Vintage Rolex's and US$500,000 watches

In April 17, 2008, the Antiquorum sold 270 lots of vintage Rolex watches for a total of US$8.5 million. This kind of thing spurs Rolex collectors to try to identify in advance what Rolex watch (or what other luxury watch) might turn in a big profit in the future. A few days later a Rolex Daytona sold for US$505,000 at a Sotheby's auction.

The US505,000 Rolex Daytona

Recently, there has been some chatter about the Rolex Milguass 16400 GV with the green glass being a limited edition (altough Rolex never said so) and rumors about the sapphire green crystal being hard to produce. This lead to the price of the watch escalating to as much US$16,000-18,000, or 250-300% from its manufacturers suggested retail price. The imminent release of the new Rolex Sea-Dweller DEEPSEA, has raised some speculation that the current model Sea-Dweller will be discontinued, and hence may become a rare watch in the future. The 14060M submariner has also been discontinued, and the last batches in 2007 were the COSC certified. The 14060M's sold in the past did not carry COSC certification. Is this the new "Red" Submariner.

None of this watches will be the most sought after watches 30-50 years from now. I will tell you why.

1. Limited means almost non-existent.

• Case 1: Rolex Double Red Seadweller Submariner No Valve. A prototype thin cased Double Red Sea-Dweller, without No Helium Gas Escape Valve , sold for US$237,600. How many of these were ever produced? I don't know, but now more than 30. That is the becuase Rolex only produced 30 cases of this type. These watches were never offered for sale to the general public.
• Case 2: 1967 Rolex Oyster Perpetual Date Double Red Patent Pending Sea-Dweller Submariner Mark I. A 1967 Oyster Perpetual Date Double Red Patent Pending Sea-Dweller Submariner Mark I also sold for US$276,000. Rolex produced 114 of these watches in 1967.

2. Limited does not mean Limited Edition.

• Case 1: 1979 Rolex Oyster Perpetual Date Comex Sea-Dweller Ref. 1680. A 1979 Oyster Perpetual Date Comex Sea-Dweller sold at the Antiquorum auction for US$248,800. This was the highest priced watch at the auction. Only 50 of these watches were ever produced. Worse, having produced for Comex, these watches would go back to Rolex for service and upgrading every six months or so, and had their dials, hands and crystal updated. The Comex Sea-Dweller sold at the Antiquorum auction was one of the few that did not and retained its original appearance. This watch was never available for sale to the general public and the total number of Rolex watches produced for Comex in their 27 year partnership probably does not exceed 2000 watches.
  
• Case 2: A 1973 Rolex Mil-Sub. A 1973 Rolex Submariner issued to the British military sold for US$166,800 at the Antiquorum auction. This watch was produced for the British Special Forces. It was never available for sale to the general public and a total of about 1,200 in variuos configurations were produced.

3. The watch that you want wont be the one.

• Case 1. 1958 Rolex Oyster Perpetual Milgauss Black Dial. A 1958 Oyster Perpetual Milgauss Black Dial in stainless steel sold for $190,400 in the Antiquorum auction. The 1958 Milguass is a Model No. 6451 sold from 1954 to 1977. The Rolex Milgauss was the slowest seller on the Rolex line-up and the line was discontinued in 1988.
• Case 2. 1971 Rolex "Albino" Daytona. Now we comes to the prize. Sold at the Sotheby's auction in April 2008 for whopping US$505,000. What makes this watch rare... well it was owned by Eric Clapton. Seriously, it has white face with sub-dials that do not contrast white the color of the main dial or have outlines on the sub-dials that contrast the color of the dial. It was a design that was not too popular, as the contrasting our outlined sub-dials make for better visibility. If you at the Rolex Daytona models today, they have no "Albino's". Basically, a unpopular variant of popular model.

I am not saying that it is not worthwhile to good investment to purchase a new Rolex as a pure investment. But when there is a buzz on a particular watch, you probably would have a dozen or more people keeping it in mint condition, with a mind to wait for it to appreciate. And because of this, it wont be the one. If you can find it NIB, it wont be the one. Its like keeping brand new US Dollar coins and waiting for them to appreciate in value.

If you really want to buy a Rolex (or other Luxury watch brand) which will substantially appreciate in value, your best bet is to buy one of the lower cost vintage ones sold at auction. I recommend you read this Forbes interview of Rolex collector Evan Zimmerman. He bought a 1954 Rolex Red Submariner at auction eight years ago for US$1,500. How much do you think that will be worth today?

The other option, the one I like better is too buy whatever Rolex (or other luxury watch brand) makes you happy today. The one that makes you feel good by just putting it on your wrist. Wear it. Use it. Care for it well. Have it serviced only in the official service centers.

It is a good investment right now. Who nows, it may prove to be a better one tomorrow.