How to Tell if a Watch is Undervalued
Most watch collectors are on the hunt for watches that are of extreme value, not many people know about and have the potential to go up in value. Now, you are probably saying to yourself ‘watches are not an investment! This is a pointless article to read’ and the purpose of this is not to say they are. Watches should be purchased for the love of what it is, and not as an investment strategy. In fact, some watches that you love may not even hold their value, but its your love for the watch that matters. However, watches do have the potential to increase in value as more people place higher value in them. So inevitable, collectors will be looking for watches that are undervalued.
In the current watch market, it is very hard to find undervalued watches because everyone has access to so much information about almost every watch. But there may be some hidden gems out there that we are all overlooking.
The way to go about identifying undervalued watches is to look at the reasons why people buy specific watches. The graphic below shows those reasons and display exactly how one can identified undervalued watches.
Foundational Support
As brand awareness has risen to become an extremely important part of current lifestyles, more people are looking to purchase watches from specific brands. The easiest example of this is the desire of many to purchase a Rolex watch. But, brand provenance goes beyond just purchasing a luxury brand. Provenance could also include brand associated to another brand - like Tudor. Tudor watches have risen in perceived value from consumers in the past decade.
Another way to look at provenance is production volumes of watches. If a company does not produce many watches, each watch has increasingly higher value due to the lack of supply. Alternatively, if a company is known for a specific production technique or engineering feat, it can also provide the foundational support of creating an undervalued watch.
Value of the Reference
Once a brand is identified as having a good basis for creating substantial watches, next is to identify a reference that captures watch lovers. The easiest way to do this is to find a watch that looks beautiful - to find a watch that has aesthetic qualities that the masses enjoy. This could be like the Rolex Submariner that, in its simplistic yet functional design has become what represents watches today, or it could be a Patek Philippe perpetual calendar, that has classical design elements that make us reminisce of the past. Whatever it is, people have to like the way it looks.
Next is the horological value and engineering that went into making the reference. A huge amount of value is placed by collectors in watches that are difficult to make and handcrafted by a skilled watchmaker. In-house movements are hugely valued by collectors. Also, doing something to a watch that has never been done before - think of breaking records like the “most accurate”, “thinnest”, “lightest”, “fastest”… if it has never been done before and a watch company makes a breakthrough it creates value.
Lastly, has to do with the rarity of a specific reference. Although the aesthetics and horological significance are important, if the market is flooded with the watch, it is easy to get a hold of the watch making its value a lot lower. But, if the watch was produced in low quantities, there are not many currently available on the market and people love the watch, so many more people will want to get their hands on it!
Value of Specific Watch
Once a reference has been identified, finding the individual watch that is undervalued turns to the path of condition. Condition can describe many things, but namely, is the watch in close to original condition? Many collectors want a watch that is as close to new as possible. But, there are some collectors that like watches to show their age, so some patina could be necessary. The markets for ‘like new’ and ‘vintage’ watches are different in scope and size, so it should be considered when trying to identify undervalued watches.
This graphic is a way to organize and identify if a watch is undervalued. Watches have the potential to increase in value, but really should be purchased simply because you love the watch. If the watch does not make you happy, you may have not purchased it for the right reason.
Enjoy!
