The 1906 novel “The Gift of the Magi” by American writer O. Henry features a scene that reveals the value of a watch as a commodity. The poor couple, Jim and Della, Try to buy each other Christmas gifts by selling their most precious possessions. Jim, The husband, Sells the pocket watch that was passed down to him from his grandfather and father to buy an expensive hair accessory for his wife, Della.

The Gift of the Magi ⓒgregg-shorthand

Although the novel does not specify how much the pocket watch was sold for, It is easy to infer that watches had exchange value even in the past. In this article, I would like to consider the potential of watches as stable commodities and assets.

Exchange Value of Watches

Not only watches but most goods have exchange value, Whether that value is large or small. Watches have long been regarded as high-value items. In the Middle Ages, Mirrors and glasses were exclusive to the upper class due to their high prices, But today they are easily manufactured and their value is not what it used to be. Looking back to the era of Abraham-Louis Breguet, His clients were kings and nobles, The highest economic class, So watches were not items that just anyone could own. They were very expensive and had high exchange value. As precision instruments, Watches maintained high prices due to their characteristics.

The Citizen Pocket Watch 100th Anniversary
ⓒ horbiter.com

In 1924, When Citizen of Japan changed its company name, Then Tokyo mayor Goto Shinpei chose the name Citizen with the hope that the company would be loved by citizens for a long time. This reflects the intention to make watches, Which were expensive at the time, More accessible to the public.

Seiko Quartz Astron 35SQ ⓒ seikowatches

With the advent of quartz watches and the passage of time, Watch prices fell and their exchange value also decreased. However, Early quartz wristwatches were not like that. The first wristwatch, The Seiko Astron, Was even released with a gold case, And its price at launch was considerable. It was equivalent to the price of a mid-sized car. When mechanical watches experienced a revival in the 1980s, They gained new value for themselves. That value was none other than luxury. Mechanical watches could differentiate themselves from widely available and inexpensive quartz watches, And thus increase their own value. As a result, The exchange value of mechanical watches rose again.

Liquidity of Watches

If you are reading this, I assume you like watches and wear them every day. Let us consider this scenario. While traveling abroad, You become so immersed in the local atmosphere that you let your guard down and your bag containing your wallet and passport is stolen. Fortunately, The watch on your wrist remains safe. If you are wearing a Rolex or Omega, You could pawn or sell it and easily convert it into cash. Having cash on hand would give you some peace of mind and help you recover from the situation.

Pawn shop ⓒ Rolex Forums

This may not be the best example, But in tourist destinations with large casinos such as Macau, You will find many watches displayed in pawn shops. Rolex likely accounts for the largest share. Rolex, Which has similar value anywhere in the world, Becomes an excellent means of liquidity with outstanding exchange value. This is because strong and consistent pricing policies and high demand maintain stable exchange value. Thanks to the liquidity of Rolex, You could try your luck at the casino again to reclaim your watch, Or at least secure enough funds to return home.

Volatility of Value

While Rolex maintains stable exchange value, Panerai at this point in time does not have a promising outlook as a means of liquidity.

Panerai Radiomir Officine PAM1385
ⓒ barrons

Although its value has declined, One could invest in Panerai with an eye on the future, But this would require the assumption that Panerai will undergo dramatic positive changes. Limited editions that recreated vintage pieces played a major role in the Panerai boom of the early and mid-2000s, But excessive releases quickly exhausted that momentum. As a result, Enthusiastic fans left, And unclear direction made it difficult to attract new users. While both Rolex and Panerai have exchange value, They show contrasting aspects in terms of value and liquidity.

Watches as Assets

The fact that watches have exchange value and liquidity means that they can be considered assets. Watches do not physically deteriorate over time, And if well maintained, Their usability remains intact. They are small and easy to store, And unlike cars or yachts, There is no tax burden for acquisition or maintenance. However, As mentioned earlier, Not all watches have high exchange value or liquidity, And this can fluctuate depending on the management of the watch company. Of course, Such fluctuations are risks inherent to non-cash assets such as real estate and stocks, So risk management is necessary. With models such as the Patek Philippe Nautilus, Audemars Piguet Royal Oak, Rolex Daytona, Submariner, GMT-Master II, Omega limited editions, And rare pieces from each brand, Risk can be minimized.

Paul newman Daytona, Christie ⓒusa.watchpro

During the COVID-19 pandemic, When massive liquidity flowed into the watch market, The potential of watches as assets was reaffirmed. Before that, The asset potential of watches had been confirmed through auctions by Christie's, Sotheby's, Antiquorum, Phillips, And others, In a manner similar to art transactions. Watches that fetched high prices at auction often did so due to their rarity or association with celebrities, So for the general public, There were barriers to assetizing watches. In addition, The difficulty of attending overseas auctions and significant transaction fees cannot be ignored.

VIVER 126610LN Price Trend

However, With the emergence of online trading platforms such as Chrono24 overseas and VIVER domestically, As well as online auctions, It has become much easier and more transparent to liquidate watches. Now, Even ordinary people who find it difficult to obtain rare watches can assetize and manage watches. Like stocks, One can consider holding undervalued or temporarily depreciated brands or products and profiting when their value rises. Furthermore, Greater profits may be obtained by purchasing vintage watches. Unlike stocks or bonds, The joy of investing in watches is that you can enjoy owning and wearing them. If you view them purely as investment goods, You may simply store them in a safe.