Help me understand watches and value

Friends,

I'm not a watch wearer. I've generally never enjoyed the feel on my wrist and I have this fairly infallible innate sense of time...

Anyway- I DO appreciate the artistry of a fine watch and want to learn more about them/educate myself.

Now- I understand to a large degree why an Audi is $45,000 and a Maserati is $120,000 etc. Quality of materials, build, what's under the hood, advanced tech, scarcity, intent to keep brand exclusive and many other factors.

Are watches the same? I thought I understood the basic differences between a $100 Skagen and a $3000 Omega. But I don't understand what sets a Panerai or Patek apart for 10x the price of the Omega. In the auto world, there's just about only one production car that is 10x the cost of a Maserati... and they only make a few dozen of that car.

Can those of you aficionados help me to understand how watches are priced and what sets them apart? Or point me to an online source of learning?

Much appreciated.

Have you really thought this through? There is a million dollar car, the McLaren F1, do you think it is worth 10 x Porsche Turbos? The Pagani Zonda, do you think it's worth 40 x Priuses?

In any luxury good there is cheap at $1, decent at $5, well-made at $30 and the very best that money can buy, however illogical, at $300...

Originally Posted by Tarmac

Click to expand...

Have you really thought this through? There is a million dollar car, the McLaren F1, do you think it is worth 10 x Porsche Turbos? The Pagani Zonda, do you think it's worth 40 x Priuses?

In any luxury good there is cheap at $1, decent at $5, well-made at $30 and the very best that money can buy, however illogical, at $300...

I have- are you implying that an $18,000 watch is that price merely because it is? McClaren and Bugatti make a very few cars annually- is that true of the watches too? That Patek makes only, say, 100 of any model?

Originally Posted by Cary Grant

Click to expand...

I have- are you implying that an $18,000 watch is that price merely because it is? McClaren and Bugatti make a very few cars annually- is that true of the watches too? That Patek makes only, say, 100 of any model?

Not exactly, but generally yes. You are on the right track with that line of thinking. The biggest thing with the watch is the complication of the movement. There are many other factors as well. I am no expert but highly suggest you check out timezone.com.

It is a great resource.

You're overthinking this.

The price of goods (at least in our pre-bank nationalisation capitalist heydays) is generally the maximum price a sufficiently large* body of consumers is willing to bear, which may only bear a fairly limited relationship to actual material worth. Luxury goods command their high price tag in large part simply because they're luxury goods.

*the exact number is determined by company's business model and size of the target demographic of course.

Originally Posted by Holdfast

Click to expand...

You're overthinking this.

The price of goods (at least in our pre-bank nationalisation capitalist heydays) is generally the maximum price a sufficiently large* body of consumers is willing to bear, which may only bear a fairly limited relationship to actual material worth. Luxury goods command their high price tag in large part simply because they're luxury goods.

*the exact number is determined by company's business model and size of the target demographic of course.

I'm not trying to overthink. Thanks for your thoughts. Again, I understand the generalities of certain luxury goods and how pricing gets to where it is. And I understand that "what the market will bear" is a large part of it.

What I was wanting to understand, however, and I have failed at explaining this clearly, is: is there a line at which it is merely "brand" and "demand" that allow for those units most astronomically priced? If so- roughly where is that price break? Is The difference between any $10k watch and a $20k mostly predicated on that brand piece of it or, on average, is the works, materials still significantly "better" from $10 to $20k.

Am I making sense?


PS- I'd say part of it lost on me are the vagueries of one set of works over the other. Why Sinn's technology may be superior to Omega's (or not).

I've a lot to learn obviously. While, in the end, I'll only ever appreciate the look, and probably not so much whether or not a watch pioneered the use of argon.

I'll get to know timezone- thanks for the suggestion?

Originally Posted by Cary Grant

Click to expand...

What I was wanting to understand, however, and I have failed at explaining this clearly, is: is there a line at which it is merely "brand" and "demand" that allow for those units most astronomically priced? If so- roughly where is that price break? Is The difference between any $10k watch and a $20k mostly predicated on that brand piece of it or, on average, is the works, materials still significantly "better" from $10 to $20k.


I believe that at about $5,000+ things start to be more about details and complications that most won't appreciate. Under $5,000, most watches are mass produced on a line usually with an ETA movement.

At the $10k+ level you are paying for is the highest level of craftsmanship (I'm talking about brands like Vacheron, Patek, Brequet, etc not Rolex, Panerai, etc.) Fine timepieces are worked on by hand for hours resulting in a finish so perfect that few flaws are seen even with a 10x loupe. These timepieces also have the highest quality components built in-house, guilloche, and have more rigorous testing of the movement.

At around $30,000+ you are paying for a grand complications, jewels or something that is produced in very very small numbers.

Check out reviews like: http://indepth.watchprosite.com/show...ost/ti-394401/
http://indepth.watchprosite.com/?show=nblog.all&fi=652

Yeah, one of the big jumps from the sub $5K watch to those going up into the 10s of thousands is the production of an in house movement. Valjoux 7750 and Lemania 5100 make up the movements in most of my watches (IWC, Sinn, Omega), and these movements can be beautifully hand finished and customized, but the real money is in in-house movements.

Is it worth it? Not for me, but even if I could afford it, I'd drive a BMW over a Zonda (and I'm perfectly happy in a Subaru now). At a certain point, it just seems excessive.

I have a $150 Seiko Monster, and a $3K Breitling. Do I feel the $2800 dollar difference? Check Timezone, you'll see a brands history, pedigree, reputation, production numbers, exclusivity, etc. are all very highly valued, though intangible items. An IWI Marine Diver costs 1/12th of a Panerai, yet is 95% of the watch (IMO). But why is the Panerai better? Because the Italian Navy issued them to divers starting in the 1950's and yada yada....the history has no tangible effect on the piece of metal on your wrist, yet some people rave about it. YMMV. I had a Rolex Sub for a few months. Did I gain 2" in length, or suddenly have supermodels throwing themselves at me? I don't think a Patek would do the trick either, so buy what you like, and only if you feel the price on the tag has at least SOME relation to the actual watch you're holding. In the end, it all boils down to how it looks and wears on your wrist. An in-house movement finished to jewelry standards, impressive heritage, and snobby boutiques in the finest cities won't keep it on your wrist if you aren't enamored with its look

Value is a perception, whether it is a $10 Casio, $100,000 Patek, $199 mall suit or $10,000 Savile Row bespoke.

Twotone

In addition to, even eclipsing the "quality" aspects of very fine watches such as Patek - are the "prestige" & "scarcity" factors. Savvy super high-end houses such as Patek and Hermes understand this very well and work hard to keep their brands out of reach of the great unwashed masses, so that they will always be the desiderata of the well-heeled desiderati.

Originally Posted by robb01

Click to expand...

the type of metal also comes into play

if you really think about it, the type of metal and all other material cost won't amount to much. You could probably buy a solid gold bar at half the price of some watches. Watches appeal to your emotion- they market a certain lifestyle and/or prestige that the buyer finds attractive OR you just happen to like the watch and its brand. You can justify all you want about hand-made parts, in-house calibres, etc... they're just there to give you assurance that the thousands of dollars in price difference between your Seiko and your Patek is worth it. On a personal note, I used to not get it either. For the longest time my watch was a $150 G-Shock. Had a Rolex as a gift that I used only once, then sold it and later bought the cheapest Speedmaster for occasions that makes the G-Shock inappropriate. Then I started reading up about watches, and found certain brands appeal to me- enough for me to also think that spending $5000 and up on watches is perfectly alright.

Well, first of all, most cheap watches ($500 and below) will be quartz. Quartz uses an oscillating crystal to keep time and is powered by a battery, while mechanical watches keep time using a precise mechanical mechanism, and the watch is powered by kinetic energy stored in a spring.

Quartz is more accurate than clockwork, and can be machine manufactured. A $10 quartz digital from Casio will perform the function of telling you what time it is as well as a $50,000 Patek.

In fact, you can put a radio receiver into a cheap quartz watch, and it will get a signal from the atomic clock and sync itself automatically to the official time, and be absolutely spot-on perfect all the time for about $100. By contrast, a mechanical watch that attains a chronometer certification from the Swiss government will be between six seconds fast and four seconds slow within a 24 hour period.

Omega and Rolex comprise the bulk of certfied chronometers, so if you go up the scale in mechanical watches, once more, you're not paying for improvement in the timekeeping function. Many Omegas and Rolexes are within 2 seconds a day, which is as accurate as a mechanical watch can reasonably get.

What is treasured is that a high-end mechanical watch contains a very precise clockwork mechanism inside of it, and, with the most expensive watches, the mechanism will be very carefully finished and decorated by hand and exhibited with a sapphire crystal display back. The most expensive ones are manufactured in small quantities, entirely by hand, and include complications.

One example of a common complicated watch is a perpetual calendar. On a Rolex with a date function, there is a wheel that turns one notch every 24 hours advancing the date. It has 31 spaces on it, so 5 months of the year, Feb, Apr, June, Sept, and Nov., the date will have to be corrected manually because those months do not have 31 days. An annual calendar will keep track of the day, and the month, and will advance the date correctly on months that do not have 31 days. A perpetual calendar keeps track of what year it is, and will track the date correctly on leap years. All this is done using clockwork, and it is insanely complex, requires hundreds of precise parts and is insanely expensive. And on top of that the watch will still lose a couple of seconds a day, so you'll probably want to reset it at least a couple of times a year anyway. The thing exists primarily to be rare and intricate and painstakingly made by a master craftsman.

Probably the best way to think of it is that Seiko is Toyota, Omega is BMW, Rolex is Mercedes Benz, and Patek is Maserati. Omega and Rolex make a lot more watches than the smaller, more exclusive luxury brands, and they have expensive R&D costs that they can distribute over a lot of watches. Rolex rolled out a new specialized, high-performance ceramic for its rotating bezels, developed a new hairspring made out of a high-tech alloy that is more accurate through shocks and changes in position. Omega recently rolled out its coaxial escapement, which allows the watch to run for twice as long as other watches without a service. Rolexes and Omegas are also extremely accurate and precise. However, there are a lot of automated steps in the manufacture of these watches, while every piece of a Patek or a Vacheron Constantin will be made by hand. So the Patek and the Vacheron will be more expensive. Also, there will be more finishing and decoration on the Patek or VC movement, and those watches tend to have crystal casebacks to show off the movement, while Omega and Rolex have steel casebacks.

djf881; very well written!

/M

Thank you all very much- it really is helping to clarify this "mystery" for me.