Horolonomics

Even if you swore off the news over the holidays, trading in your smartphone for a burner flip phone and cutting off your internet service at the telephone pole, you probably heard about Carlos Ghosn going on the lam.  Ghosn had previously served as the CEO of Renault and Nissan, simultaneously, and he was a giant in the automotive industry.  But he'd recently fallen from grace.  Ghosn was out on a $4.5 million bail having been jailed by Japanese authorities for almost four months as a result of alleged financial crimes.  After his bail was set Gosn was placed under house arrest. But on December 29, 2019, he walked out of his house, took a high speed train, boarded a private airplane, and ended up in Lebanon where he hopes to evade extradition. 

The press is covering this escape in excruciating detail, including a running debate over whether Ghosn hid in an oversized case for musical equipment in order to evade customs and security checkpoints.  Media have also noted that there i…

In 2002 Switzerland became a full member of the United Nations.  It is perhaps surprising that it took six decades from the founding of the UN for Switzerland to join.  But Swiss adherence to political neutrality is now more than two centuries old, a doctrine which is no doubt difficult to follow amidst the coalition-building and lobbying that takes place in the UN.  The track record of avoiding international conflict for more than a century, though, is a testament to Swiss dedication to neutrality.

Apparently, for some in the watch industry, avoidance of conflict ends at the border.  Also in 2002, Nicolas Hayek, the then-CEO of the Swatch Group, announced that his company would no longer supply mechanical movements to other manufacturers.
Nicolas Hayek For years the Swatch subsidiary ETA  - Manufacture Horlogère Suisse had supplied its movements to a wide array of other watch brands.  From a business perspective this product line made little sense, Swatch was essentially enabling oth…

Word is beginning to spread that buyers of certain luxury steel sports watches have unwittingly entered into a sacred pact with certain brands.  The pact is this: if you are eventually selected off an unimaginably long wait list you may buy a watch that isn't supplied in great enough numbers.  But you may not sell it.  If you do, you will be prohibited from buying that brand again.  The brand will drop the ban hammer.

In an article published Nov 24, 2019 in GQ an anonymous author states that after having quickly sold his Patek Philippe Aquanaut 5167 for a tidy profit, "Patek Philippe knows that it is not [his] anymore. They found out and [he is] not sure how.  [His] name could be potentially circulated among other Patek ADs, [he is] told. The AD (who [he] had a great relationship with) will no longer offer [him] 'hard to buy watches'."

And from Watchpro we have: "people that do manage to buy an investment-grade watch and flip it for a profit are being hunted …

A short post about an emergent service from brands: the certified preowned vintage watch.  In a prior article I discussed the plan by Audemar Piguet to purchase preowned watches, refurbish and refresh them, and sell them through their chain of boutiques.  When I wrote my prior article the idea was basically "blue sky" in the watch industry and I shared some skepticism that it would succeed.

Well, we now have another data point to consider.  Vacheron Constantin has launched a certified preowned service.  They chose to do so in Melbourne, Australia and we can tip our hat to the folks at Time and Tide Watches for their outstanding coverage of the launch.  Vacheron is calling this service "Les Collectionneurs" or "The Collectors" (I think, I don't really speak French), you can see the official descsription here.  And it appears that this first tranche of nine timepieces, refurbished and accompanied by a new two year warranty, has been something of a succe…

Buying a watch is a fairly straightforward process for most people. The goal is usually to find something with an appealing design which tells the time accurately. But the watch industry has a surprising depth and breadth which is worth appreciating and understanding.
It is very easy to inadvertently spend a great deal of money on a product which really isn't worth it compared to similarly priced alternatives. In this article I will describe the fundamental layout of the watch industry and the range of options available to buyers.
Product VersionsAlmost all watches can be placed in one of three categories based upon their source of energy. The largest market segment, by far, is populated by quartz timepieces. Estimates are that production of these watches numbers in the billions. These watches are powered by a small battery (like other consumer electronics) which is periodically replaced when it runs out of power. Some quartz watches feature a rechargeable battery. They can…

The Only Watch auction took place today in Geneva. In this auction manufacturers create unique pieces and auction them for a charity.

 I streamed a live blog of the event as I watched it. I tried to give my impressions of how prices would land prior to bidding and I think I did OK with my predictions. There were some surprises and almost all of them were positive. 1

1. The Patek lot broke the world record for a wristwatch at $31 million. I think this surpassed even the wildest estimate of what would happen
2. Although the Patek will get all the attention the blacked out Tudor actually was a far bigger surprise. The Patek was 10x its estimated high. The Tudor was 63.6x at CHF 350k. This is really important to note.
3. Vacheron and JLC seriously underperformed. If these houses are able to build reputation in line with Patek then whoever won those lots can look forward to some impressive appreciation.

Overall it is fair to say that these were extremely impressive results. I …