Buy Or Not To Buy: Young Independents

If you ask me, I would recommend against buying a watch from a young independent company. This is my general rule, and this has nothing to do with the quality of the watches, because young independents make some amazing watches, and I do mean amazing! My recommendation is simply based on the economics of the watch industry itself.

Currently, buying a watch brand new has never been a bigger ripoff. If one compares prices of watches today to even 20 or 30 years ago, factoring for inflation, watches are one of the few things in our world that are actually much more expensive.

For example, as a younger person, I remember buying an average computer in 1997. It had a 2GB HD, 32MB of RAM, and a 12x CD-ROM drive. It cost me without the monitor $2500. The monitor was an addition $1200, for a grand total of $3700. Of course, these were 1997 dollars, not 2017 dollars. In other words, factoring for inflation, spending $3700 in 1997 is like spending about $5500 today. And yet, my last computer which ranks at the same level as my computer in 1997 did (among the fastest/best I could buy), cost me far less than $3700, let alone $5500.

Do the same exercise with any watch from any era of the past and you will get the opposite result.

For example, a Rolex Daytona in the 1960s, when it was first released had a very hard time selling with it's MSRP of about $250. In today’s dollars, that's just $1750. But head over to any Rolex boutique and there is no such thing as a Daytona under $10,000. In fact, the least expensive Rolex you can buy is still 3 times more than what a Daytona would have cost you in the 1960s.

So, again, buying a brand new watch has never been a bigger ripoff than in today’s modern era regardless of brand. And this applies to the young independent brands as well.

But young independents are lacking in one key area, which is pedigree.

Part of the reason why watches are so expensive today is because watch companies need to cash in as much as possible when the iron is hot. Luxury watch sales and vintage watch sales really had a kind of peak over the last decade until 2016, when sales dropped by nearly 45%. If any particular company played their cards right, they stockpiled much of that profit for the rainy days approaching. In other words, at best, surviving as a watch company is really really hard. The Quartz crisis of the 1970s killed hundreds of companies, and many others were bought up by companies like The Swatch Group, who was part of the problem as they produced many of the cheap Quartz watches people were buying instead.

We’re talking brands with a serious pedigree like Omega, Longines, Movado, Waltham, Ball, Heuer, Blancpain, etc., etc. So, if they couldn’t survive on their own, how did the young independents of the 1970s do? Well, not very good. And if you invested your hard-earned money, you pretty much lost it all as the majority of those watches also lost value and are not worth very much today.

But as just mentioned, buying a watch today is nowhere near as economical as it once was, so you are investing even more of your hard-earned money with a very high risk of losing it all. To that end, you’re better off hedging against losing it all by buying from a brand that has been around since at least 1900, because they’ve gone through all kinds of ups and downs and survived.

For example, Vacheron Constantin as been around since 1755. Whomever the founders were, they’ve been dust for centuries. But, as a company it's lived through all World Wars, the US Civil War, countless disasters in Europe, etc., etc., but they are still one of the three “Holy Trinity Watch Brands”. So, without having access to a crystal ball, logic tells me they’ll probably still be around well after we’re gone. And that means any watch I buy from them will most likely still have value by the time I pass it down to my kids, grandkids, etc.

It’s not a 100% guarantee, nothing is, but the odds are definitely in my favor with brands like Vacheron Constantin, etc.

This is also one of the reasons why Rolex is always such a hot seller. Rolex has built their reputation to the point where it has the best reputation of any company in the world according to the Reputation Institute. Rolex is the first company to score higher than 80 of 100. No other watch company made the top-100. So, again, chances are a Rolex you buy today will most likely have value tomorrow, and this has nothing to do with how good or not a Rolex watch is or isn’t.

In fact, many young independent brands today are producing watches Rolex and others only wish they could. But, unless you really really love such a watch, for whatever illogical reason, or unless you had serious money to burn, my recommendation would be to bypass young independents altogether and stick to buying from brands that have stood the test of time. To me, that means a brand that has been around since at least the year 1900 (Rolex was founded in 1905, but that's close enough).

As a final warning, beware those who would say otherwise. I don’t care if they are brand ambassadors, watch collectors, watch writers from “famous” blogs if they say it ain’t so, use logic and follow the money because what they’re doing (besides lying), is trying to sell you something. It’s still a ripoff and illogical buying a luxury/high-end watch anyway, but at least you’ll have invested in something that will be worth something after your gone, and if your lucky, the watch may even be worth more.

You’ll thank me and so will your heirs.