February 2015

As of this writing today I have officially confirmed with Patek Philippe that prices in the US have been decreased 7% across the board effective immediately. Also, to note prices in Hong Kong were reduced by 7% as well and Asia Pacific by 3%. The only increase was in the Euro Zone where prices increased 7%. This news comes on the backdrop in January of the Swiss Franc rise against the Euro thereby causing a large price differential between Europe and the rest of the world. Unfortunately this signals something much greater than just the first drop in prices by Patek Philippe in the last 50 years but rather the overall perception that will now be derived from collectors and dealers worldwide about the brand and its ability to maintain its status as the most elite watch company in the world. As I stated back in my November 2014 update ( worth a read again if you have not read it) that new production Patek Philippe timepieces were under pressure due to the glut ( Sound familiar aka oil) of modern watches on the global market and that a 2015 price reduction seemed plausible. Its nice to be right but I wish I wasn't .
Patek has now put themselves in a very precarious position by reducing prices here in the US ,Hong Kong and Asia Pacific. Personally, it would have been wiser on Patek Philippe's part to have increased prices in the Euro Zone by 10-14% than raising prices there and lowering prices here. From a business standpoint I am afraid that Patek Philippe erred greatly in this decision as the message it sends to collectors and dealers is that watches are not a stable asset . It's the equivalent of Patek raising or lowering prices every time the currencies around the world moved and we all know this is not possible in the global economy today. As I stated earlier my gravest concern is the effect this type of decision making will have on the long term value of Patek Philippe's name and hierarchy in the watch world.

So what happens next is anyone's guess but my thoughts are that new production models will continue to remain soft at best for the remainder of 2015 as the lowering of prices will not get rid of the glut of new watches that Patek is producing. They have a large machine with the new factory and they must feed this machine and lowering production is out of the question even though it would be in the long term best interest of the company and its loyal base of customers. So for now they will continue to roll out 30% more watches than the market can absorb and create downward pressure on new watches coming into the market. I have been asked how this will affect the high end complications and the new 175th anniversary watches and to my knowledge all of these models are priced in Swiss Francs so they will not incur any price change. In regard to the new anniversary models it would be my advise if you are interested in owning one or more then wait a few months from now and these will be plentiful and prices will be much less than today. Patek is producing 1300 Ref 5575G World Time models and that's a huge number of pieces for something limited edition so no need to rush and get caught up with an overpriced watch that you can buy later for less. Also, Patek is producing 1300 pieces of the Ref 5975 Chronograph in 4 metals with 400 in rose, yellow and white gold and 100 pieces in platinum.
Ironically , this model is basically the same vintage styled case as the Ref 5170 which was deemed by the collector world as unpopular but now that Patek has put another dial and self winding movement into the case the collectors are jumping all over it. I wonder is it because its a new dial, self winding movement or just buying the hype of the 175th anniversary. I will leave this for you to judge.

In closing my reason for writing these updates is to make sure you have the facts you need in order to make an astute decision about buying a collectible timepiece and unfortunately sometimes the news we get is not always music to our ears . This price decrease has certainly set off the chimes here in the US and Hong Kong and I'm sure before the week is over Thierry Stern and Patek Philippe will get their fair share of calls and emails . But, the good news is that owning a great Patek Philippe timepiece is something that regardless of the price and whether or not it increases in value is secondary to the pure pleasure we all obtain from having it on our wrist . All of us of who love watches have one thing in common that can never be cured and that once you fall in love with watches you can never go back to the days without .Once a lover of watches always a lover!

As always I look forward to hearing from you the in days ahead.


Your partner in TIME,


Trent

November 2014

Another year has almost come and gone without a watch market update and I must confess I have waited too long to write as many things have transpired in the last 11 months since I last wrote this update. I wish I had a good excuse but unfortunately I don't other than its been a very busy year for me personally and professionally. Hopefully in the next few paragraphs I can shed some light on things of importance to the global watch community .

When I last wrote in Jan 2014 it was my impression the New Year would be a mirror year of 2013 in terms of collecting watches and quite frankly everything in terms of hard assets but I was wrong. I totally under estimated the global conditions that were continuing to put pressure on the watch market . I did state that new modern production timepieces by all the major watch houses were under pricing pressure based on falling currencies and this has not only continued but has gotten worse since late spring and early summer 2014. The US dollar has continued to increase in value against most other major currencies thereby forcing more new product from Patek Philippe and other brands to land here in the US where our consumption has not been able to keep up with supply. Thereby, causing a glut of new watches hitting the market causing authorized dealers to offer bigger and bigger discounts in order to move the watches. At this time of writing rumors are floating around that Patek Philippe is considering price reductions for 2015.
I would not be surprised if this occurs based on current conditions .

Most dealers started the year very optimistic and most have stayed that way regardless of the conditions but those that know me understand I am very pragmatic and while I believe in staying positive we all must remain realistic at the same time to have a balanced approach to our lives . This type of approach guides me each day and has served me well these last 34 years of being a watch dealer. With each passing month the market has become tighter in terms of value and margins have grown very thin both in new and discountinued models so its certainly a great time to be a buyer as you can make very good deals at this time. Unfortunately there are many dealers holding large inventories of overpriced watches and its only a matter of time before the dam breaks and they are forced to sell at lower levels. Where the market goes from here is anyone's guess as there are so many variables today that can indirectly influence pricing and values. The best thing we all can do as dealers and collectors is to stay focused on the passion of watches and enjoy these little machines on our wrist's that we call watches!

Now, on to the market at hand . Everyone has been excited since Basel 2014 regarding the latest releases by Patek Philippe and celebration of their 175th anniversary. Wish I could say the event was as big as it was in 1989 at the 150th anniversary but it has not been close. In 1989 when Patek celebrated its 150th anniversary it was a special time in the watch collectible market and everyone in the world was fascinated by Patek Philippe and everything they were doing especially in terms of new complications. They celebrated by introducing their very first production minute repeaters by introducing the Ref 3979 and Ref 3974. The 3979 model is a simple minute repeater with white enamel dial while the 3974 is a perpetual calendar minute repeater automatic movement timepiece. Also, they introduced the Jump hour Ref 3969 which was an instant hit among collectors and they rounded off the celebration with the officers campaign model Ref 3960. Needless to say when Patek introduced these exciting new models in celebration of their 150th anniversary the world took notice and prices took off . Most of these watches traded in the collectors market from day one at double retail and even higher.
These times reflected a moment when watches began to see a huge uptick in value and became true collectibles while Patek Philippe led the way as the world's most elite brand.
Unfortunately, this year has not been the same in terms of excitement about the new anniversary models and if you go online and view their newest models you will see why.
While a few of the new pieces are interesting in terms of styling nothing really exudes the passion you would expect from the world's finest maker. Maybe the changing of the guard at Patek has not been as successful as they wished. Yes, they are a worldwide brand with hundreds of millions in sales each year but something at the helm of Patek Philippe has changed and not necessarily for the best. If we look at recent auction results its the vintage and discontinued models these remain the apple of the collectors eyes today and in my opinion will be for years to come.

The biggest and brightest star of the fall auction season in Geneva was the selling of the Henry Graves super grand complication pocket watch which fetched 24M US and eclipsed its previous record of 11M so there is no doubt that watches of the greatest complications are in fact a good investment over a period of time. If you were present at the auctions by Antiquorum, Christie's or Sotheby's you in fact noticed an overall general softness in prices for newer production models while the finest exampled vintage models such as the 3448, 3450, 1518, 2499, 5016's all produced excellent results and continue to lead the market in terms of appreciation. Most dealers and collectors alike agree that a long term investment in any of these models will produce a higher value down the road. Basically, you could buy a 3939G black dial minute repeater which is extremely rare and wear it sparingly over the next 10-20 years and come away with a nice return on your investment plus how does one guage the return on enjoyment you get during this same period. Some values can not be attached to a financial return and owning a great Patek Philippe timepiece is one of those things.
Quite frankly for those with assets that can be disbursed toward owning a great Patek Philippe collection I can't think of another single thing in the world today that offers a better opportunity when it comes to return on investment and enjoyment. In fact I pity those with the assets to enjoy these complicated timepieces but never put their foot in the water. All in all the auctions went well but left many questioning where the market goes from here.

Here's where I see the market going for the remainder of 2014 and 2015. From my vantage point it appears that modern production timepieces by Patek Philippe and all other major watch brands will remain under pressure and offer great buying opportunity to those with cash who can take advantage of the over supply of new product. Basically, it will continue to be a buyers market for all newer production models with the glut of new watches hitting the US shores at unprecedented levels . In regard to the older vintage and discontinued models this is where the action will be for the next year as we have many clients calling and emailing us about vintage models so the shift has already begun in a major way. As I have stated many times before people want what they cannot get and this will continue to drive the vintage market especially.
If you own a large collection of modern Patek Philippe timepieces now would be the time to consider trading some of these for vintage models that will offer safe haven and higher values in the years ahead.

In closing I am reminded of something that keeps all of us together over the years for better or worse and that's our love and passion for collecting watches and realizing that while we all would love to see our watches worth more money down the road we still believe that our next catch will be the best ever! That's what keeps us in the hunt.


Lastly and even more importantly I would like to say " thank you" to my friends and colleagues around the world for your support and partnership with Astorlive and myself over the last 17 years.


As always I look forward to hearing from you in the days ahead .


Your friend and partner in TIME,


Trent 

January 1, 2013

It's hard to believe that as I sit to write my newest market update that another year is gone and we are ringing in yet another  New Year....2013 is finally here with all it's hope and aspirations ....I believe this time of year offers each of us a moment to pause and reflect about not only where we've been in the last 12 months but even more important where we're headed....I am very fortunate to be involved in a business that excites me each day I rise .....Many have said that if you love what you do you will never work a day in your life....I am that guy.....Mostly, it's the opportunity to work with some of the finest people in the world....That's you my trusted partners in TIME who truly are my friends.

Most of all I'd like to pause and say "thank you " for giving AstorLive and myself the opportunity to work with you over these last 14 years....What a journey so far and yet I believe the best is yet to come.
   
Now on to the current state of the watch market.....My last update was written in May 2012 and if you have time its worth another read as much of what I stated then has actually been realized....the market has suffered for the last year due to overpricing by Patek Philippe and even today has yet to recover when it comes to modern production watches.....The demand is just not strong enough to support the retail price increases over the last four years by Patek....Many believe we will see yet another increase in 2013 but this will only hurt the official Patek dealers if they do so.
At this time discounts on modern production pieces such as the Ref 5270, 5960, 5159, 5140 and so on is huge when it comes to new watches....Its certainly a buyers market for new modern Pateks....I believe preowned watches offer a much better opportunity and investment today as this is where the core of the market strength is at this time....You never want to collect Pateks purely as a financial asset because liquidity is not near as good as stock or bonds but more importantly because it's an asset than can be enjoyed on the wrist and not just sitting in a vault for appreciation....Having said this, the current state of the financial markets has made watches, along with real estate and fine art, one of the best places to invest your money .....Even better, watches are still relatively soft because of economic uncertainty in Europe and the US, making it a great time, in my opinion, to invest in  Patek Philippe timepieces.


   
Here are some thoughts on watches to collect in the market today:
 
As you have heard me say for the many years, discontinued Patek Philippe and other high end brands offer the best place to begin as you are not competing with the watch company when it comes to production and everyone knows we all want what we can no longer get...It's just our human nature at work....With this said I believe the vintage models from the 1990's offer some of the best collecting today such as the Ref 3970, 3940, 5050, 5040, 5139, 3939, 3974 ( my personal favorite repeater of all time) and of course the most coveted grand complication of all time "the Patek 5004"....All of these models represent the sweet spot for Patek Philippe as during this decade Patek was at its best in terms of design and ingenuity....For example the 3970 perpetual chronograph was trading around 150k prior to the Euro crisis and has since retreated to the 100-130k range depending on the metal. With yellow gold being the least expensive it's the best value for sure, as this classic metal and it's desireability is on the way back to the top.....Remember 25 years ago yellow gold was king and what goes around in life usually comes back around sooner or later.
Buy any of these discontinued models and in 10-20 years you will look back and be very happy with your decisions.

Bucking the trend of flat to lower prices, vintage models have come up in price significantly in both simple and complicated Pateks....Just look at the recent 4th quarter auction results from Geneva and you see the Ref 2499 timepiece selling for over 3M US.....Personally I think many vintage models such as the Ref 1526, 130,1463, 1518, 2499, 3450, 3448  have all seen significant rises in the last 5 years while modern new production watches have fallen in value....In my eyes nothing can ever compare to the beauty of a great classic vintage timepiece that can be worn and enjoyed as it rises in value .....Patek Philippe says in its advertisements that "You truly never really own a Patek Philippe timepiece but rather you just pass it on to the next generation"....I think this speaks to the very heart of collecting Patek Philippe.....What a great way to enjoy life and the passing of time and all the while knowing it's increasing in value....I don't think we can say this about most things we purchase today.
 
I truly believe that 2013 is going to be a strong year for watches as global markets look to find value in hard assets....Watches have not risen like they will between now and 2020 and now is the time for the collector to begin building a good solid collection for the next generation.
 
Collecting watches is not just about investing in a timepiece that will appreciate in value but rather investing in a timepiece that you will appreciate as it grows in value.
 
As always we look forward to hearing from you in the days ahead.