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Showing posts from 2021

New York - GVA: a Special Relationship

The watch industry has seen a fair bit of dynamism in recent years. An ownership share in Breitling has, apparently, changed hands. Richard Mille turned down an offer from Kering and, instead, Mille's children are taking an increasingly prominent role in the business. The publicly listed retailer Watches of Switzerland (WOS) is expanding geographically and diversifying their porfolio to include vintage . One of the more significant developments, though, is definitely the acquisition of the retailer Tiffany's by the luxury group LVMH. This change in corporate ownership, alongside the departure of a prominent salesperson , created some murmurs about whether a longstanding relationship would continue. The temptation to pull Patek Philippe from display cases and replace the crown jewel of Swiss watchmaking with one of LVMH's own brands may prove simply too tempting for Tiffany's new owners. Would Tiffany's and Patek Philippe find a way to continue their relat

Highway to the Jomazone

This post has been subconsciously rattling around in my head since the very early days of Horolonomics. Never leave your wingman. For some reason it coalesced into something a bit more substantive over the past few days. The TLDR on this is that the existence of Veblen effects in the luxury watch market implies there are probably multiple equilibria. The economics of markets with multiple equilibria is quite different than the textbook view of markets. In such markets, expectations and herd behavior are extremely important. These can quite significantly change the price of a product, even if all market fundamentals are stable. Before we explore these results, let's begin with some first principles. Most markets follow the law of demand: as price goes up, the quantity demanded of a product declines. As I've discussed previously , luxury markets are different. They typically "break the law" when it comes to demand: when price increases, people may actuall

Dr. Dietz' Watches

Dr. Robert S. Dietz was "one of the most irritating as well as influential geologists of the 20th century," at least according to a 1998 piece published in The Geological Society of America Memorials . Robert Dietz scuba diving in Japan, 1953. Source: UCSD archives. The same piece notes that, "a mountain in Antarctica, a tablemount on the Pacific Ocean floor, and an asteroid somewhere in orbit between Mars and Jupiter," were all named in his honor. This is the story of a period of time in Dietz' life and the watches he owned during that time. I first encountered Deitz' story when I read a piece by Jose "Perezcope" on the Rolex Deep Sea Special series of watches. The commemorative edition of the Rolex Deep Sea Special. Two examples of this watch are on the auction block this month. They have garnered a fair bit of media coverage. Jose's work is required reading for anyone wishing to learn about the "fog of history"

Auctions: the Flipping Solution

It’s 2021 and the secondary market premium for certain luxury watches continues. There are plenty of Gregory Paus out there, taking a new, highly sought after [insert sports design from century-plus-old Swiss brand] and selling it for well over retail. Highway to the Profit Zone There’s been a collective gasp now that Rolex has found its voice and issued a public statement about the whole matter. That’s how unprecedented the situation is. As an economist, though, the dialogue about flipping is quite reminiscent of two magnets approaching each other with the same poles facing. They get closer and closer and then the forces become too great and the magnets slip away from each other. The discussion over flipping and the secondary market premium is quite similar: we never quite get to the crux of the matter, but we get close. At the end of the day, flipping and above retail pricing on the secondary market are a consequence of many different circumstances. If you leave any o

Toes on the Line

Hello again. It's been two months since my last post but there is an issue and topic I thought I'd comment on. It is an aspect to the watch market that hasn't been adequately discussed, in my opinion. But first, an explanation for my absence from this blog. In my last post I mentioned that I paused writing here due to the fact that I was focussed on two long-term projects. I don't write with a pen but I liked this stock image. One is continuing apace, it is a book on Rolex. I can't remember exactly when I started writing in earnest, I think at the beginning of summer, or perhaps halfway through. I was waiting to get responses to some archival requests and I also had to do some in-depth background research from other archival materials before I could start pecking away on the keyboard. I did start, though, and I crossed 30,000 words not long ago. For professional and experienced writers, that may not seem like much. For me, it is the most I've writt

Hype Journo: the Case of Tag X Mario

I've been on a somewhat extended break from posting here because I'm working on two in-depth projects and some regular contributions to another, awesome, outlet. However, recent coverage of the TAG Heuer x Super Mario Limited Edition smartwatch release this week convinced me I needed to post some thoughts. The TLDR on this is that some folks writing about the watch industry need to be way more careful and precise in their writing. Preliminaries and full disclosure: I was initially excited about this watch but disappointed in its execution. Photo credit Pixabay I grew up playing countless hours of Mario and hoped the watch might be a neat commemoration for me and all the folks who enjoyed this game. However, I'm really not into smartwatches generally (I bought a Pebble years ago and it just wasn't worth the hassle of charging) and 45 mm is pretty big for a timepiece. Also, the price on this watch ($US 2,150 at retail) is just not competitive. If others love

Leeds Beat Weems: the Origins of the Rotating Bezel

I recently realized that my curiosity about watches is similar to the way a T-Rex' vision works, at least according to the 1993 film Jurassic Park . For those who don't remember the film, Dr. Alan Grant (a paleontologist played by the actor Sam Neil) tells the other characters that if they don't move, the T-Rex won't see them. Similarly, I realized that the rotating bezel is such a permanent (but adjustable) fixture of dive watch designs that I've never actually seen much of its history. Subsequent to attending Jeffrey Kingston's Horological Society of New York lecture on the advent of the first dive watch by Blancpain (required WIS viewing, really), I think I'd naturally assumed that the brand's former CEO, Jean-Jacque Fiechter, invented the rotating bezel sometime around 1953. Drawings of rotating bezel from Fiechter's Fifty Fathoms patent. There certainly were many innovations he patented while dreaming up the Fifty Fathoms, so I subcon

The Watch Media Ecosystem: a Two Year Review.

Last week, I finished user onboarding with a service called CrowdTangle , a startup that launched in 2012. In 2016, Facebook acquired CrowdTangle. In 2019, it opened a service for academic researchers. I recently applied to participate and I was accepted. CrowdTangle provides a wide array of analytic data for activity on Facebook and Instagram. I'm only beginning to familiarize myself with it. Out of curiosity, I decided to get my bearings by looking through the platform's data on watch media. The insights I'm posting here are the result. CrowdTangle's engine reports a wide range of information on public posts and accounts, including followers, reactions (likes, etc), shares and commenting. I began by building a list of the major watch media outlets which have been operating for a fair number of years. I requested feedback on Instagram for my initial list and updated it accordingly (thank you to everyone who commented, acknowledgements below). I ended up with a list

The Grey Market Rolex Discount

Today, I happened to notice that Jomashop is selling a large number of Rolex references, many at a discount relative to the official price. My subjective impression is that this does not happen very frequently, so I wanted to more formally tease out some implications of this development. I assembled a spreadsheet of the listings and ran some numbers. For this discussion, I will focus on the references which Jomashop identifies as "Men's" (due to the fact that I am unfamiliar with the other references which are listed). Jomashop lists 197 references for sale at a discount relative to list. This is a remarkable variety of watches on the grey market, expecially considering that Rolex contracts likely penalize ADs who resell through third party dealers. The average discount across these references is 10% with a minimum discount of 1% (mostly 36mm Datejusts in precious metals with unique dials) and a maximum discount of 31% (Cellini Pink Dial Automatic Men's 18kt

Stay Gold

I'll admit it: I had a negative initial reaction to Rolex' recent release of a "Rolesor" Explorer (aka two-tone in steel and gold). I wasn't alone. As I type this, I think to myself "they really ought to change that term. It rhymes with eyesore." A memeified version of Sir Edmund Hilary and Tenzing Norgay On the day of the release, I created a meme which I posted to IG, also offered here. It reflected my assessment at the time, which was that the adventure / mountaineering legacy of the Explorer really does not require precious metals, especially gold. It is soft. Climbing Everest requires hardness, so all we need is 904L steel. Not very sophisticated thinking, I'll admit, but I'm pretty certain that's what the "reptilian complex" portion of my brain was up to. It seems that certain novel watch releases kick off an emotional grief response in the watch community. Photo credit Wikimedia and Bertrand Grondin There a