-popping numbers for some Journes. When we see watches we struggled to sell for $180k sell for $1.3m a few years later, it is hard to give rational commentary. We can’t say that we understand this market at all anymore. Are they nice watches? Absolutely, of course we are still as big of fans as we were several years ago when we were one of the main hubs for Journe sales in the world. But for this kind of money it just makes no sense. Whoever bought that jade Tourbillon could have bought the Dufour Grand Sonnerie and a damn nice wristwatch to go with it. Sheer madness
Bargain Complications
Christie’s other auction featured some fantastic bargains. We didn’t bid (for the reasons explained above, we rarely bother bidding anymore). The GP Bi-Axial Tourbillon was an absolutely bloodbath of a sale at only 37,800 CHF all-in. Admittedly it’s a bit of an ugly watch, but at that price I’d throw it on a leather strap and wear the hell out of it. The entire GP management team should be fired for cause (And they should hire us. Although we insist on working from home in our pajamas, we would certainly be an improvement).
The Gyro 2 at under $80k is a nice buy for someone. No box or papers and similar to wearing a travel dictionary on the wrist, it’s still a great watch at a can’t lose price.
Similarly this platinum skeleton Vacheron tourbillon at ~$70k is a stunner, as is the perpetually-impossible-to-sell Maserati Millenary AP Tourbillon for under $60k.
It all goes to show that if you trust your own taste, ignore the novelties and the crowds, complications in the $50-80k price range can be the best bang for your buck in the industry. These were all well into 6 figures at one point and now no one pays attention. We’d be very happy to wear any of them (in fact in 2018 we’d happily have taken all 4 in trade for the jade Journe Tourb).
The IP1
We got several emails and texts about the Greubel Forsey Invention Piece 1. We’ve had an IP1 in our personal collection now for 5 years or so and have been pretty vocal about considering it one of the greatest modern watches. This one had no box or papers and potential signs of being opened outside of the factory plus we don’t love owning doubles of things, so we submitted a very lowball bid with no expectation of winning…