Online Markets, Auctions and Auction Houses...

As the holiday season rolls closer, we have the many factors to review. While I have always believed in the "two tier" concept of pricing, we have to examine how the big auction houses play into this concept. As we have seen in the past few weeks, Ebay has been way down. I have already posted some "new lows" which have been pretty fantastic. Yes, we all know the "quality" is not that of a piece with a 400% higher price, but I am sure there are some who can justify paying $25k for a red Sub w/papers...right?
OK...maybe???
In any event, here are some direct dealer to dealer transactions I have witnessed:
1655 w/service papers @ $10k to sell @ $11k
Tudor 2 reg MC @ $9k
Tudor Subs are flowing @ $2300
GMT 1675 @ below $3500
5513 200m @ 3k to sell @ $3500
Now most of this is not so out of pocket, in the real world. The real kicker is going to be watching the big auction next week.
The problem I and many others are having with the big auction houses is the general condition of the movement of these watches which are sold. My last experience was pretty common:
I bought a watch for a client, got it home and it was in dire need of a service. I am not talking a cleaning, but a full service with new parts to replace worn or rusted ones. Not a nice deal considering you pay an extra 20% in "hammer fees" to buy a piece. I am hearing this more and more and the truth of the matter is these auction houses are killing people with watches with AM parts and just plain "bum" movements. How would you like to buy a really nice dial and hands but then have to have your watchmaker take it apart and risk ruining your purchase?
Pretty crappy considering you are payuing top "tier" money. Yeah, there are drinks and red velvet cupcakes but come on, gimme a watch that is mechanically sound for my money!
There NEEDS to be an auction house that sells a watch, not a collection of parts. You see, a watch is running and it tells time. You know, that thing we used before we all had cell phones to give us this information?
In this really trying time for watches and other "luxury goods" it will be interesting to see how the big houses do as pricing begins to slip downward. Tier or no tier, 2009 will be tough for all sellers, Ebay, privates and the big houses. There has to be some level of quality which separates a good buy from a bad one at any level. The answer is to service the watch before putting it up for auction. Sounds easier than it is...or does it?
Hmmmmmmm...

Black Friday on 47th street...

Not much doing. Boring. There are many of the same pieces coming to the booth via different runners, all priced too high. I do think some are beginning to see the correction and making feeble attempts to "reduce" online, but if you check Ebay you will see how low things really are:

Item number: 330287790271 Red Sub with starting bid of $7k, no bidders. But, a Red Sub w/full boat, Item number: 190267224264, sold for over $12k. What does this mean? Let's explore a bit more. A red dial alone, Item number: 250327051787, sold for $1800.00+. Not the best condition but for $1800 it is not too bad. So, what is a red sub really worth? Well, to hear some people say they will pay $20k for a perfect example screams insanity. I think a PERFECT example is still in the $14-16k range. Now I mean unpolished, no issues whatsoever. For now.
My thing about red Subbies is that there are just so many out there. They are really a "commercial" collectible, like a Mickey Mantle autograph. Nice to have but not rare at all. Remember people, not long ago you could buy one for $2-3k. How unrealistic is it that we see those days again?
On another note, I received my monthly "Specht Sheet" and Ken states: "The entire high end watch market is very soft. Early Rolex Daytona Cosmographs have lost, in many cases, $10k in value the past month. Most, if not all, of the collectible vintage Rolex market has been hurt. I can't say if this is temporary, or if we are in for a long decline." Has a nasty ring to it, no? Ken Specht has been in the business longer than many of us. There are just too many sellers, and no buyers. That is the killer. NO BUYERS at any price so those who MUST sell to eat WILL sell at considerable loss. OK, OK, I hear some of you salivating but who really wants to buy a commercial watch which is on the decline? "Oh, it is my grail", so I will buy a red subbie for $7k and watch it go down to 4k in a few months??? I don't know about anyone else but if I buy something I like to maintain it's value. If I bought (and I do have a couple in my new found collection) and the bottom drops I would never be able to LOOK at that crummy worthless watch, let alone wear it!! lol! I already have a damn $24k (my cost) Tudor MC, that some stinking undercoat hawking, air freshener selling pal o' mine told me would hold it's value. Yeah, right.
So don't feel too bad if you bought too high. We all did. Now is the time to get even. I am predicting prices will come all the way down by September 2009. I mean "roll back" to 2002/3 pricing. Big auctions will be where the masses will go to sell their mediocre stuff, and guess what will happen? The market will become even more diluted with crap, separating the real cream but dragging some of the better stuff down, nonetheless. Look at Newmans. There are many "old time newcomers" to the forum markets searching for end users. Big names in the dealer world but here they stand, on the forums trying to find some poor soul to bail out of their overpriced, recently bought "grails". Oh, it will be a corker in Miami in January, if they don't cancel the show for poor turnout. The reality is a pusher newman is really a pretty common watch and will fall like other "commercial" grails. again, it was not long ago these watches were between $20-30k. The Newmans that will hold are the rare references 6240, 6262, and the like. No, they will not be $80k when all the rest are $30k, but I am sure collectors will covet them as they are harder to find...even if they look identical on the wrist. Hmmmmmmmmm...

Happy Thanksgiving!

I would like to take this time to thank all those who participated in our poll.
My next post will be Saturday and I will examine how the current economic climate affects 47th Street on "Black Friday". Our booths will be open and I will be walking the street monitoring the action. I am curious to see whether or not buyers will have the same "to hell with it" attitude as they did in December, 2001 after 9/11. That was one of the busiest Decembers we can remember, at least at # 64-65!!!
We shall see...

The Auctions Have Spoken, But What The Hell Did They Say????

Well, the big auctions went off over the last few days, to alot of "rah-rah" on the forums. I keep hearing "quality rules", "Europeans need someplace to stash money", and the like. Overall, numbers were down, but certainly not out. In fact, lots of really questionable crap was sold for heavy money, IMO. What does mean to the "real buyer" you know, like the one reading this piece?? A gold plastic daytona sold for well over $50k, yet I turned down one at $35k. Steel plastics are fetching $30-40k in "the room", but what dealer will pay $20k, hand to hand?
There is a phenomenon here. A while back I dubbed the term "two tier market". The folks at these auctions are not your average buyer. They are collectors, brokers, speculators, and for the most part not concerned about the economics involved. These auctions are a place for dealers/collectors to "prove" the market still has legs. Now, I am not saying there was not money in the room, but whose money was it? The average collector and dealer these days cannot sell anything at just about any price. Look at the forum markets, which I believe to be a much more accurate picture of what is happening. There are just plain unrealistic prices for average stuff, with phrases like "reduced" all over, and still no action. Granted, the "reductions" are a joke. The prices are so jacked up to begin with that no one in their right mind would pay them. There is a liquid price, but not many are willing to accept it. I am sure, many who are selling paid way more and cannot take a loss. I have posted some "test cases", and not much interest. Does this mean the market is done? Not at all. It just means no one is spending at this time. But hold on here, when will spending re-occur? Remember, the big boom in these watches over the last 4-5 years was "fad like" in some regard for certain buyers. The steel watch became the "new bling" for the hip young urban professional. With many now looking for work that demo is slowing, creating a vaccum where lots of these watches are out there, with no real buyers, except dealers. Dealers like to buy cheap, at least this one does! So what happens?
WHAT HAPPENS???

Quantum of Lower Prices, or "look how cheap you can buy a 5508"

ORIGINAL Rolex James Bond? Submariner 5508 - 1957/58 Ebay item 300270488394

This "collection of parts" sold for just under $7k USD. Hey, I bid $4k or close to it!
Let's break it down for a profit:
movement $1000.00
dial/hands $3000.00
bezel w/insert $1500.00
case w/caseback $2000.00

Hmmmmmm, either someone bought a nice parts lot for under $7k or the whole thing is going in the crapper.

I will say this: The more I look at this "lot" the more I like $4k for it all, and not a penny more.
Wow, I love the smell of Ebay in the morning...smells like victory!

Acceptance of the times...

Well, after much continual bashing by the "non believers", the major forums (VRF, BJSOnline) have finally accepted there is a market slowdown.
The very frightening reality has yet to hit, but is on the horizon. One of the deals I did not post publicly is a gorgeous 6241 3 color black which traded for under $50k at IWJG. Many will not admit that even the Newmans and other exotics are falling but it is a fact, as I witnessed it. Dealer to dealer, perfect piece for
$48k. Now I am sure there were many in the room and maybe even reading this who will offer $55k-60k now. Or will they?
What is happening is opportunity for collectors and opportunity for creative dealers. As a parts person, I always size up a watch according to the sum of it's parts. The dial and case being the prime indicators. Many watches such as ther 1655 or 1665 DRSD will now bring better money in parts. Think about it. What is the liquid price of a 1655? $10-12k? The case alone is a hard thing to find on the open market and will always fetch pretty close to $10k. DRSD is another one. When a friend called and asked my advise on wether to buy a round case back MK IV, no inside serial I quoted $14 on the buy. He did not listen and wound up breaking even at $16. The prices of yesterday are not the prices of today.
On another note, I currently have a piece on memo with a known dealer for WAY over current book. Nice condition 1655 normal dial which I posted $14 + profit.
There are many buyers out there looking to pick up nice examples, but NOT ENOUGH TO SUPPORT THE FORMER PRICE STRUCTURE.
Remember the golden rule:
Rare and desirable will always sell.
With so many of these watches out there rare is a tough one to conquer. Over the last 5 years the vintage buzz has gotten worldwide attention, thus bringing many "safe deposit box" pieces to market. As the demand dries up because of overstock, or just plain lack of interest what happens to these watches that were so sought after? They sit in the showcase of some dealer/professional collector/speculator until he is ready to take a loss.
This is what we will see in the coming months. Dealers will MIGHT have to sell at some point, but the guys who bought in as a fad WILL sell, and at lower prices.

The time to buy is coming. Opportunity is a few months away. Bigger pieces, you know the ones they say will NEVER fall, will come to market soon. The hobby cannot withstand such a multi dimensional freefall.

...and still another. This time a 6262 w/service papers @ $19k

eBay item 220303491381

Where is the bottom?

More cheap plastic Daytonas...

Ebay item 280282638352

At last week's IWJG Show $18k would have bought this fine timepiece, or collection of parts (whichever you choose to describe it as). Now it is $16k.I offered $10k and would still pay $10k, even though the lugs are a little thin!! lol! My crystal ball is telling me to wait before buying ANYTHING. Collectors will have a field day come April, tax time.Pricing has settled in around 2005/6 levels...this week. With every piece like that $13k red subbie w/full boat and the $20k daytonas buyers are pulling back (wisely) and looking for a bottom. We are nowhere near it at this time. Holidays are coming, and with it will come the worst retail season on decades. Not a good time to sell. What I am seeing is alot of sub par stuff bought by speculators and neophytes who now think they can push this stuff off on collectors. The real problem is even the really nice stuff is taking a hit, as there is also alot of it on the open market.

It's a Tuscanyrose halloween!!!

Halloween is always fun at "Planet Tuscanyrose".
This is a shot from James' annual school parade. My wife ditched the Bride of Frankenstein for the "Rock of Love Witch". Speed Racer was played by James, and quite well, I must say. I stayed with my trusty cell phone costume.
Lotta fun, lotta fun.

IWJG Report...

This show had all the makings of a really great show. The Monday before, nth street was full of foreign dealers combing the street, looking for deals. Those I knew were leaving watches for me to flip at prices that were not reflective of their usual market. The show showed great promise but it was not to be. There were all the usual dealers running around looking to outsmart each other and lay off a dog for a grail. It turned out to be like trading seats on the Titanic. Again, no one was even asking prices on anything. I had a 6538 w/refinished dial which I quoted $20 and no takers. The Patek market also seemed slow, again with buyers asking below dealer cost. There were many perfect red subbie sets as well as many other full boat items but all were still waaaaaaay overpriced with dealers holding most of the same inventory from last 2 shows. Plastic Daytona were all over the place. It seemed like all the established dealers had a couple in their showcase. While one high end dealer told me he moved 2 over $30k, I saw many in various condition sitting from $18k and up sitting. I guess those boys should have read "the Buckley Report". Nah, they were all too busy blaming me for the downturn. Now isn't that silly? They should know what that does to my raging ego! I do not control the market, I just report it like it is. I have been telling all who will listen to move on any high priced stuff that was questionable. Some listened, others did not and are now buried. Condition still rules. there was a DRSD w/perfect MK 4 dial, curved case back and no serial which sold for $16k...and the dealer was glad to move it. A Patrizzi w/full boat went for $16k which was absurd, but again condition was perfect. The market is correcting itself and if something is hard to find and in perfect condition w/no issues it will fetch more but all parties are being careful and double checking EVERYTHING.I was offered a 6263 w/Newman dial @ $82k. The dial had the slightest mark near the 6 marker and I believe the guy went home with it. On a good note I bought lots of parts, as I am officially out of the vintage watch business. Back to my bread and butter. There were many overpriced dials but I scored on a 666 matte, Tiffany matte 5513, bronze nipple tiffany GMT qs and a really nice silver Milgauss dial. in addition I traded for 2 big red 6263, black/silver and a couple of "semi patrizzi" 16520 jammies. Oh yeah, I also paid way too much for a 16520 floater in white but that was early in the day and I had to have it.All in all I had a really slow show, watch wise but in terms of parts and selling pure junk, I cannot complain. Many dealers did not even make their expenses.

My final word is this:In 2001/2 I began raising prices on anything vintage with no ceiling. if it did not sell at $300, raise it to $1000. Those who needed the parts would pay. As the vintage buzz began and prices began to soar worldwide many began to comb the globe for these watches as there was big money to be had. When more and more of these pieces hit the market they were gobbled up by dealers, speculators and collectors alike. I remember when a Tiffany Rolex watch was special, as the years went by they are now all over the place. fast forward to 2006/7...lots of easy money available, market blows up with highest prices ever. 2008 rolls around and the market is overloaded with vintage Rolex. The "Revolution" comes and with that "the last hurrah". the problem is there is not way too much inventory out there with too many sellers and NO buyers. Those who have hope this will turn around in a year are non believers. This overstock all over the world will not just go away. Sure, prime examples will be sought after but come on, who in their right mind will pay over $20k for a red sub full boat? IT IS A COMMERCIAL WATCH!!! Nothing sexy or special about it, with so many prime examples out there. Remember people, the box and paperwork cannot be worn.

To all the dealers who approached me and requested that I pipe down on public forums please understand MY position. There was a bomb scare at 27 west 47th on Thursday and while I was in NJ the joke was that the "Anti-Buckley Alliance of Dealers" (ABAD) phoned it in. Sorry fellows, I am at 37 west. lol!

I know many were waiting on me to post this report who do not read my blog daily. I really do not feel sorry for the guys who heard me ranting about the market dropping and refused to believe it out of their own lack of common sense or just plain greed. Gone are the days where you can buy a watch for $5k and nine people will offer you $20k or more. Too many learned about the market and anything with plastic became "collector grade". Now we can get back to finding that perfect, rare piece without the interference of speculators offering far out prices for common watches, just for the sake of profit. The joke at the show was that a lot of dealers became collectors in the last 2 days. Sad but all too true...

Report from Munich...will IWJG be the same?

"Few people there, some known dealers missing...prices seem to be still at the normal level.
Not much sold".

Tuesday is IWJG NYC, usually a big show. We will see...

Greenspan's Credit Tsunami

This was written by a friend and posted with his permission:
We are witnessing a credit tsunami. Tsunamis as we now know come in 2 stages. The (current) disappearance of wealth in the form of debts repudiated, bets welshed on, contracts canceled, and Lehman Brothers-style sob stories played out is like the withdrawal of the sea. The poor curious little monkey-humans stand on the beach transfixed by the strangeness of the event as the water recedes and the sea floor is exposed and all kinds of exotic creatures are seen thrashing in the mud, while the skeletons of historic wrecks are exposed to view, and a great stench of organic decay wafts toward the strand. Then comes the second stage, the tidal wave itself -- which in this case will be horrific monetary inflation -- roaring back over the mud flats toward the land mass, crashing over the beach, and ripping apart all the hotels and houses and infrastructure there while it drowns the poor curious monkey-humans who were too enthralled by the weird spectacle to make for higher ground. The killer tidal wave washes away all the things they have laboured to build for decades, all their poignant little effects and chattels, and the survivors are left keening amidst the wreckage as the sea once again returns to normal in its eternal cradle.
Pretty heavy.

Will today be "Black Friday"...

It is Friday, October 24, 2008. 9am.
I awoke to the news that world financial markets have dropped again overnight. Not so surprising but frightening, nonetheless. While many were watching the stock market fluctuate Thursday, a very important event occurred at my booth in NYC. A known dealer offered me a plastic Daytona for UNDER $20k. I did not buy it.
To all who believe the watch market is impervious to a world financial decline, think again. The writing is on the wall. On a day where shareholders are selling off stocks like Exxon, Home Depot, etc., what makes you think a DRSD or 6263 are immune?
Fasten your seat belts.

Insight into profit margins...

Here is a short post for all those who think we make so much on any given piece. Yesterday a President, 1803 came from another dealer @ $3700.00. Nice watch, a little loose on the bracelet but a factory diamond dial which is rare for that model. What happened? Sold to another dealer for $4k. Monday we took in a 16660 w/matte dial and all service papers. In at $8000.00, out the door @ $8500.00. As nice a piece as I have ever seen but I am told one just as nice w/ORIGINAL papers in California for $10k. We bought a sapphire ladies two tone for $1500.00 w/a decent band which did not sell immediately. Still on the shelf, I am told.
So much for dealers making big profits!!! For us, it is always about volume anyway so these times are not different than any other.
These are very interesting days for dealers and collectors. Next weeks IWJG show in NYC will prove to be quite interesting. I have spoken with established dealers who are telling me they WILL NOT liquidate their overstock of common 6263/5 and the like. They are going to "hold them 'till the next boom"...better call your attorney and write it in your will! lol! Nah, maybe not that bad but the days of $20-30k plastic Daytona are over.
We shall see people, we shall see.
Remember, you heard it here first...back to 2002/3 pricing is coming soon.

Lots of fake Tudor Monte Carlos out there...

The Tudor Monte Carlo is one of the better selling watches in this down market. With a strong hammer price at the Antiquorum auction it is easy to understand why these are one of the mote faked watches out there. One reason these are easily faked is they various Valjoux movements which are readily available in these other brands: Movado, LeCoultre, Heuer, etc. Ever notice all the cases and dials for these watches selling on Ebay? Above are two cases. Can you tell which is the real one and which is counterfeit? Take a good look. Aside from the bottom crown which has rust on it it is pretty easy to spot. Note the finish work on the top example and then on bottom. See what I mean? The problem with these watches is you really do not handle them as they are pretty rare. Many people are fooled by a fake which sometimes has an authentic dial and other components. One foolproof method of checking authenticity on one of these watches is to try and switch a case back from a model with the same reference number. Rolex is exact and precise. Parts are interchangeable. If all else fails, try and use another caseback, crystal or bezel and check the fit. It should fit perfectly. if it does not, you need to investigate further.

Careful people! There are wild things going on in Vietnam and the surrounding area. it is up to you as a buyer to be careful and thorough.

Well, it took some time but...

...the vintage Rolex market is suddenly deflating. the summer of 2008 was the "last stand". Remember 2007? Whatever inventory out there was snapped up by newcomers and seasoned collectors in a flash. Over the winter of 2008 I began to see signs of a market about to fall. Lots of sub-par pieces, too many safe deposit boxes were raided with long time owners looking to cash in on the craze. The Antiquorum Revolution in the spring was one of the most anticipated watch and clock auctions of all time. After records were set with a $500k + "Albino Daytona" the overstock began to take hold. By summer 2008 sales were sluggish and many non believers said it was just the normal summer slow down. Not the case. The current state of the US and subsequent world economy had caused many "common" watches to devalue. Remember, people
In 2002/3 (5 years ago) a plastic Daytona was around $10k. In 2001/2 a perfect bakalite GMT would sell for under $3k. Newmans were in the $20-30k range. The vintage Rolex market soared in a span of 5 years to record highs. It was unstoppable, until now.

Originally posted October 20 2007 at 1:33 PM

The market is beginning to correct itself...

Has anyone noticed the prices for "common variety" vintage Rolex has been going south? There is a documented sale of a P serial daytona on TZ for $14k. The same watch was $18k last week.I believe there will be a 20% decrease across the board in the next few weeks. I am going to see if I am right on Monday when I post some watches for much lower prices. If they sell, I am wrong. If they sit, I am right.
I see big ticket heavy provanance pieces still holding their ground and selling. The gilt market is very strong, as each piece sells on it's own "individual unique quality". DRSD is dead. I predict they will be a 20k watch by Christmas. The floating Cosmograph is another one which is grossly overpriced. With the proper provanance, 20-25k for a full boat is correct. The rest will tumble. Remember folks, the pieces that will withstand this "correction" are the sound solid pieces. Original or service papers will command the real money. Anything without will be left behind.Let's see next week...John