Clueless flippers

 

If you are even casually interested in YouTube watch channels, you must have noticed an avalanche of videos warning you that “watch collecting is dead,” “the market has collapsed,” and that you “must sell now before it’s too late.” The doom and gloom. The horological apocalypse of unimaginable magnitude. These creators and “watch gurus” are the same fools who, only a year or two ago, were telling you that investing in watches was a smart way to make money — and have fun. The truth is simple: all those videos come from small-time flippers on limited budgets, whose main activity is YouTubing and e-begging. They feed on gossip and stir up controversy. They are in the game for clicks. As a long-time subscriber to my daily newsletters, you have a perfect opportunity to see what stock is available, the volumes, prices, trends, what’s popular — and what’s not. We operate in the entry- to mid-price level, with an average sale of pre-owned Swiss watches at around $6,500. So the facts below reflect that segment. However, this is the price band with the most market activity, and the one of greatest interest to novice and intermediate collectors and enthusiasts. As such, it represents overall trends accurately. Fact 1 Good quality stock, priced attractively, is almost impossible to find. There is a strong demand for extra-fine, pre-loved Omega, Breitling, Cartier, Rolex and numerous other brands. This demand is constant and unaffected by the economy, interest rates, inflation, or disposable income. A four-bedroom house on a large block in a leafy suburb with an ocean view will always find a buyer. And so will a mint 1990s Omega Moonwatch. Fact 2 We see no slowdown in the watch trade. Yes, the COVID years were significantly busier, but COVID was a once-in-a-lifetime anomaly. We buy and sell multiple watches every day. Most go to newsletter subscribers, but many are sold in our shop, through our website, or via personal recommendation. Business as usual. Fact 3 We have not seen a major collection liquidation in years. The last time we bought 25 watches in one go, from a single seller, was well before COVID. Collectors are not selling en masse. If we can buy five pieces at once, we consider that a major volume deal. Fact 4 Prices of new watches are going up — and they will continue to go up. Manufacturing costs, labour costs, energy costs, and the cost of modern machinery in Europe are constantly rising. The Swiss are not newcomers to horology; they’ve been playing the luxury watch game for two centuries. They know when to increase production and when to slow down. They’ve been through every financial crisis and are playing a long game. A Swiss industrialist is cashed-up, old-money, debt-free, and running a manufacturing facility that has specialised in a particular field for generations. The economics of watchmaking will not change even if you wake up tomorrow to news that Russia has resumed supplying cheap oil and gas to Europe on a scale never seen before. It won’t happen — so don’t hold your breath. Rolex, Patek, Cartier, Omega and Breitling are not going out of business. Consequently, prices of fine pre-owned stock will continue to rise. Don’t waste your time on clueless YouTube fools. But if you’re still puzzled by the trends, ask yourself a simple question: Am I buying a watch next year or not? I bet you will.

Rebel without a cause

 

On Wednesday night, I stayed behind the bench longer than usual. Nothing beats the most productive hour of the evening - half past seven, when the city slowly falls asleep. Around eight, as it was time to call it a night, I was still roaming through the junk box, looking for a "dollar deal" for tomorrow’s premium subscribers. And there it was: a perfect candidate. An old Citizen Diver, still ticking. With a massive scratch on the case - which, thirty years ago, rendered it unsellable. “I reckon I can polish this one in less than fifteen minutes!” I exclaimed loudly. “No, you won’t,” a voice replied. I was quite sure the staff had left two hours earlier. I looked over my shoulder, but there was no one in the office. “Don’t you dare touch me! Put me back in the junk box!” said the Citizen. “Worry not, mate. In no time you’ll be as good as new,” I replied. “Leave me alone, I am sovereign. Besides, you are not a qualified Citizen repairman,” said the watch. “Listen, you shitter, I am a third-generation master watchmaker, and you are a worthless piece of junk. You may be worth a dollar - but not yet.” Swiftly, the Citizen was subjected to a buff. But only a second later, it flew away from the spinning wheel, hit the ceiling, then disappeared into the darkness under the bench. I arrived home tired and worried. That stupid shitter could have hit me right between the eyes. Now, you may say this is all nonsense - watches can’t talk. Fine. But hear this. The next day, I arrived early. I had completely forgotten about the incident. But then I remembered that I still needed a bargain to feature. The moment I pulled open the drawer with pocket watches, I heard another voice: “Herr Hakko, we need to talk!” There were more than fifty watches in that drawer, but I knew exactly which one was complaining: a 1940s German field piece, a Grana, with a loud escape wheel. “What do you want now? I am busy! Keep it short!” The usual stuff. He was complaining that he didn’t want to be in the same drawer with 'asiaten'-  Seiko Railway pocket watches. “I want to be placed in the middle of the display case, where I deserve to be! I am not just an ordinary pocket watch - I was built for Wehrmacht!” Yes, the delusional self-grandeur stuff I’ve heard so many times before. “No way. In this shop, all watches are equal. Your glory days are long gone - you’ll remain where you are.” “On display, to be seen and heard! I am built to last forever!” he demanded. “You can’t go on display. Your radium hands still glow in the dark, you are a radioactive hazard. A danger to customers. Toxic to everyone. But he wouldn’t listen. With a swift swing of the Bergeon case opener, I snapped Grana’s balance staff. My shop. My rules.

The first and only watchmaker-manufacturer in Australia?

Do you know that starting a watch repair business in Australia requires no formal education, certification, or licensing, or even experience? You can call yourself a watchmaker, print a bunch of business cards, and start a business literally today. Yes, you can call yourself even a Master Watchmaker! And if you find repairing watches a bit boring, then you may skip that altogether and start your own brand—and show Rolex how it’s done. I am not making this up. In Australia, we have a number of watchmakers who lack both skills and qualifications, yet they are visibly present, advertising themselves for years as ‘independent makers.’.  About ten years ago, when the Rebelde project took off, one of the driving forces behind the project was a desire to establish the NH brand in a way that it could face fierce competition. I always thought, well, if I can start a watch brand, then surely there would be other watchmakers who can do the same. I was expecting plenty of competition from within the industry but also from individuals who are mechanically minded, have sufficient funds to invest, and are willing to learn the trade. It turned out that ten years later, we are the only people capable of making watch components and complete watches in Australia. The purpose of this short article is to provide you with facts. To empower you, so you can differentiate and assess horological ‘manufacturing’ claims yourself. After all, as an Australian watch collector and enthusiast, you should be armed with the facts. Here is a short list of some of the NH watchmaking capabilities developed in recent years.  1. Design, reverse engineering, and engineering of complex, multi-component devices Multiple workstations. We use the same CAD software as used in the Patek factory. 2. Milling Ability to manufacture various parts using five-axis CNC mills. We use the same CNC machines that make key watch components for Lange, Rolex, and IWC. 3. Turning We are capable of making cylindrical parts by CNC turning, ranging in size from a fraction of a millimetre to the size of a watch crown. Again, we use the same automatic lathe as Swiss watch manufacturers. 4. Wire EDM The cutting-edge technology! Wire EDM allows us to make not just some of the most complex parts that could not be made manually, but also to prototype various one-off parts. 5. Gear hobbing The ability to manufacture watch gears was traditionally the most challenging aspect of watchmaking. Even today, only a selected few can claim true in-house gear hobbing fame. Our CNC gear hobbing machine was built by the Swiss leader in the field of gear making, the very same model used by top Swiss brands like Patek, Vacheron, and Rolex. 6. Thermic treatment of machined parts Extremely challenging! We are mastering it slowly but steadily. 7. Tool and fixture making This is a completely separate field of engineering and manufacturing than the watchmaking itself. Yes, we make our own tools and holders. 8. Grinding Precision grinding is an art form. While we use CNC grinders, the grinding process is still a combination of computer and manual skills. 9. Case manufacturing With the NH55 project, we have completely immersed ourselves in the manufacturing of complex watch cases. We are capable of making cases in stainless steel, titanium, composite resins, and even ceramic. 10. Micro-particle blasting and polishing Both internal and external watch components are finished using various applications. We make things beautiful. 11. Guilloche A horological art form where precision and intricacy take the enjoyment of watchmaking to a completely new level. Unlike Swiss watch dial manufacturers, who use soft metals to create guilloche patterns, our specialty is guilloche in titanium and Timascus. We are extremely proud of our ability to manufacture dials and hands in-house. 12. Anodizing The ability to turn a dull alloy into a fireworks of colour is what makes NH different from most other watchmakers. Anodizing is tricky! It takes lots of skills and patience to master it.  13. Dial printing Yes, completely in-house! We print our dials using the same printing machine used by Omega! Down to exact Swiss paint… 14. Measuring Over the years we have heavily invested in cutting-edge, high-precision measuring equipment. Our ability to measure manufactured components in the submicron range provides us with an unparalleled ability to make components in the submicron range. Without precise measuring, there will be no precision manufacturing. During this year, we had the pleasure to share with you a number of exciting projects of our involvement as a key manufacturer in medical, space, electronics, and scientific projects—for local and international customers and universities. It is important to highlight the obvious: that our manufacturing capability is first and foremost a result of our ability to manufacture watch components and complete watches in Australia. Again, the purpose of this short article is not to brag about what we do. We still see ourselves merely as students of horology on a journey that will take a lifetime—or two—to master. What an exciting journey it is! The Australian-made watch is here—and if you wish to join us, we are looking forward to serving you in years to come. Happy Watchmaking and Happy New Year, NH & the team

What makes a watch "collectable"?

 

Definition A collectable refers to an item worth significantly more than it was initially sold for because of its rarity or popularity. Are wrist watches collectable? Only a tiny fraction of all watches in circulation are collectable, have collectable potential, and are worth collecting. The vast majority of watches are intended to be simply worn on the wrist for practical reasons (because they tell time!) or as a fashion / jewellery piece.  What makes a watch a 'collectable'? There are a few 'key ingredients'. Rarity (small production run), popularity ('iconic model'), association with a celebrity or historical event, being made by a reputable / famous maker or a brand. What is important? Condition, condition, condition. That relates to all aspects of the physical, mechanical and aesthetical properties of a watch. A watch 'put together' from bits and pieces which may be original, but from a different era would be far less desirable than one which contains parts that started life together on the assembly line. A watch which comes with original box, certificate, instruction manual and guarantee card is regarded as a complete set. Such pieces are highly desirable by collectors. Obviously, a watch has to keep time to be regarded as a watch. What else? A collectable watch is one that is well documented and well researched, down to the most minute detail. Reference books, historical sales records, manufacturer's catalogues, ownership data, provenance - all the 'supporting' information associated with a brand and model - to help us determine why two seemingly identical pieces vary in price, often significantly.  Practical example Here is an example of a watch regarded as a perfect collectable piece in the entry level price range. Omega Speedmaster Moonwatch, Apollo 17.

The ref. 3574.51.00 is a limited edition of 3000 pieces introduced in 2002. While the dial is the same as the regular 3570.50.00, it features a special caseback commemorating the 1972 Apollo XVII mission and E.A. Cernan being the last man to set foot on the moon. Issue: 3,000 watches, individually numbered. No 0161/3000. Sold new in 2004. Overall condition: very fine, 9.8/10. This rating means that while the watch has been worn, it was worn sporadically, by a careful owner. Very lightly polished, showing no external imperfections. The dial and hands are spotless 10/10. The watch is an excellent timekeeper. The chronograph function: perfect. Water resistant.  Full set. The watch comes with original commemorative box which itself is in exceptional condition, the outer box, the plastic hang tag showing model reference number and serial number, intact Certificate of Authenticity, numbered. Also, it comes with original the Operating Instruction booklet, International warranty card correctly stamped, showing the date of sale and dealers details, movement serial number and model reference, and pictogram card. Value While we have no crystal ball to predict the future market trends, this watch is a perfect example of a rare, well documented, historically important model by Omega. A complete set like this will always find a keen buyer / investor, today, as well in the years to come. The event commemorated by this issue still stands as an unbroken record of human achievement - for the past 52 years, no human has stepped on the moon. And even if somehow we do have a manned lunar mission, such a milestone would only reinforce the historical importance of this piece. In my opinion, there is plenty of potential for further growth in popularity of the Cernan Moonwatch. Best of all: a piece like this could be enjoyed and worn by a careful owner for many years to come, without further affecting the overall condition.  Not only you can have your cake - and eat it, but finding a better example than this one could be a daunting task, especially in this price range.

Would you pay $500 for a slice of wagyu?

 

If you have three and a half hours to kill, here is a suggestion. A Deutche Welle documentary titled "Twenty Japanese businesses making the most expensive products." A match made in heaven: Deutche Welle's masterful cinematography and objectivity showcasing the Japanese pursuit for perfection. And no, the documentary has very little to do with money or price; and everything to do with craftsmanship, patience and time. The Japanese say that it takes 3 years to learn how put a piece of eel meat on a skewer. And a lifetime to learn how to grill it to perfection. A bar of ink takes four years to cure. Made exactly the same way as it has been for the past 400 years, by the same maker. The same level of attention to detail and pride goes into a hand made iron kettle to boil water for ceremonial tea, hand made master chef's knives, and katanas. Our NH55 Timascus project - a watch where we make the entire case, dial, hands, and 80% of the internal components in our own workshop, started as an attempt to showcase our ability to make watches, in Australia, specifically for the Louis Vuitton competition.  A year and a half later, the series of 16 watches is just about to be completed. Those who follow us on Instagram have an opportunity to see first hand how complex and exciting this project is. Yet as we shape Timascus, Timascus is shaping us. We are learning not just about how to make a parts more precise and more beautiful, but also about us; ultimately, about our contribution to the world of bespoke horology. This is both painful and exciting at the same time; the same feeling of a marathon runner batting the last few kilometres of the race. There is nothing to worry about - the feedback is great and support overwhelming. Yet with the every new watch assembled, we are wondering what the NH55 owner is going to look like? A watch enthusiast who already has two dozen Swiss top end watches looking for something unique and different; a local supporter who may find the watch so tempting that he will be ready to sacrifice two or three other watches just to get his hands on it; or perhaps, an overseas buyer who only invests in Independent makers. Or - just someone who will simply fall in love with the beauty of Timascus and say - I'll have it. The truth is: we really don't know who our 'typical' buyer is, nor if such a category of buyer even exists. A number of visitors to our shop who saw the first few NH55 assembled asked "Are you happy?" The answer is - yes. I am personally, as well as the rest of the team. We are happy because the watch does represent what we wanted and intended it to: it represents us. It represents our ability to shape the Timascus to our absolute best ability, at this point in time. Above all, we are happy that the project has demonstrated how serious we are about making watches. Josh's Instagram post from last night sums it up very well: How many watches will be sold, and at what price they are going to be sold is really irrelevant. We focus on perfection. I strongly suggest that you watch this short clip here: https://www.instagram.com/p/C5UbwnePHbW/

Off to space! Update from the workshop

 Yesterday was very exciting- we are in space!

A local Australian company launched a metaphorical "bus" to space. On the bus were payloads from many other tangential Australian space companies, including Spiral Blue, who we mentioned a few weeks ago. Another company that we do some critical hardware manufacture for is called Valiant Space. Valiant is a young company in Brisbane, manufacturing in-space non toxic space propulsion systems. In short, ultra small rocket engines. These rocket motors are responsible for steering the bus in space. Without them, It's safe to say that the mission would be very... directionless...

NH Micro has been working with Valiant for over 3 years, producing valve components for their rocket motors. The valves control the flow of liquid into the combustion zone. They are tight tolerance, highly critical components- parts that we are leveraging our experience in watch manufacturing to help parallel precision industries attain their precision goals. We love making space parts, especially when they are actually deployed in space.

If you'd like to have a look at the launch, here is a short video.
https://www.youtube.com/watch?v=foP7bSjtffM

Manufactured in Australia, by your very own watchmaker. 

Josh

Update from the workshop

More than just watchmaking:

This last week we have been tackling a fairly complex problem from a local medical company. Without breaking any NDAs, the parts called for some extremely small grooves to be made in PTFE, Teflon.

Traditionally, working with plastics is actually quite easy. The tool wear is low, and the material is quite forgiving. But with Teflon, micro-milling is more analogous to trying to cut bubble-gum with a spoon.  Making a groove that's just under half the width of a human hair becomes a very large challenge when dealing with Teflon! Due to the quick turnaround needed on the job, we had to make the tool that would create this geometry ourselves. We used some micro-grain tungsten carbide, a very hard, homogenous material used for most cutting tools, and used a series of diamond wheels to grind the desired cutting geometry.

First a cone was ground, and then very precisely split down the centre of the tool. The resulting geometry is a very precise V shape, with sharp edges that are able to carve out the Teflon, in the same way that an ice-cream spoon creates a nice curled scoop.

The tool is then placed into our Kern micro-milling machine, measured, adjusted and then introduced into the Teflon - with the line "scribed" to the desired depth.  The first-principles mechanics behind the process are very simple. Using an exacto knife to cut a profile in a piece of cardboard, or dragging your foot in the sand to mark the lines of a beach volleyball court, or making the guilloche pattern on the dial of a MK2 Curl Curl, all use the same basic cutting action.  The execution... that's where the devil is in the details!

Most interestingly of all... the only reason why we were able to take this job on, and execute it in such a fast time frame, was due to our stable, in-house processes behind the guilloche of the MK2 Curl Curl. Our sister company, NH Micro, was able to leverage the watchmaking experience that birthed it, and offer it to local, Australian owned and operated, high tech businesses. After years and years of setting up, and trying to build horological capability in Australia, we are finally edging closer to the point where we can give back.  Horology has always been intermixed with parallel precision industries, whether it be time measurement enabling the exploration of the world and the universe through celestial observation, or life saving medical instruments leveraging manufacturing knowhow from the artisans that made screws and pinions for watches in the 60s and 70s, or now, in Sydney, where the "too old, too dumb, and unwilling to invest" are enabling the broader Australian advanced manufacturing industry to thrive... Josh