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Market Timing
James D. Malcolmson
02/02/2004
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Demand is always difficult to predict, especially given the emotional and rather capricious nature of buyers responsible for the current price appreciation. No one in the auction business is willing
to guarantee the continuation of such increases. But many point to the growth in the numbers of collectors as one factor that will keep prices climbing. "A new flow of people is the best thing that can happen to any market," says Aurel Bacs, international cohead of the watch department at Christie’s. "Many people in their middle age who’ve made their money are just discovering that watches can show more than the time. When you carefully select your items, you’re outperforming any other investment instrument, including real estate, stocks and currencies. It’s a dramatic statement, but the watch market is also very dramatic, and very lively."
"Maturity" is a term frequently employed by the auctioneers to describe the current state of the watch market. The implication is that the market has acquired a level of stability in which collectors can take confidence. "In 20 or 30 years’ time, the interest will still be there," suggests Ader "because even though it’s new, it’s very much like the collector car market. The interest is stable. We are very confident in the market over the next few years. Obviously there’s been a tremendous increase in prices—there’s no doubt about that. But we have a very healthy number of clients around the world, and there are always different clients involved when prices reach record levels.
Some collectors, however, aren’t so sanguine. While few will openly call it a bubble, some do point to an increased level of speculation in parts of the collecting community as a sign that passion collecting is not the only factor behind current pricing. Speculation may be a natural phenomenon in any market that has seen increases similar to those in fine wristwatches, but it also calls for vigilance. "There was a serious decline in the price of Patek Philippes in the early part of the ’80s,"offers Shugart, "so everything has its ups and downs."
Resources
Antiquorum Auctioneers
www.antiquorum.com
Sotheby’s
212.606.7000
www.sothebys.com
Christie’s
212.636.2000
www.christies.com
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