Monday, January 30, 2017

The Buy Back

The core message of the Bloomberg article on the Swiss watch industry was hardly news: Swiss export was declining in every month of 2016. However, what caught me by surprise was this bit: according to the Federation of Swiss Watch Industry, watch manufacturers have bought back USD $1.3 billion worth of stock from their authorized dealers! Clearly, the manufacturers would rather buy back the stock and fill in their storerooms than to tempt dealers to discount. This is a surprising new strategy that will prevent a price drop but it will also further reduce production output. Rest assured that whoever decided to scramble serial numbers (and prevent buyers finding out the manufacturing date) is now regarded as a true industry visionary.

On the contrary, readers’ feedback to Bloomberg's article was less amusing. In essence, general wisdom revolves around two points: a) luxury watches don't sell because millionaires are frugal and b) not only do smart millennials no longer need watches to tell the time, but they are averse of showing off their status by wearing expensive watches. As far as I am concerned, both explanations are equally inaccurate.

While some millionaires are indeed misers and penny-pinchers, the majority of them actually do enjoy their life. The overwhelming majority of millionaires travel business and first class, not economy. Many of them live in luxury homes and love their hobbies, and don't mind spending their hard-earned cash on the things that give them pleasure. However, what makes them stay millionaires is the ability to delay the purchase and completely ignore the 'urge for instant gratification'. Millionaires rarely buy goods at the retail price level and would never pay a premium. They are simply waiting for that very special deal - whether it is a house or their favourite stock, a car or a watch - and are ready to close the deal when it suits them. They also have that very special power: the ability to instantly recognize the true (intrinsic) value of a goods or service and know the difference between value and price.

The myth that youngsters are no longer interested in fine timepieces is equally pathetic. I am yet to see a person - of any age for that matter - who is blasé, indifferent or apathetic once they strap on their wrist a 'live' ticking marvel of mechanical engineering and learn about its history. "I LOVE it" is the most common reaction, and often, that very timepiece becomes the first of many in a journey of sophistication and appreciation. The reason why millennials prefer iPhones to Pateks is that most of them simply have no disposal income and have not yet been enlightened and exposed to the wonderful world of horology. Youngsters have their priorities, and rightly so; education, family, mortgages and travel should always have the priority over investing in depreciating (yet so enjoyable!) assets. I say: give them enough time, and most of them will eventually 'get there'.

I for one am waiting for the Swiss watch treasure chests to fill in, flow over, spill out and to reach the grey market, and then to reach us, the ordinary people.
The sooner the better!

Tuesday, January 10, 2017

Rebelling Against the Swissness

Nancy Holten, 42, from the Canton of Aargau is a vegan and an animal rights activist.

She has been living in Switzerland since she was 8 years old. She is fluent in Swiss German and her children are Swiss. But Nancy’s application for Swiss citizenship has been rejected more than once.

Her sin: annoying her fellow villagers with her activism. Things like looking out for the wellbeing of animals. Cows wearing heavy cow bells; piglets racing and hunting; annoying church bells. Her outspoken comments in the media have made her “unwanted in the community”, and consequently, the fellow villagers are ‘rejecting’ her naturalization.

A spokesman for the local Government puts it nicely: “…Mrs Holten is rebelling against traditional Swiss values within the village…”.

Ah, bloody rebels…

Monday, January 9, 2017

rebelde in action!

Thanks to comrade Jesper, owner of a rebelde Control Tower Mark II, for sending this awesome photo in of his rebelde altitude test.

The temperature was -17C and he's pointing at Grossglockner, the highest mountain in Austria at 3,798m. He was pleased to report there was no condensation or issues with performance.

Pleased as we are, we're but not a bit surprised. Thanks to its super robust case, the rebelde is one of those rare beasts capable of withstanding extreme temperature changes while remaining fully water resistant, even with the crown pulled out.

Some of you might remember a little experiment with the first assembled rebelde which was frozen for 3 hours, then defrosted, yet which didn't miss a beat. Quite frankly, that was the moment I knew we were onto something here at rebelde HQ.

Friday, January 6, 2017

Free Expertise: Fool's Gold

I am sure that every lawyer on my mailing list would agree with me that self-representation in Court is not the brightest idea. There is that old saying that a lawyer who represents himself has a fool for a client. If lawyers use lawyers, what chance would a person like me have to win a court case?

We take it easy on Friday - trying to close the busy and stressful week as peacefully as possible. And so do you. My intention is neither to upset you nor to lecture, but I do have to point out something that for most people is obvious - and yet, for some, not so.

If you have bought a watch from a private seller then you are defining yourself in a court of second-hand dealing. Basically you are saying to yourself - and to the seller - that you are confident enough to conduct the deal; that you are 100% sure that the watch is genuine and you have no doubts in regard to its provenance (and that you are not dealing in stolen goods).
Which is all fine, and yes, in the majority of private deals, the saving justifies the risk.

However, you can't have it both ways: if you are defending yourself in court, you can't just call a lawyer halfway through the trial and ask for a free tip. And if you decide to buy a watch on eBay or Chrono24 then please don't call me either. It's not that I don't want to help - I just can't. I cannot tell whether the watch is genuine or not based on a low-resolution picture.
And quite frankly, no one can.

Buying a year old TAG or Omega watch which comes with the box, papers, receipts and valuation documentation is not that difficult. Such transactions are often straight forward ones.
Parting with cash on a 10 year old watch which comes with no box or papers is a skill. Making the same decision on a 60 year old vintage Rolex is an art form and believe it or not, there are probably no more than a dozen people in Sydney whom you would trust to conduct a deal on your behalf. Vintage watch experts are hard to find!

In my early days I used to deal a bit with a well-known Sydney dealer who would call in from time to time to 'check if I have anything valuable'. It was always interesting to watch him inspecting my stock - to the fine detail. He would take his time with the loupe, inspecting the dial and hands, and even made me disassemble the mechanism just to be sure everything was genuine. He was not a watchmaker himself, so I could tell that his expertise was gained after many years of dealing in watches, trials and errors, and without doubt, he paid the price of self-education. To this day, I respect his attitude - and the way he bought watches taught me that being 'extra careful' is the way to go. I can proudly say that I have never bought a fake Rolex and I hope I'll never will.

When it comes to vintage watches like Patek, it is fair to say that I am only a half-an-expert. Firstly, the Australian Patek market is miniscule and there are simply not enough watches in circulation to learn the finesses of the brand. Secondly, the return on investment is not worth my trouble. I would rather buy 10 Breitling than one Patek. And quite frankly, I don't know of any dealer in Australia who can honestly claim that he is an authority on the subject. To be a true Patek dealer you would have to set up your shop in Tokyo or London, New York or Geneva.

Louis Breguet was the most famous watchmaker of all time. Actually, he was so successful that even during his life, there were 10 fake Breguets for each genuine piece. You can only imagine how difficult it is to authenticate Berguet timepieces now, 200 years after they were created.

Only experts who have devoted their entire life to work of Breguet and who have restored his timepieces could call themselves an authority on the subject – a handful of watchmakers, museum curators and horological historians. And you can be sure that none of them would offer their expert opinion free of charge, based on a poor quality image or an eBay listing.

There are lawyers and lawyers, dealers and dealers - and each to their own.
Horology is enjoyed best when you deal with experts you can trust. And often - especially to someone who is just discovering the beauty of watch ownership - buying a brand new piece from your favourite brand shop is the way to go.