New TAG HEUER Ayrton Senna Limited Edition Posted By: Patrick Date: 4/25/05 02:32 GMT

I have a question for anyone that can help.Today I saw at the mall a beautiful Tag Heuer chronograph Ayrton Senna Limited Edition (2004 exactly are made). I am a huge watch enthusiasm

Er, you're either a huge watch enthusiast or you have a huge amount of watch enthusiasm... =) Gotcha!

(particularly of TAG HEUER)but I wonder if one day by purchasing that particular piece I can make money out of it ( in 10, 15 years…).

It depends...

Can you really buy watches as an investment? Thank you in advance

Certainly. You can buy watches as an investment, like all investments they can be good investments, bad investments or indifferent investments.

Patrick

Re: New TAG HEUER Ayrton Senna Limited Edition *LINK*

Posted By: Derek Ziglar (zOwie)

Date: 4/25/05 02:41 GMT

In Response To:New TAG HEUER Ayrton Senna Limited Edition (Patrick)

: Can you really buy watches as an investment?

For the most part, no, not successfully. Sure, people with great knowledge, instinct or luck can amazingly make money off just about anything.

Generally yes, this is true...

But luxury watches are *depreciating* assets -- meaning they normally lose value over time. So unless you really, really know what you are doing (or really, really trust your luck) it is waaaaaay smarter to invest in things that generally go *up* in value.

Generally yes.

Here's the thing...

For the most part most luxury (and even economy watches like Swatches) are mass produced and like Derek says the minute they hit the customer's hands they lose 35% of their value if not more. There is a rule of thumb that I learned from David Greenspan that typically on-line watch dealers will offer 55% of MSRP on a minty watch and will settle to sell at 65% of MSRP with the difference being their margin. So, if you buy a watch new at an authorized dealer at $3,000 one should only expect about $1,650 if you were immediately to offer it to one of the plethora of on-line dealers and those dealers would probably list the watch at $2,200-2,400 hoping to get about $1,950 for it. Now this above is for current models and recently discontinued models... After a watch is discontinued it might have a burst of activity where collectors who had meant to purchase an example chase down the remaining examples available, and the price might peak for a short period of time. After that, the value of most watches will fall for a number of years when they aren't worth anywhere near what they were when they were new or readily available. Then over time, usually at least 10-20 years, but possibly longer, they will start to rebound and become more valuable as collector's start getting interested in them. So investing in watches is typically stupid in the short and medium term, and typically the only hopes one has in getting a decent return on investment is when their values are on the rise usually when they are well in the "Vintage" catagory.

Some watches have a reputation of holding their values well. Rolex in particular has a reputation of holding their value over the years. As long as you haven't trashed the watch, if you bought a Submariner 5 years ago, you would likely be able to get your money out of it today and in the future. In fact the most common Rolex models: The Sub, 'Dweller, the GMT's, etc. frequently have a resale value a couple hundred dollars short of what a new one sells for. So if you bought a Sub 10 years ago at what was the going rate in 1994, with price increases you might get a sizeable chunk of change over what you paid (because of inflation) if you sold it and because Rolex has increased it's prices over the years, you might only be a couple hundred short of the purchase price of a new one.

As for making money... What Derek says in brief is true... If you have a good grasp of knowledge or good instincts, or are lucky you can make money on watches over time. Vintage watches I purchased routinely for $500 and under four or five years ago now go for $800 and up through $1,200... Some watches that I purchased for $1,000-$1,800 even shorter periods of time ago) routinely go for $2,000, $3,000, $4,000 and more too. A number of factors are at work here too.

First off I'd buy the best possible watch at as low of a price as I could, I'd know as much about the watch as I could and the reasons why it was desirable. At the time (1999-2002) vintage watches were plentiful on eBay and on the internet and prices were reasonable. In the mean time the number of websites and hence available information on many different types of vintage watches has increased greatly over the past couple of years. When I started out, I hadn't written anything, Jeff hadn't either, and Derek had only started. When there is more information out there people can research the subject better and feel more comfortable purchasing. Also, in the past couple of years "the herd" as I call the set of watches available for purchase has thinned out greatly. When I first started collecting there might be 3 or 4 pages of Autavias on eBay at any given time, today it's very uncommon to see a full page of listings. I remember when were 6 or more pages of Speedmaster listings, today two pages is more common, sometimes, barely two pages sometimes maybe just over two pages.

So if you bought a CK2915-1 for $4,000-$5,000 five years ago, yeah, you could easily double, triple your investment or even more. But if you bought a 1973 Speedmaster Moonwatch for $900 in 2000 your moonwatch would probably be worth between $800 and $1,000 on eBay today. It's a gamble. Like Las Vegas, you can do things that increase your odds, but you have to be careful, good and luck has to go your way.

For more info on resale and investment, see the Buyer's Guide here at Chronocentric:

http://chronocentric.com/watches/buyersguide.shtml

Do I think the Senna will be a good investment over time?

If it's a mechanical movement, is well cared for and everything goes well, you should be able to get your original investment out of it. I don't know if it would keep up with inflation or the cost of living, or if you could get any return on your investment after adjusting for those items. If you put that money into a Rolex, chances are you'd get your original investment back and more nearly up to the amount a new example would cost you. Most watches will either not return your initial investment or only just return your original investment, but very few watches will be worth more or significantly more than initial investment.

Seriously, buy watches because you enjoy doing so. Buying watches as an investment is probably not your best investment/retirement strategy. Invest in property, energy futures, tax-free municipal bonds, you'll likely end up with a better return on your investment than buying a new watch hoping you'll make money on the deal.

And remember nearly all of this pertains to LONG-TERM investment. In the short term, unless you buy with the intention of selling to a waiting buyer, you're not going to make any money.

Good Hunting!