Should I Invest in Patek Philippe? That is The Question

In short, no. But that answer makes for too short of an article.

The past few days I have been asked the “How’s the Patek market?” question countless times. If only there was an app that accurately tracks how strong or weak the Patek Philippe vintage and modern market is relative to sales volume and prices day by day, like a stock ticker tracking the Dow Jones, NASDAQ or the S&P. Would we see red or green in recent weeks? Sadly, this app does not exist (yet, but it will) and for now, asking dealers and auction house experts is the best way for collectors to take the temperature of the market. So here is Collectability’s opinion on the Patek Philippe market, and before I get hundreds of messages saying that I am biased towards the strength of Patek, here’s the plain truth: Of course, my opinion is that you should buy Patek! But please read on with a few caveats and few words of caution and opportunity.

No horsing around: this enameled Patek Philippe pocket watch sold at Sotheby’s in September 2022 for 478,000 USD. Image credit: Sotheby’s

There are articles going around advising not to invest in anything that ‘can be printed’ (such as stocks, bonds, and even currency) and some that predict the dollar will crash next. All this leads to speculation and Collectability has seen in recent days an uptick in the sale of Patek Philippe vintage watches again, just as we did during the pandemic. There is a gold-bug mentality in the collecting community and whenever traditional markets crash, interest grows in buying alternative, safe-haven assets such as a gold watch. Nothing is as old school as a gold watch for retention of value! And now with increased security concerns, people are seeing the value of collecting a watch that stays discreetly on one’s wrist, rather than flaunting a steel Nautilus while driving a Ferrari. Recent auction prices have shown strong results especially with rare handcraft and complicated pocket watches. Take for example, this Anita Porchet Patek Philippe that just sold for 478,000 USD at Sotheby’s in mid-September.

Even this week, we have seen an auction that seems to set the stage for market results we expect to be seeing this auction season. The October 5, 2022 Sotheby’s Hong Kong sale proved (yet again) the rarest and most important pieces will consistently bring record numbers. The ref. 5002P, for example, brought an impressive 1.6M USD all-in (especially big number considering this example does not have its original box or certificate). On the other hand, a ref. 5711/1A brought 112,000 USD which would have seemed like a huge bargain just a few months ago.

This auction has proven yet again that modern trophy watches continue to bring stronger and stronger relative results. However, we have not yet seen ‘big vintage’ results this season since the HK offering was mostly modern. I recently had an extensive conversation with a client who was debating what Patek Philippes to buy and what Patek Philippea to sell. My advice from this chat could be watered down to this: sell what you can easily replace if you should ever have seller’s regret (explicitly I am saying sell your 5711/1A’s while they are still bringing triple retail, you can always buy another down the road and it will most likely be at a lesser price), and buy unique pieces that you could not easily find on Chrono24 on any given day (explicitly I am saying buy important vintage Patek Philippes or truly unique modern watches.). Put another way, seize the opportunity to buy something truly special but don’t try to market time commodity watches. Odds are you will loose. At the end of the day, Sotheby’s HK sold 18M USD in watches this sale, mostly modern, and it shows bidding is still robust and global. However, from a Collectability perspective, we are very interested to see how vintage Patek Philippes do in sales more focused on pieces from the past rather than the present. All indications are we are going to see HUGE numbers for pieces that cannot be replaced tomorrow.

Take a look at these links to see some of the big auctions around the corner later this month and November that will feature important vintage Pateks: Luxe Auctioneer, Christie’s Dubai Online, Monaco Legend Auction, Sotheby’s Geneva AuctionChristie’s Geneva AuctionPhillips Geneva Auction.

Monkey business: contemplating which stocks to invest in. Image credit: Geek Culture

First, big disclaimer, past performance does not guarantee anything, and these are my opinions. You are welcome to have a monkey pick your stocks instead and your returns are going to be impressive.  Second, and most importantly, if you are fortunate enough to have financial security and have significant disposable income, then you could and should consider buying Patek Philippe watches. This article will tell you why — and gives you the excuse you need to buy that next watch for your collection. So please see below.

Five Reasons You Should Be Buying Patek Philippe

  1. You Love It

If you are reading this article, odds are you already are in love with the world of Patek Philippe and everyone has their different reasons. So, here’s some more Kool Aid to fuel your fire. Warren Buffet is often quoted as saying:

“The rich invest in time; the poor invest in money.”

Sage advice: Warren Buffett holds the Patek Philippe Caliber 89 while he thinks about investing in time. Image credit: HSWA

The point of this quote is that investing in time gives you so much more than dollars, and the pursuit of the ideal use of time is the ultimate luxury. Personally, when I see Buffet’s quote, I take it literally. It makes more sense to buy watches than to invest money in more traditional investments. Just one look at my retirement account these days reinforces this belief exponentially. Many people love many things about collecting Patek Philippe and the most common themes I hear are the enjoyment that collectors have in meeting others along the way and the fact that Patek Philippe watches have a very, very strong historical record of holding their relative value over time. Bottom line, if you love blue chips, Patek Philippe is as good as it gets.

  1. You Need It 

Okay, so no one needs a Patek Philippe but based on what I hear from collectors, their desire to own particular Patek Philippe timepieces transcends ‘need’. The all-consuming desire to acquire the next watch is something that many collectors can relate to experiencing. And that feeling of waiting for the watch to arrive via Brinks, or going to pick it up in person is — unforgettable. And Patek Philippe knows this — even in the below ad from the 1970s.

Keeping its weight in gold: a Patek Philippe ad for the Ellipse circa 1970s. Image credit: Collectability
  1. You Believe in It 

These days many people are asking if the watch market is in jeopardy? Ironically, Patek Philippe literally was just on the famous American T.V. game show Jeopardy. The clue was: ‘You never actually own this Swiss luxury watch says its slogan you merely look after it for the next generation.’

Cardi B rocks her blinged-up Patek Philippe Nautilus. Image credit: CNN

It is astonishing that Patek Philippe has made the cross over to global pop culture awareness. Even a few years ago, the thought that Patek Philippe would be featured as a Jeopardy clue would be unimaginable. And now endless songs feature Patek Philippe watches in their lyrics. More people than ever before are learning about Patek Philippe and believe in the brand. More people are equating to more demand and the supply of vintage is what it is. The market forces of supply and demand is something everyone can believe in.

  1. Your Friends Like It Too
Fun with Friends: the Patek Philippe Gondolo Gang in the early 1900s enjoying a picnic and their watches. Image credit: Patek Philippe

As more people believe in the magic of Patek Philippe, we see how relationships are reinforcing around like-minded individuals. Thanks to the internet and social media, people with similar tastes and horological desires are finding each other and fueling the fire of Patek Philippe. Like the Patek Philippe Gondolo Clubs of days past, the present day online chat rooms, WhatsApp groups, GTGs, retailer events, etc. are bringing people together around Patek Philippe like we have never seen before. Or should we say the Patek Philippe watches are bringing us together? The importance of the community aspects of collecting cannot be understated. And this is only the beginning …

  1. You Know That More People Are About to Love it Too

The Patek Philippe collecting category is still relatively young. Technology is bringing collectors, buyers, sellers together in ways we have never seen before. Now I am seeing how technology is breaking down walls between people that have a common obsession for Patek Philippe but may not speak the same language. Watching Instagram translate languages from around the world emphasizes the importance of this technology. I see on our posts, comments in Mandarin, Arabic, and I can immediately see what people are saying as its translated. The meaningful global dialog is changing the way we connect and communicate globally on a personal level – and many of these conversations start around a Patek.

In conclusion, historic downturns have proven to be the best time to buy a Patek Philippe. With modern production watches, we expect to see more availability of inventory soon. Many modern collectors are beginning to be more realistic in pricing when and if they choose to sell. And even with recent prices increases out of Geneva, suggested retail prices are generally more than fair. With vintage Patek Philippe, this is where Collectability sees an epic buying opportunity and the best of the best pieces will continue to bring a premium. Just wait and see what happens this auction season — new world records will be made, and we will see vintage Patek Philippe watches bring unimaginable prices in the near future.

Image credit: Collectability

As the above advertisement from 1949 stated, or perhaps predicted, “What can be a finer investment?” Patek Philippe literally wrote its own storyline and it took a pandemic to let the secret out. With historically small production numbers, unparalleled quality, diverse offerings, and a relatively tight control of distribution, it is the ideal equation that Patek Philippe is recognized as the ultimate status watch.

A final thought … considering all the robust propaganda outlined above, Collectability proposes this prediction. Fear is the only thing keeping the Patek Philippe market from continuing to grow exponentially. Fear of authenticity, fear of fraud, and fear of the Unknown. As technology continues to evolve and allay this fear, it is our position that more and more people will enter the Patek Philippe market and drive prices to much higher levels as the demand grows and supply dwindles. Technology, especially blockchain, will soon assist us in identifying beyond a doubt a ‘good watch’ and the provenance will be concrete. (Stay tuned to learn more about this …)

Now for the cliché … rather than buy what you love, I propose you research what you love. And most importantly, enjoy the treasure hunt. I often don’t know what I want to own until I see it, research all the information I can find on it, hunt for it, and then — I Love It!

Collectability is all about giving you the knowledge to enjoy the hunt. Eighteen months ago, we looked at the Nautilus market asking if we were at the beginning of Patek mania, or the beginning of the end? Since then, Nautilus sales have been on a roller coaster that no one could have predicted. The same goes for today, no one can really predict the markets, but we know for sure it will be full of surprises.

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