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Originally Posted by NemesisX
Are certain brands of watches really surefire investments as so many on this forum make them out to be? Brands like Rolex (possibly because of mass appeal) or Patek (possibly because of rarity)? If we purchased a ~$100k Patek right now and never wore it, what's a reasonable rate of return over 5 or 10 years? Is this true for all Rolexes and Pateks or do you have to be lucky? As a general rule of thumb, does average rate of return go up proportionally with purchase price?
Anyone have any data on this kind of thing? We don't care about wearing watches, but if they're actually decent investments then we wouldn't be opposed to diversifying a little.
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First, let me be clear. An investment is something you buy that you expect will appreciate in value. Most every watch one can buy -- at least the ones folks on here are mostly discussing -- are all but guaranteed to lose value from the day they are purchased. Period.
Certain brands lose value more slowly than others, Rolex and Patek being the two mainstream ones that lose value slowly. Certain specific watches will also lose value more or less as slowly as Rolex and Patek, but the watches for which that applies are pretty esoteric and rarefied. They also tend to be very expensive, although some of them are only somewhat expensive as are Rolexes and some Pateks.
There is one other "category" of watches that do appreciate in value almost from the day the are purchased. Those watches tend to have something special about them that transcends the intrinsic qualities of the items themselves.
For example a P. Dufour watch could quite likely be purchased today and sold tomorrow at a profit because Mr. Dufour is the person who made it and he makes so very few watches and because he is a great watchmaker. Is he a better watchmaker than the men and women who toil away in Patek's factory or are his watches going to perform better than those, or even better than a typical Grand Seiko? "No" is the answer to both questions, but he's not toiling in Patek's or Seiko's factory; he's doing the work under his own name and his creations are his alone. It's the bespoke aspect of his watches that lends them cache, and cache is good for keeping values escalating.
Another example would be a watch owned by someone noteworthy. The thoroughly run of the mill watch that President Obama was given at the start of his first term, a Jorg Grey, instantly increased in value just because the President of the U.S. owned and wore it. Jorg Grey watches other than that one are just like it and their value's movement is identical to that of a rock thrown in a lake.
Outside of those very limited sorts of watches, all the rest of them are going to lose a lot of value before they have any hope of actually gaining value.
One thing to be cautious about is a false sense of value retention. For example, I have a Patek Philippe Calatrava 3520 I purchased some 25 years ago for about $12K. When PP stopped making them, the last retail price for them was about $25K. That watch can be purchased used today for anywhere between $9K to $12K. I saw one of effectively the same vintage as mine offered for sale at $10K and another for $12.5K. The thing is that my $12K from 25 years ago would buy more than $12K today. So really, my watch still isn't worth as much as I paid for it; it just seems like it is because the numbers in the price tag are the same.
All the best.