Edit 30 July: I never intended for this essay to communicate that “fake Mark XVIII watches do not exist at all”.

So let me clear something up: FAKE MODELS OF IWC MARK VXIII DO EXIST… and many have rushed to inform me of this easily verifiable fact.

Call it allegory, metaphor, or whatever you like... but I make no apologies this time. Some people continue to impress with their stupidity.

I think counterfeiters might be some of the most reliable ‘accidental analysts’ the watch industry could ever wish for. These people don’t publish research notes or attend earnings calls, but their opinions do come to us in the form of products. If these people decide your watch merits a £600 superfake with a cloned movement and perfect alignment, then hey, congratulations… the market will have certified that your genuine watch has a premium over its cost of production. And that’s all it is… a counterfeit watch is essentially an arbitrage position on the gap between what a thing costs to make and what your friends at dinner believe it cost you to buy.

And of course, if the counterfeiters can’t be arsed with your brand, that’s a kind of research note too, right? That brings me to IWC’s Mark XVIII. After my recent essay about Richemont, a reader, , left this comment which I promised to chew on:

“Could introducing CPO programs help ailing brands like IWC and Piaget? Or even Panerai? If mid range spenders are priced out of a Mark XX at $6k, maybe a CPO Mark XVIII at $4k looks really attractive and keeps that buyer from going gray?”

I really liked this comment. It’s constructive, commercially minded, and best of all, it’s trying to save both buyer and brand… which is more than most McKinsey decks manage. Unfortunately, I don’t think it would work… and the reasons why it won’t work actually shed light on what’s broken inside Richemont’s watch division.

Estimated reading time: ~19 mins

What does CPO sell?

Ignoring all brand considerations, I think any certified pre-owned programme sells three things. (1) Authentication i.e., the brand promises the watch is real. (2) Factory warranty i.e., the brand swears the watch works and that it will work for a while. (3) Access i.e., they are letting you buy something you otherwise couldn’t have bought immediately.

Rolex is the obvious example and we already know that CPO works well because all the recent reporting seems to point upwards. Authentication of course is worth a lot because Rolex is the most counterfeited watch on earth and the good fakes are now scarily good, to the point where even dealers get caught out. I guess the warranty is nice, but Rolex watches run forever, so, fine. The big draw with Rolex is the third thing: for maybe 8 or so years now, you couldn’t walk into an AD and buy sports models at retail. Having a CPO watch in the display case became ‘access’, and the data shows that people do pay for this. Certified Rolexes are around 25–35% above comparable non-CPO grey-market stock (about 27% on average in North America, per the last data I saw), and frequently, these are above the new retail price.

All this means is that Rolex CPO is just a toll booth on scarcity. It exists to let authorised dealers charge impatient people on the waitlist an impatience tax, and it comes with a green wax seal to boot.

Ok so that’s Rolex. Now try to do this with IWC. Authentication? Well, we’ve already established the counterfeiters don’t give much of a damn. Yes, crude fake IWCs do exist, but there is no superfake industry for the Mark series that I know of, because faking has fixed costs too. If they go through the hassle of setting up the tooling, clone movements, and so on, they’d be manufacturing a counterfeit of a watch whose genuine sibling, with box and papers, goes for just over three grand from mainstream ADs and probably a lot less on Chrono24. Do you think anyone would bother parasitising a premium that isn’t there?1

How about the warranty? Well, that’s cheap to offer anyway but IWC has a specific problem, which is that they kinda give this one away. Standard cover is 2-3 years, but then if you register the watch it goes up to eight years of coverage, so a CPO warranty adds almost nothing. So what is the boutique certifying? You can’t exactly sell someone a warranty if they already have one!

As for access… IWC made nearly 120k watches last year. There is no velvet rope here; there is barely a rope at all.

Now suppose the boutique wants to sell that CPO Mark XVIII at £4,000. It buys the watch in at £2,600 or so, puts £600 of factory service into it, reserves a couple of hundred for the warranty, and carries boutique-grade rent and staff on top. Meanwhile, a grey dealer with a website and a camera sells the same watch for £3,120 all day long (20% mark up). This means the brand must now get into a price war against its own depreciation… and it’s fighting that war inside its own shop, because the £4,000 certified Mark XVIII is three feet away from the £6,000 Mark XX… and it seems to be telling every customer that a new IWC is worth a lot less the moment it leaves the building. I have to say it’d be pretty bleak if the boutique so openly presents an argument against itself!

Ok, another angle… forget retail margin for a moment. If IWC went out to the market and bought Mark XVIIIs at £3,200 when other dealers are paying £2,600, it would be boosting its own secondary market. Given this is a brand whose problem is depreciation, they might choose to pay for that. Rolex does something like this by accident; so why shouldn’t IWC do it on purpose?

Well, if IWC made roughly 120,000 watches last year and has been making six figures for years, let’s assume there are north of two million watches to worry about. To move the clearing price for a market of that size you’d need to buy a big chunk of it, above market, all while you’re adding another 120,000 units a year to the ocean you’re trying to empty out. Rolex can hold a hard floor because Rolex controls supply. IWC’s supply is the problem.

“Fine,” I hear you say, “but at least the trade-down buyer stays in the family instead of going grey.” But does he, though? I mean, he was always going to buy the used watch; the only question left to ask is where he was going to buy it. What the brand gains here is a sliver of margin on a discounted sale. But what it loses is the one thing an ailing luxury brand cannot spare, which is the claim that its watches hold their ‘meaning’ over time. All of which is to say… a CPO programme at a depreciating brand simply certifies depreciation!

That said, Jaeger-LeCoultre started this thing called the Collectibles programme in 2023 where they had a dozen museum-grade vintage pieces, sourced from around the world, and restored in-house without ruining any of the patina. Quoting the linked article:

“The scale of the programme is restricted to a curated selection of rare and sought-after Jaeger-LeCoultre timepieces. The announcement coincides with the presentation of the eponymous The Collectibles coffee-table book. This reference book covers 17 of the Grande Maison’s most significant models of the last century, including some Reverso, Geophysic, Futurematic and Memovox watches produced between 1925 and 1974.”

Apparently most of these get sold within hours. You may already know, but Vacheron already does a similar thing with Les Collectionneurs. Regardless, this is a ‘step up’ from pure CPO because CPO tells people “we’d like a cut from selling used watches.” This Collectibles thing says “our past is so valuable we buy it back.” I know it’s subtle, but the framing is everything and I think it’s got legs; we’ll come back to this a bit later.

Same diet, different blood type

Ok so CPO isn’t the right answer… but all of the above isn’t even the main reason it fails. Suggesting CPO as a fix is basically taking something which works for Rolex and copy/pasting it onto IWC. If you’ve ever received advice from an obscure nutritionist, this will make sense: looking at Rolex to work out how to fix another brand is like trying to borrow a diet from someone with a different blood type to yours. (The blood-type diet is, for the record, complete nonsense. That is more or less the point.)

That shit doesn’t work!

This isn’t even limited to CPO… look at what the Richemont group did since the 2000s… build in-house movements (because Rolex has them), roll out boutiques everywhere (because Rolex sells through controlled retail), push prices up all the time (because Rolex can). I suppose it worked out for Vacheron because they had low-enough volumes, some room to climb, and a somewhat iconic sports watch during a sports watch boom - so it went from ~€380m to over €1bn. For the rest of the brands, the same diet, with a different blood type, is what produced the 3.4% margin we discussed a few weeks ago.

In both cases, the mistake was to treat strategy as some sort of cookie-cutter thing. It isn’t. A strategy needs to be developed inside a specific brand the way an organ grows inside a specific body (and why transplants get rejected!). So in terms of setting a strategy, they have been asking “what did the winners do?” when they should be asking “what problem does THIS brand have?”

As for Richemont’s three saddest watch brands, I think they have three different problems (which, to my point, would require 3 different fixes).

1. IWC has a business-model problem... so the economics are screwed.

2. Panerai has a trust problem… because they betrayed their tribe of loyal fans.

3. JLC has a legibility problem… because regular people who aren’t watch nerds have no idea why they should give a damn about JLC.

One solution will never fix all of them equally (or at all), which is why I worry about “shrink to grow” as a group-wide slogan. If you’re wondering what that looks like, I’ve given it a go… let’s look into these three brands and see how they might be fixed.

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If you’re new to SDC, welcome! When you have some time, check out prior editions of SDC Weekly here, or peruse the archive here.

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Estimated reading time: ~38 mins

In case you missed these posts in the last week:

📢 New: Community Reviews

The other day I got an email to inform me that a paid subscriber had unsubscribed from SDC. If you’ve ever done this on Substack, you will know Substack offers you an option to say why you unsubscribed. This reader was kind enough to leave one line of feedback:

“Got immensely bored by the repetitive contents”

I have always believed feedback is a gift, and this is especially true of negative feedback. So I emailed and thanked him for the feedback, and asked what he found repetitive and what he would like to see instead. The guy was super polite, and explained how he seeks insights on the psychological stuff elsewhere, and doesn’t care for the market reporting either. So really, it wasn’t a matter of him thinking SDC sucked, but more that he, personally, didn’t care much for what SDC covers. He did however offer some useful insights on what he would like to see more of, and one thing he mentioned was honest watch reviews.

Regulars will know I have only done two reviews on watches I own, and frankly, it’s not my forte. But his feedback got me thinking; I have many friends who have epic watches, and maybe they would love to talk about these watches? So I asked one of my good friends (his IG here) about a watch of his I saw in person recently. He was more than happy to answer my questions, and that makes him the first guest for this new segment in SDC.

Some of you may know about Hodinkee’s ‘Week on the Wrist’ series and that was decent; I see this new segment as more like ‘at least a few months on the wrist’. The idea is for readers to get direct feedback from regular civilians who spent their own cash on a particular watch. I expect to run these every other week, or maybe every 3 weeks… but honestly, I would be happy to run it every week if you enjoy them (which will also depend on whether I can find candidates who are willing to send me responses that frequently!). With new stuff like this, I’d really appreciate your feedback, so please let me know what you think… good and bad, I welcome all of it.

Without further ado…

Watch: Patek Philippe 5270P-017 (red dial). Purchase price: €235k

[My own edits or comments are in square brackets]

The 5270P-017 (red dial) is my third 5270P since 2021. I have owned the 5270P salmon and green dials and funnily enough, I genuinely thought that each would be my last.

The 5270P is simply a GREAT reference, this is particularly the case if you actually wear the watch regularly and don’t just covet some kind of safe queen investment piece - I’m calling out all the 5970 and 5004 owners who love to bash the 5270 here :)

As an uber-Patek-fanboi, I simply love wearing grand comps or rare hand crafts as dailies. A Patek perpetual calendar chronograph or perpetual calendar split chronograph are simply my favourite watches to put on, bar none. Picking up my 5204G was the first time I genuinely felt that I would be happy not getting another allocation ever again.

I get some kind of perverse pleasure wearing any complicated but stealthy watch to go about my mostly mundane life of school runs, grocery shops and corporate shilling. If the 5270P ever does catch someone’s eye its usually either because they too, are a genuine Patek fan/dreamer and are delighted to see a GC [Grand Complication] being worn in the wild, or they are a non-watch geek who simply appreciates the aesthetic. In both cases those encounters are always delightful; I can’t say the same for encounters when wearing a Nautilius or Aquanaut as these often come with more negative assumptions about the type of person I am… or just allocation envy.

I was surprised by just what a difference a simple colour change makes to the ownership experience of this reference. The red dial feels way more sporty but can be worn high (with suits and black tie) or casually (jeans, t-shirt etc) - it’s the perfect all round dress watch.

I gotta say I was less than happy that Patek shipped it with the old style clasp but this is typical Patek - they probably still have thousands of the old clasps in inventory and will still be shipping them for the next decade. I told my AD to tell Thierry that clients aren’t expecting a 200k GC to come with the now outdated peasant clasp. It was a joke but some truths are told in jest…

I have mixed feelings on the new more “sustainable” straps. They’re kind of cool but I am old school in that I default to a Grand Complication primarily being on a classic black croco. Mildly irritating that I’ve had to pay for a special order black croco with red stitches.

Could even be [that I] didn’t wear it much.

I wore it every day for 3 months until summer hit and I switched up to a Nautilus. Delighted with it so far and zero complaints or issues.

It’s kept time, no scratches despite being worn every day to do everything and presents as new. It’s not a watch that needs to be nannied. Only thing that has ever scratched any of my 5270Ps is the diamond from my wife’s engagement ring; she DGAF [doesn’t give a fvck] about doing so either. Dagger to the heart.

The colour graduations in the dial in different shades of natural light.

[I mentioned I got to see this watch in person, and while I was slightly put off when I saw it on IG, I have to say this dial is unbelievably good in person. The red dial is really my pick of all the variants, and so this answer may seem like some BS comment, I really have to agree here.]

[I wear it] Everyday and everywhere because I don’t save stuff for “special occasions” - life isn’t a rehearsal. Also I want my sons to see me wearing the shit out of all my cool stuff in order to learn that we own stuff and not the other way around, downside is that the greedy buggers already want to know when/if they’ll inherit it.

I’m on my third 5270 - all bought at retail with a price increase of almost 50% over time but yes, I would buy again at retail. 5270s and indeed 5204s are absolute steals on the grey market right now and I think in time people will regret not buying them at today’s secondary prices.

N/A

Only in the summer months when I would prefer to wear something more sporty as I swim, hike and bike a lot.

Much like most 911 owners know, the right way to own a 911 is to drive it daily; same goes for 5270s - my advice would simply be to make sure that you wear the hell out of it.

I thought a 5970 (G or P) would be my ultimate Patek Grand Complication grail but having obtained a great example 5970G (after my first 5270P), I was surprised to find that my experience of living with a 5270 was far superior. After having owned and enjoyed a 5270P, I actually found the experience of wearing a 5970 underwhelming. Of course it is nice when wearing the 5970 to get the Patek aficionado nod from the Geneva Seal crew, but whilst there is a part of me that does like the approval from other collectors, I am confident in my own taste to only keep what I truly enjoy wearing. The 5970G has been long sold although I retain the right to reverse that decision 😅🤣 [sic - for the emojis, I didn’t add these!]

If you are equivocating between a 5970 and 5270 do not be swayed by the weight of opinion out there that defaults to the 5970 and 5004 being superior to the 5270 and 5204, particularly if you actually want to wear and enjoy the watch on the regular. And given current basement prices on the 5270 and 5204, getting one of these might well deliver a better ROI as well as a more enjoyable ownership experience.

And that’s it… simple, short, and sweet… in the owner’s words. Again, please share your feedback on the format, any other questions you want to see in future editions, and the watches you want to see covered (ideally, if you know someone who owns a watch you’d like to see featured, please ask them to contact me. Free subscribers: you can reply to this email too!).

Leave a comment

I will end with a huge thank you to CK for agreeing to do this; I appreciate you brother!

P.S. if you’re thinking about volunteering for the next review, you can do it anonymously if you prefer.

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Way back in 2017, even before the auctioneer at Christie’s stepped up to the rostrum, Salvator Mundi by Leonardo da Vinci had basically been sold. A third party had agreed to buy it for around $100m regardless of what happened during the actual auction on the day. Which meant there was no option for the sale not to happen, and the only unknown was by how much the gavel would beat the $100m floor. In hindsight, I guess it sucked for the guarantor because it was beaten by a lot. There was a 19-minute bidding war and then the hammer fell at $400 million ($450.3 million with fees). Right now, it’s still the most expensive artwork ever sold at auction. Regardless, the person who provided the guarantee still managed to collect a fat slice of the upside for his trouble, and he never even had to buy the thing for real; all he had to do was promise to buy it, and then got paid for the promise.

Estimated reading time: ~28 mins

Last time I wrote about the running order in an auction, and we also covered where in a sale-sequence the big watch will be placed, and why the crescendo is never usually reached on the final lot. That section in SDC Weekly was all about choreography: the saleroom is an instrument someone has tuned. This time we will talk about what’s beneath the choreography and get into the money plumbing to explore things like estimates, reserves, guarantees, and irrevocable bids.

The romantic idea of an auction is that it’s the closest thing the world has to honest price discovery. There’s no list price, no haggling in a back room, no manufacturer telling you what something is worth… it’s just a public room, which involves some sort of ‘real-time fight’ between people who want the thing, and a number at the end that is, supposedly ‘by definition’, exactly what the market will bear. So, they say it is the truest price there is, and that it was discovered in the open, in front of everyone.

That’s a lovely story, for sure. And much like most other lovely stories about markets, it’s doing a lot of arm-waving to stop people noticing the ‘engineering’ behind it. In reality, by the time a lot crosses the block, up to three separate mechanisms have already influenced that so-called ‘discovered’ price - one anchors it, one truncates it, and one can pre-arrange the whole thing before the doors open. And before you file all this under some art-world disease that watches are immune to, hold that thought, because in November 2023 all of these mechanisms went off at once in a Geneva watch saleroom - in public - and I even wrote about it at the time. We’ll get there eventually.

First, let’s cover the some of these mechanisms - roughly in order of how much they should bother you.

Estimates are anchors

This is the number you see first - the pre-sale estimate. £80,000–£120,000. Mostly, it appears to be some kind of honest forecast (the house’s best guess at where the watch will end up). Of course, it is not really a forecast, but a tool, and it’s doing at least two jobs that have nothing to do with telling you the truth.

The first job you already know if you read the last essay: anchoring, which is the Kahneman & Tversky bias where any number you’re shown, however arbitrary, will drag your own estimate toward it. Beggs and Graddy found it in salerooms specifically, where a lot’s price gets anchored on the figure attached to it, and bidders don’t adjust too far away from that figure. So the estimate was never a neutral guess. The house has chosen your reference point for you, and your sense of ‘a fair price’ will stay tethered to it whether you like it or not.

The second job is a little counterintuitive; you’d assume the house wants a high estimate - meaning it will aim high, anchor high, then sell high… right? Well, in a one-on-one negotiation, sure, that could be a good idea. But an auction isn’t a negotiation; an auction involves a crowd, and with crowds, this logic works in reverse. There’s a paper by Gillian Ku and colleagues with the self-explanatory title ‘Starting Low but Ending High’; they did a bunch of studies and found that in auctions, lower starting points produce higher final prices. You’ve probably seen this in action on eBay yourself, but I’ll share some reasons why this works.

A low number lowers the barrier to entry, which causes more people to start bidding. Once you’ve bid, you’ve sunk a little time and ego into the thing, so you escalate to defend your position (the same instinct that keeps you waiting in queues that aren’t moving - you may have heard the term sunk-cost fallacy). Also, a busy lot looks valuable - a crowd of bidders is itself a signal, so traffic begets traffic.1 When you put those together the cynical strategy seems easy enough; estimate it low, watch a dozen people pile in who’d never even have started at the legit number, and then let the competitive arousal (from the last essay) do the rest. A lower estimate is bait.

A working paper with the superb title ‘Biased Auctioneers’ concluded that pre-sale estimates don’t necessarily reflect what the house expects the hammer to be; they’re shaped by strategy and by the house’s own behavioural biases. Auction houses, the authors note, are brokers of information, and they get to decide how much of it you see. The long-standing trade suspicion, according to people who’d know, is that estimates are routinely set on the low side - on purpose - just to pack the room.

Reserve is a floor, and some of the climb to it is theatre

Hidden behind the published lot estimates is a number you’re often not allowed to see, called the reserve. This is the minimum the consignor (seller) will accept; below this, the watch just doesn’t sell. By near-universal convention the reserve is set at or below the low estimate - never above it - which is the one reliable and useful fact in this whole system, so file it away. The published estimate range and the secret reserve are joined at the hip, and the bottom of the range is roughly where the floor is.2

Auction theory is a bit counterintuitive regarding the reserve; one foundational result is Roger Myerson’s ‘Optimal Auction Design’ - the paper that, together with Riley and Samuelson’s the same year, basically founded ‘modern auction theory’, and eventually helped Myerson to a Nobel prize in 2007.3 Their main point was that the revenue-maximising reserve is higher than the seller’s own valuation, and - this is the strange part - it’s independent of how many bidders show up. So the theory says you should refuse to sell below a price that’s more than you’d privately accept, and hold that line whether two people or 200 turn up. You’d think setting a floor above your own walk-away number is stupid because you’re choosing, sometimes, to keep the thing rather than sell it - but it works, because the credible threat of not selling makes the people who do want it bid harder. A reserve is the seller’s option to walk away, and the option has value because it’s real.

Real salerooms then deviate from the theory when they keep the reserve secret (which the simplest theoretical models don’t endorse) and there’s some evidence that this secrecy actually costs them. The classic test sold Pokémon cards on eBay - Katkar and Lucking-Reiley compared public minimum bids against equivalent secret reserves and found the secret reserve tended to deter bidders and depress outcomes, because people don’t want to waste effort bidding ‘into the dark’ against an unknown floor. Auction houses keep reserves secret anyway, but this is more about consignor relations and flexibility than revenue maximisation.

Then there are also games which turn the reserve into pure theatre - I went through this back in the day. When the live bidding hasn’t yet reached the secret reserve, the auctioneer can keep bidding anyway, against the room, by taking bids that don’t come from anyone in particular. This is called ‘chandelier bidding’ (and also called ‘bidding off the wall’), where the auctioneer announces successive phantom advances, conjured out of thin air (or ‘off the chandelier’), to build momentum from the opening up toward the reserve. Apparently it’s legal, and it’s disclosed in the conditions of sale. This means that in the early life of a lot, some of the ‘bidding’ you’re watching is a performance - the auctioneer summons invisible competitors to carry the price to the floor below which the watch was never going to sell. Only above the reserve are you guaranteed to be watching a real fight. Below it, you may be watching a man bid against a light fixture. Anyway, if a lot fails to clear the reserve it’s ‘bought in’, and as I covered last time, a bought-in watch often gets burned - everyone saw that nobody wanted it, and that stigma tends to follow the watch to its next sale.

One of the comments under the last essay asked whether the rules on all this phantom bidding differ by venue - the commenter’s understanding was that an American auctioneer may bid against you up to the reserve, while in Hong Kong the house can run you all the way to your maximum. I went and checked, and the printed rules are more boring than that. Christie’s Hong Kong conditions use the same formula as everywhere else: the auctioneer may bid on behalf of the seller ‘up to but not including’ the reserve, will not identify those bids as the seller’s, and may not bid the seller’s interest at or above the reserve. No house’s published terms, anywhere, claim the right to bid you toward your own ceiling. That would be shill bidding proper, and nobody’s lawyers will write that down.

What really differs is the referee. In America there’s a statute behind the contract - UCC §2-328: if the seller’s bidding wasn’t disclosed, the buyer can void the sale, or take the lot at the last honest bid before the seller joined in. New York City used to go further and require a sign at the saleroom entrance - twelve inches by eighteen, letters an inch high - spelling out that the auctioneer could bid for the seller; the city binned those rules in 2022 to lighten the load on the houses. Hong Kong, on the other hand, never had an auctioneer statute to bin. There, the conditions of sale pretty much are the law, with general contract and fraud rules somewhere behind them. So it may seem like the same promise on paper, but you’d probably face very different consequences for breaking it.

But back to the original comment; that commenter’s instinct actually leads us to the absentee bid. If you leave a written bid you will have handed the house your maximum, in advance, and in writing. The terms promise to execute your bid as cheaply as the other bids and the reserve will allow on the day. But the problem is, the chandelier is permitted to climb to the reserve against you, so when it’s a lot with no legit competition, your written bid can still be walked up to the full reserve. You would have ‘won’, against a light fixture, at the top of the house’s floor. And besides, the reserve isn’t some law of nature; that number is what the house agreed with the seller, and they can revisit it before the sale - meanwhile your maximum is locked in the bidding book. Clearly, nobody has to break a single rule for that structure to favour the house. An absentee bid is a letter that names your price, and rather comically, it’s addressed to the people who set the floor.

—

So to recap… the estimate will anchor you, the reserve will truncate the bottom of the price ladder, your absentee bid will inform the machine of your ceiling in advance… and we haven’t even reached the trick that pre-sold the Leonardo yet.

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If you’re new to SDC, welcome! When you have some time, check out prior editions of SDC Weekly here, or peruse the archive here.

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Estimated reading time: ~35 mins

In case you missed these last week:

🥇 Swatch selling gold below spot

Any business that generates more want than product has to pick a way to ration their stuff. The obvious method is to ration by price; raise it until enough people p1ss off. You can just make more, which of course nobody in luxury likes to do. The third option is to ration by something that isn’t money; this could be a queue, a list, purchase history, whatever.

Price is the most straightforward because price says whoever wants it most and can afford it, will get it. Making more doesn’t work out well, as we already know from examples like Omega and IWC and many others. But how about something that isn’t money? This one is interesting because when you ration by queue or by list, the gap between what the thing costs and what it’s worth doesn’t magically go away. In fact, the whole secondary market is basically a spotlight on who captures the value.

That brings us to Swatch. On 16 July, at 15:32 CEST (which is 13:32 UTC - the moment Apollo 11 left the pad in 1969 - apparently they did that on purpose!), Swatch opened applications for the MoonSwatch Mission to the Moon 1969. The watch is limited to 1,969 individually numbered pieces. The dial, hour and minute hands, crown, and chronograph pushers are all in Omega’s 18K Moonshine Gold. They use a total of 11 grams of gold, the dial is stamped Au750 and also marked “OM” for or massif (i.e., solid gold, which is a designation Omega has used on and off since the 1950s). The watch costs €600, £520, CHF 500, or US$570 excluding tax.

Gold is at €112.94 per gram as I type this. Basic maths tells us that the metal alone is worth more than the watch at retail. Has the team at Swatch forgotten how to do basic maths?

Not so basic maths

Firstly, “11 grams of 18K gold” is not 11 grams of gold. 18-karat is 750 parts per thousand pure, which just means three-quarters gold and one-quarter other metals for hardness and colour. So 11 g of 18K alloy contains maybe 8.25 g of fine gold.

At €112.94/g that’s €932 of gold in a €600 watch which is roughly 1.5x the sticker price. Across the full batch they will use 1,969 × 8.25 g = 16.24 kg of fine gold, or 522 troy ounces, or about 1.3 London Good Delivery bars - melted down and used for gold parts. The metal value at spot is therefore around €1.8m. To add some whimsy to the story, Swatch is said to have priced the gold at its 1969 value… their claim is that 11 g of 18K gold cost $11 in 1969.

Is that right? Well, sort of. There were two gold prices in 1969. The official one, propped up by central banks, was $35/oz. The free market one, after the London Gold Pool collapsed in March 1968, was around $41.76/oz that July. Looking at all four combinations:

1. 11 g fine at the official price: $12.38.

2. 8.25 g fine at the official price: $9.28.

3. 11 g fine at the free-market price: $14.77.

4. 8.25 g fine at the free-market price: $11.08.

As you can see, only one of them is $11 - which links the story nicely to Apollo 11. Swatch needed the free-market fix and the alloy conversion to get to this number. It seems that somewhere in Biel there was a person whose job was to find a gold price that produced the number 11, and they found one.

Nominative determinism for commodity markets... Sure!

Money you can’t have

“Fine,” you say, “so I buy it for €600 and I’ve got €932 of gold. Free money.” Not so fast!

You do not have €932 of gold. What you have is a gold dial with black-lacquered bevelled indices, two pushers, a crown, and two hands, all of which have to be extracted from a bioceramic case, weighed, assayed, and then refined. A refiner pays 90-something percent of spot on clean scrap, minus a lot fee; and by the way, this is not clean scrap at all. So okay, call it €800 ‘recoverable’ if you’re organised and lucky, but you will have destroyed a numbered limited edition that the market will happily pay four figures for, intact. My point is, the melt value is technically a real thing, but I’d argue it’s also just theoretical; how’s that for a sentence you could carve above the door of the whole watch industry?

That €332 value gap does write headlines, though. So many press releases talked about this gold value gap because that is the story - and if you think about it, it’s the only part of the product that a person who has never even heard of a Speedmaster can immediately understand. Gold is expensive. The watch is cheaper than gold. Weird!

Buy it now.

Two P&Ls

A standard MoonSwatch retails at €230 and Morgan Stanley pegged the gross margin at roughly 90% - this implies a bill of materials somewhere near €23 (quartz chrono, bioceramic case, garbage strap, box). If you add in some gold fabrication (casting the recycled alloy, stamping and brushing a dial, machining a crown and two pushers, hallmarking, individual numbering, certificate, etc) let’s call it €85 all-in per watch before you count any metal. That number is indeed made up, so bear with me (or scale everything to your beliefs).

Scenario A. Assume the gold is free. Well, it kind of is. The metal came from Omega spare parts dating to the 1960s and 70s; this stuff was sitting in Biel, and got recast in Swatch’s own foundry. It’s basically inventory so old that it has almost certainly been depreciated down to zero many years ago. Under that treatment, €600 minus 21% VAT is €496 of net revenue, minus €85 of cost, times 1,969 pieces. That gives them €809,000 of profit on paper, for a watch that supposedly “loses money on the metal.”

Scenario B. Gold is worth what gold is worth. Logically, this tracks more sensibly; Swatch Group could have just sold those ounces on Thursday. It’s clearly an opportunity cost of €1.83m, and now they’re facing a loss of ~€1m.

Which is the real number? I guess it’s both! The accountants get Scenario A and the CFO gets Scenario B… and if you have ever wondered how “profitable” and “value-destroying” can refer to the same activity, I present to you Exhibit A: a bioceramic example which you can strap to your wrist.

Why though?

“But this is a daft move,” you object. “They could just make 1,969 gold-dial MoonSwatches, charge €1,200, sell out in nine seconds, bank the money. There are plenty of idiots who would pay that.”

I would agree… there are! At €1,200 the maths tells us it’s nearly €1m more than they will make as it stands. That difference is the more appropriate measure of the marketing spend i.e., ~€1m of profit that Swatch seems to have thrown in the bin.

But what’s a million bucks anyway? Swatch Group did over CHF 6bn of net sales in 2025 with CHF 135m of operating profit, a 2.1% margin, down from CHF 304m the year before. Net profit was CHF 25m, down 89%. So the forgone contribution here is under 1% of group operating profit and 0.015% of revenue. It is, for our purposes, nothing. Frankly, it’s a rounding error with a great story.

And for that rounding error they got… the attention of the entire watch press inside 24 hours and even a new database. I just think that at €1,200 nobody would write excited headlines… then they’d just be another brand doing a limited edition and be accused of cash-grabbing. Having the appearance of ‘free money’ is the press release. You can’t have the money and the exciting story. Swatch chose the story, and given that the story is the only thing that’s worked for them since the first MoonSwatch, I’d have taken it too.

Underlying story

I think this goes beyond even the gold itself. Swatch has a distribution problem it has failed to solve since the first MoonSwatch. In March 2022 there were queues from Ginza to Times Square, one-per-person rules, and flippers making $2,400 against $260 retail. Fast forward to May this year and we saw with the Royal Pop, police were using tear gas in Paris, pepper spray at Roosevelt Field, and stores got shuttered in Mumbai and Singapore, with at least one arrest in Manhattan. A full set of these pops was clearing north of $25,000 on StockX before most buyers had packed up their tents on the pavements. And this was followed by a 72% resale collapse within about 48 hours. Great pictures. Terrible pictures.

So for this 1969 edition they launched this new ESTA thing (Electronic Swatch Timepiece Application). You create a Swatch account, nominate the boutique you’d collect from, and answer 32 questions (!) in two hours and fifteen minutes. The questions are a mix of Swatch history, spaceflight trivia, and some that are just… odd1. Then apparently an internal jury selects 1,969 from the pool of people who answered everything correctly. Selected applicants get 48 hours to pay online and must collect in person with ID and a printed approval.

Will this stop flippers? Obviously not. A professional reseller with a VPN, a spreadsheet of different accounts, and a large language model could get through the 32 questions faster than you could clear your inbox. The 135-minute limit is a gag anyway, it doesn’t take that long.

What this ESTA does stop is casual buyers. And what it also does is move the rationing from price, to something that isn’t price. Swatch is now trying to stop selling to whoever turns up first, and instead, they are picking.

This is like an authorised dealer’s internal list. Rolex spent the better part of a century building a global dealer network to do exactly this, and the collector world has spent the last decade furious about it. Swatch built one in a web form, over five days, and got everyone’s email address, store preference, and short-answer essays thrown in for bants.

Bourdieu would have enjoyed this. The barrier to entry moved off money, where it hadn’t worked (‘everybody can find €600 to double’), and leaned into cultural capital - do you know what Beat Time is, and would you spend your valuable time proving it? It’s basically an audition. Looks to me like a company that has spent four years being unable to tell its customers apart from its arbitrageurs has now found a filter that costs very little to implement.

I have no idea how many people applied, but we could look at this from a customer-acquisition cost perspective… 100,000 applicants, Scenario B’s €1m loss works out at €10 per completed, timed, 32-question, store-selected first-party record. At 250,000 it’s €4. Either of those are numbers a performance marketer would faint at. (Whether Swatch can lawfully do much with the data is a separate question with a GDPR-linked answer, and I’m not a lawyer; not legal advice, obviously.)

Anyway…

Nobody who wins the ballot will be melting this watch. Not one of the 1,969 will be melted for the money - in my opinion it will remain more valuable as an intact watch anyway.

Which of course means the 8.25 grams isn’t a store of value at all. It’s simply collateral for the story. Swatch used real Bloomberg-checkable metal so that you’ll believe the romance about 1969. The bottom line is that this is the most transparent hype product Swatch has ever made, because for once the gap between what you pay and what you get is literally printed on the dial and quoted on a Bloomberg screen. Swatch spent about a million euros of ‘forgone profit’ and for that money, they got a customer list, a slot in the global news cycle, and a new allocation system. Access turns out to have better margins than watches…

Cheap, at 8.25 grams a head, don’t you think?

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We’ve just covered how a company can spend about a million bucks buying itself a story, and get a bargain on it. To me, this raised the obvious next question: if a story can be bought cheaply in this industry, who exactly is paid to check the stories?

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Before you even begin to wonder, allow me to clarify that this post is not a paid promotion, and I have no commercial interest in this brand. I don’t own one of their watches, and I have not placed an order for a watch from 1776 Atelier.

How this post came to be was pretty simple. I read about their newest watch on several watch media pages, and then I sent Jason a bunch of questions. Several questions were intended to feel awkward, because I figured a new ‘American brand’ with a patriotic name and big finishing claims is exactly the sort of thing this newsletter exists to investigate.

I sh1t you not, Jason sent me back over 10,000 words; I figured this was either the behaviour of a man with something to hide behind all these words, or a man who has been waiting a long time for someone to ask. Having read through all of it more than a few times, I personally lean towards the latter, but I must caveat all of this by saying I have not held a watch from 1776 Atelier in my own hands. Perhaps that looks bad for now, but I got some really good images with labels from Jason to back up his claims - just wait and see.

Jason’s answers are quoted verbatim throughout (American spelling and all).

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Estimate reading time: ~24 minutes

I’ve always wanted to use the term dramatis personae, and now I have, and that’s what I will start with. 1776 is a two-man show. Jason Lu is a Texan, a mechanical engineer by education (with a minor in US history, of course), and until recently a technology executive who spent two decades running large manufacturing operations (often in turnaround and private-equity settings). He came to watchmaking as a collector first, restoring pocket watches as a hobby, and then crossed over from consumer to creator.

The other half is Zach Smith, a WOSTEP-trained watchmaker who owns Hour Precision in Ohio (one of the very few precision component suppliers in American watchmaking), with a background supporting machining for aerospace and biomedical customers, and a fleet of KERN mills to show for it. Smith became co-owner of the brand, and between the two of them they design, machine, finish, assemble, regulate, photograph, market and sell everything. Last year, per Jason, this two-person operation shipped well over 100 watches.

In our interview, I was mostly focused on Jason and 1776, and less focused on his team. We didn’t go into much detail about Zach, but I flagged this in my review and Jason sent me additional context on how he met Zach and how he views team selection. I decided to include it in full, because it does a great job highlighting how much Jason values Zach, and how important Zach is to the 1776 value proposition:

Their watches are named after presidential homes; Mount Vernon (a fully hand-engraved movement for under $7,500), Montpelier at $17,800, and now the Liberty 250. The last one is a 25-piece rose gold skeleton at $44,000, launched on 4 July 2026 for America’s 250th birthday, with a free-sprung balance made from American raw materials and a movement the brand describes, very deliberately, as “more than 90% manufactured in-house from raw American materials.” That quoted part is deliberate - to cover some legal requirements but we’ll get to those details a bit later.

Before we kick this off, let me frame this whole essay with one macro thought; 1776 Atelier has a foundational belief that finishing is the one claim in watchmaking you cannot fake, and the market still misprices it. You don’t have to agree with them just yet… you can make that call once you’re done reading this.

Loupe test

I opened with a sceptical question and asked, if a collector picks up your watch knowing nothing about the brand, what, physically, should convince them, and what separates it from a $2,000 watch with “hand-finished” in the description?

Jason’s answer was about eight paragraphs long, but the main line is this one:

He’s invoking quite the standard here. Most finishing is judged at reading distance; the loupe crowd typically goes up to 10x, maybe 20x. He’s volunteering 40x, at which point I’d imagine all possible excuses will die. Some of the specifics he rattles off seem easily checkable; two-piece hands with polished bushings and riveted construction rather than stamped blanks, 62 hand-finished internal angles on the dial alone, wheels machined not stamped, and then bevelled on both sides (the movement is openworked, so you see the gear train from both directions), every screw chamfered before the head is black polished and thermally coloured to plum instead of blue.1

Longtime readers know why this section matters to me; when we discussed The Hand-Finishing Fairy Tale, the argument was that “hand-finished” had become the most elastic phrase in the industry, stretched over everything from Dufour with his gentian wood to a polishing wheel bolted next to a CNC machine. So a brand whose entire pitch is around that same fairy tale phrase kinda deserves an interrogation. To Jason’s credit, he didn’t seem to flinch at any of it; in fact, I think he did better than I’d expected - and we will get to that in the taxonomy section.

No participation trophies

Jason is a self-taught watchmaker, in the sense that there is no ‘Swiss diploma’ on his wall. I asked him why anyone should trust the finishing judgement of a former technology executive without an apprenticeship.

To be fair, the self-taught label turns out to be only half true anyway. Jason spent years making repeated trips to Glashütte to work alongside Donat Kornagel of DK Precision, in what he calls an informal apprenticeship; Kornagel corrected everything from how he held a micromotor to his perlage, and helped him source tooling as well. The specialised grinding lathe 1776 uses for its solarisation grinding came out of the region, from a retired watchmaker at one of Glashütte’s historic manufactures. We can also add Philippe Narbel’s master finishing course on top of all that. So the training did happen in more than one way; it just doesn’t come with a certificate from a canton.

Also, touching on economics for a moment, watch movements are unusual among luxury goods in that a quality claim is fully inspectable by the customer. You cannot verify the provenance of the leather used in a handbag or the “in-house” content of most watches (without subpoena powers, anyway); but anglage under a loupe is a matter of public record. The information asymmetry that props up so much of luxury pricing (I’ve written about this in What you pay for when you buy a watch) goes away at 10x magnification. A brand that readily invites inspections under a loupe is voluntarily surrendering that asymmetry which many brands rely on. I suppose you could argue it is either confidence or foolishness - all I can say is at least this is testable, and an owner can quickly determine which one it is.

Dependent watchmakers

I asked whether he’d describe their work as in-house, hybrid, or something else - since the Liberty 250 is neither a modified ébauche nor a from-scratch calibre. He opened his answer with an anecdote I enjoyed, since it was related to a Romain Gauthier video we shot for The Escapement (totally unbeknownst to him!):

The Liberty 250’s movement keeps the architecture of the Unitas 6498, the pocket-watch calibre that half of independent watchmaking has used as a canvas at some point.2 Jason doesn’t apologise for this, and quotes Clausewitz at me instead (“the enemy of a good plan is the hope of a better plan”). His argument is that the gear train layout is the only thing that survives a comparison. The bridges, main plate, wheels (six spokes now, not five), free-sprung balance, crown and ratchet wheels, click system, screws, and even the bridge alignment pins, are made by the two of them, from American brass, steel and German silver bought as raw stock, ground flat in-house before a mill ever touches it.

If that wasn’t already impressive, Jason then described their development cadence. They control everything from raw material forward, they machine multiple iterations of a component in a single day, inspect under the microscope, refine, and cut the next version by the afternoon. They’ve evaluated different materials for the same part inside one working day. Anyone who has dealt with Swiss supplier lead times will recognise this as being close to science fiction. It’s also the best answer I’ve ever heard to the question of what America actually offers a watchmaker - note it has nothing to do with the flag! It must be lovely when nobody will make you wait four months for a barquette, or take 4-8 weeks off in the summer.

Many will already know their watch case is German - made by RP Uhrgehäuse. Andrew Cavanaugh’s coverage raised an eyebrow at that, and so I raised the same eyebrow to Jason:

He added, on priorities, “For us, the case frames the watch. The movement IS the watch.” I’m sure many would quibble with that perspective (a De Bethune owner might tell you the case is half the object), but as a resource-allocation statement from a two-man shop with a hard deadline, it’s pretty coherent. This is a version of the Spectrum of Independence argument; in-house as a binary concept was always a dead end. The question today is where a maker draws the line, and whether they’ll show you the line at all. Jason publishes his line items openly: sapphire crystals, jewels, mainsprings, and hairsprings are all bought in. Everything else is made in Texas and Ohio.

Forbidden labels

Why does the Liberty 250 say “more than 90% manufactured in-house from raw American materials” instead of “Made in USA”? Because the Federal Trade Commission (FTC) would like a word, that’s why. For an unqualified “Made in USA” claim, the FTC standard is that a product must be “all or virtually all” made in the United States - not just assembled there, or designed there, or have lots of value come from there. The parts themselves must be of US origin, more or less to the last one. Jason, who clearly enjoys this subject the way other people enjoy drinking beer:

Now compare this to the competition. “Swiss Made” requires 60% of manufacturing cost to be Swiss, plus a Swiss movement, casing and inspection. Canada offers a two-tier system (98% for “Product of Canada”, 51% for a qualified “Made in Canada”). The UK and most of the EU run on “substantial transformation,” which is lawyer-speak for it became the thing here, near enough. The American standard seems like the strictest country-of-origin bar in the world, and the penalties for faking it now run past $50,000 per violation, where every label, webpage and advert can count as its own violation.3

So here is the situation, and I’m sure you’ll find it as baffling as I did. A watch whose main plate, bridges, wheels, screws, hands and balance were cut from American raw stock, in America, by Americans, somehow can’t legally call itself Made in USA because of the Swiss mainspring and jewels? Meanwhile, as Cavanaugh points out, if the American standard were applied in Switzerland, even Rolex might not count, since its movements are made from German brass - and I’m sure everyone will agree this is moronic. And yet, an horde of “American” lifestyle brands with Asian supply chains wrap themselves in the flag every day, protected by absurd fact that the FTC really can’t chase everyone.

I asked Jason if the irony bothered him, and his answer is where the title of this essay came from:

In fact, he knew about the FTC standard before he named the company. This tells you how crazy he is. He chose the most scrutiny-attracting name available in American commerce, for a product category where the ‘made in’ label is legally difficult to pass - on purpose. This could go either way; this is either a guy who likes living life on hard mode, or the name was never about the ‘made in’ label at all (more on this later).

There’s a great epilogue to the question of claims made by watchmakers and brands. When Cavanaugh reviewed the Liberty 250, he didn’t take the brand’s “222 hand-finished internal angles” on faith; he counted them using DotDotGoose (an open-source tool built for counting birds in aerial photographs).4 The tally came to 230, meaning Jason and Zach under-claimed by eight angles. I have consumed maybe a decade of watch marketing in which every number is rounded up, and I cannot remember any occasion where someone fact-checked a watch brand and found their claims to be on the conservative side. Whatever else you take from this essay, I’d say that’s at least worth an approving nod.

“Hand-finished” handbook

I asked Jason to give readers a taxonomy of how the term “hand-finished” gets stretched in marketing - without naming names. He responded with a four-level classification system, which I suspect he had been carrying around fully formed, waiting for someone like me to ask. I have copied and pasted Jason’s exact response here so I don’t misrepresent or fumble his words. Jason and Zach kindly obliged when I asked for images to explain some of the terminology used these descriptions - thank you guys for preparing these images, I hope readers find them useful.

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Quick word of thanks to SuperlativeCommenter (sick name btw!):

Posting this on Hodinkee - organically - is such a kind gesture. Thank you!

If you’re new to SDC, welcome! When you have some time, check out prior editions of SDC Weekly here, or peruse the archive here.

In case you missed it last week:

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Estimated reading time: ~31 mins

🧐 Walt Odets

This was a man who once took a factory-fresh Rolex Explorer apart on his bench, photographed everything he found under magnification, and concluded that a fair retail price would be $600 to $800. At the time, this watch retailed for around $2,500, and this man published the photographs he took along with some highly controversial opinions.

“The anomalies of the Rolex Explorer make it difficult to neatly summarize a personal opinion. For me, the only intriguing aspect of this watch is that a movement so lacking is [sic] basic workmanship is capable of being so accurately timed. This is, no doubt, a product of the thickness (and thus permissible loose tolerances) of the movement, and the use of computer-timed balance/spring assemblies. For the person for whom accuracy of rate in a mechanical watch is the only criterion in buying a watch, and for whom value-for-the-dollar is of little concern, the Explorer might be a choice. In the current watch market, the poor quality of the movement–and relatively good quality of the case and dial–suggests that this watch should retail in the $600 to $800 range.”

Walt Odets passed away just over a week ago. He was 79, and if you have ever read a movement review that seemed to not skip over the shortcomings of any particular watch, that style of reviewing effectively descended from Odets. William Massena said in the New York Times profile of him last summer: “He set the template on how to review a watch and how to talk about watches on the internet” and “basically, we still live in Walt’s world.”1

Some background for newer readers… before Instagram, before Hodinkee, and long before this very newsletter, the watch internet was one site, TimeZone. This was a rudimentary forum that watchmaker Richard Paige bought in 1995. Walt bought 10% of it, because, he explained to the Times three decades later: “We’ve got to have content on here, otherwise we just have a group here, people blabbering back and forth.” So he wrote the content, at the leisurely pace of about 20 reviews a year, until Paige sold the site in late 1999. The best of Odets can still be found in a corner called the Horologium2 (”I was the mayor,” Paige said, “and he was the movie star of the site.”). He was not a journalist and he was not in the trade. He was actually a clinical psychologist in Berkeley who happened to own a watchmaker’s bench, a lathe, a microscope and a macro lens, and who would disassemble a watch (his own, Paige’s, or a willing collector’s; JLC was his favourite maker) the way the rest of us open a bag of crisps. Then he would tell everyone exactly what he found, in prose that sounded like a very entertaining autopsy report.

The Explorer review is the one that made him famous, or infamous, depending on which forum you grew up on. Paige bought the watch specifically for the review; he later admitted he saw a chance to “play P.T. Barnum.” It was split into two parts (one, two) in the late 1990s3, and if you’ve been reading SDC for a while, you might remember I linked to both parts way back in SDC Weekly 79. Even if you read it now, it’s surprising to see how he approached things, regardless of what the prose implied. He measured timekeeping and reported “excellent figures,” which from him probably meant a lot more than, say, a random YouTuber parroting such a phrase. The external parts got mixed marks… decent case, dial “cramped and busy,” lugs with “an unpleasant feel,” a bracelet he described as “an afterthought”… and then he opened the back and found unchamfered jewel holes with machining debris, a bridge screw so roughly finished that it gouged the plate the first time the factory installed it, brass shavings scattered through the movement, and perlage applied on top of surfaces nobody had bothered to finish. His verdict was: “the most crudely finished watch movement that I have ever personally examined.” A watch, he said, “of no horological interest whatsoever.”

That already sounds bleak, but what probably ground everyone’s gears the hardest at the time was this sentence:

“I cannot think of another consumer product in which the gulf between the publicly perceived quality and the reality I saw is as broad as with the Explorer.”

A guy who just wants to complain about a watch wouldn’t write that sentence. This sounded more like a psychologist measuring the distance between a brand and its product, and he used data to back up his claims. What followed was, in Paige’s words, “like a war.” Odets told the NYT he received about 100 emails and some even stooped to mocking his sexuality. Rolex called Paige and asked for Walt’s number, but Paige refused (”I’m not going to have them yell at him”). Entire rebuttal sites were created, honour was defended, the pile-on became its own piece of forum history.

The coda took years to arrive, but it did. One evening, long after, a Rolex employee smuggled him into a company facility in Los Angeles to look at the updated Explorer movements, with one condition: “Don’t say Walt, and don’t say Odets.” He examined them for about a quarter of an hour and concluded they “really were actually very good watches.” Eric Wind reckons Rolex moved to a faster upgrade schedule than planned because of Odets’ article, though as he says, “they probably would never admit that.” (The Times asked Rolex to comment on the review but Rolex declined.) Interviewed at 78, Odets was still cheerfully unrepentant about the original: “I mean, that was really a piece of junk.”

It would be easy to label him a Rolex hater, and plenty did just that. The record is funnier, though; asked in a 1999 forum debate whether Rolex used a Breguet overcoil (a hairspring with its outer end raised and curved inward, which keeps the spring breathing evenly and the rate consistent between positions), he conceded they did, in the calibre 3135, then added: “I don’t think of it as a watch.” Later in the same debate, a poster asked how the Rolex escapement stacked up against Patek’s and Lange’s; Odets accepted the design was sound and explained how Rolex could afford it: “They aren’t spending it on ANYTHING else.” You can call this snobbery if you like, but he owned the charge cheerfully; his beat was the top of the market, and he seems to have judged everything by whether the money you paid was actually in the object.4

That’s also why I think the whole Lange drama is more interesting than the Rolex story, though I think nobody outside the old forums remembers it. In November 1999, Peter Chong published the world’s first review of the Datograph, and Walt, who owned a few Langes himself, spent ten days on TimeZone arguing that the money spent on the watch only went as far as you could see through the caseback, and no further. He thought that behind the lavishly engraved top plate they used an under-engineered escapement and keyless works that, in his words, “could come from a mediocre watch.” The inconsistencies, he wrote, “divide the line between ‘show’ and ‘go.’” His summary: “They’re great watches, but they’re not completely honest.” And when a poster tried to summarise that into “Lange is dishonest,” he actually corrected them. He’d said there was an element of dishonesty about the watches… quite clearly a psychologist’s distinction if ever there was one. He essentially reviewed watches the way he’d assess a patient. What does this thing present itself as, what is it under the hood, and how big is the gap between the two?

Walt Whitman Odets was the son of the playwright Clifford Odets, orphaned by sixteen, raised partly in the household of Lee and Paula Strasberg, which means the family business was very literally the study of performance. He trained as a clinical psychologist and spent the late 1980s and 1990s doing serious, controversial work on the psychology of HIV-negative gay men during the AIDS epidemic. His 1995 book In the Shadow of the Epidemic made the New York Times’ notable books list; his Harper’s essay that same year argued that prevention campaigns were failing because they addressed how people ought to behave rather than what people truly felt. Do you see the connection? That essay was about public message versus the private reality which, if you think about it, is another type of gap. He spent most of his adult life, in both career and hobby, pointing out gaps.5

And if you want to know why watches, specifically, there’s some interesting data in this NYT article. On 30 November 1992, at precisely 10:22 pm, undertakers carried the body of his partner out of their Berkeley home. A week later his therapist asked how he knew the exact time, and he said: “because I looked at my watch.”

In the book, Mr. Odets wrote that he had looked at his watch because he “wanted to see something that was reliable, something that — unlike the human lives you loved and needed — could be trusted.”

That’s what a watch movement meant to him. Now if you go back and reread the Explorer review, when he talks about the gap between perceived quality and reality, you will notice it isn’t really about Rolex per se. To me, all he was doing there was checking whether the one thing that’s supposed to be trustworthy, was, in fact, trustworthy.

And the man could love, too. If the Explorer review is his infamous essay, his three days with a Lange Saxonia essay is probably his best. He begins lukewarm, at dinner with a retired-watchmaker friend, and falls for the thing in real time on the page. His Lange was “an anvil, a solid lump of a super-dense new element that ran right off the end of the periodic tables,” a watch with no charm and a “Wagnerian soul,” “a baby only an engineer-mother could love.” By day three he’s beaming back at the number 30 in the date window and closing with Oscar Wilde’s deathbed line about the wallpaper. That review was truly a psychologist’s self-report of desire overruling judgement, written by a man who knew precisely what was happening to him and was allowing it to happen anyway. Every essay about why we buy watches, including most of what I write here, also descended from that essay.

The trade knew what he was, even when the forums were burning him in effigy. Jeff Kingston, in a WatchTime interview, tells the story of meeting Jean-Claude Biver, then running Blancpain, who demanded: “Who is this Walt Odets? He is the only person who understood our 1185 chronograph movement, the only person. Who is this man?!?” Biver was still telling the story to the Times last summer: “He’s one of the rare people who spent some time to understand it.” Odets heard that Biver was “absolutely astonished that an American could understand a watch that well,” and found this hilarious; the 1185’s cleverness, he’d explain, was a vertical clutch (the chronograph engages by friction from above, like pressing two records together, instead of meshing a side-mounted gear that makes the seconds hand stutter). Then, for the rest of us: “They’re not the kind of movements you’d run over with a bus and they’d be fine, let me put it that way.”

He was, Lord knows, not always right, and not always kind. He could be imperious in debate; he read innocent questions as ambushes; in the Lange debate you will find the sentence “Your approach is rhetorical and sounds aggressive,” aimed at Peter Chong, who was asking about hairsprings. But then again, he definitely paid for every opinion with hard work. Before he told you the Explorer’s fourth wheel had cheap straight-cut teeth, he would have taken the wheel out and photographed it himself. Most modern reviews are powered by superlative adjectives; Odets powered his with disassembly and a camera. Nowadays we have more watch writing than ever before, yet almost none of it involves a screwdriver.

He also wrote one of my favourite autobiographical sentences in all of watch writing. Opening Tweaking the Mark XII, his account of swapping a fancier calibre into his IWC: “In the 1970’s, I was a pilot flying printing plates, bags of canceled checks, and the occasional dead body, also in a bag.” He earned $12 an hour doing it, wearing an Omega Seamaster his aunt gave him for graduating. No other hobbyist was writing like that, because no other hobbyist had lived like that.

Anyway, raise whatever you’re wearing on the wrist today. If it’s an Explorer, he’d have approved of the case, admired the rate, and told you to send him the movement. The gap between what a thing claims to be and what it is, will not close just because the man who measured it is gone. But hey, at least he handed us some callipers to measure it ourselves.

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🚦 Watch Signalling

The comments under SDC Weekly 154 were spectacular. You must read those if you missed them. They’ve given me plenty of food for thought, and today I wanted to pull on just one of the many threads exposed there. While everyone else argued about status, Captain of the good ship Curmudgeon (Hi, ) shared an observation that I thought deserved a section of its own. Rip came of age as a watch lover in the 1970s, and back then, he wrote:

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What Mellon didn’t know was that an art dealer named Joseph Duveen had booked the room directly below his. Duveen’s valet was told to befriend Mellon’s valet. Mellon’s valet, being the friendly sort, had told Duveen’s valet that his employer was about to head downstairs, and that he was headed to visit the National Gallery. Duveen’s valet, being well-tipped, told Duveen, who then timed his walk to the lift accordingly. When the doors opened on Duveen’s floor, Mellon was standing inside.

“How do you do, Mr Mellon?” he said. “I’m on my way to the National Gallery to look at some paintings.”

What an extraordinary coincidence… two men in a lift, off to look at the same paintings. Mr Mellon would soon learn they had remarkably similar tastes too, and they ‘discovered’ several shared interests as they wandered the museum together. Mellon was charmed. Hooked, in fact.

Over the following two decades Duveen sold Mellon a large proportion of the paintings he would eventually give to the American nation, and even the giving was Duveen’s idea; he urged him to donate everything, and build the National Gallery of Art in Washington around it. This might sound selfless until you realise that a national museum needs far more art than one man can own, and Mellon suddenly had many walls to fill… guess who had the inventory.

The ‘coincidence’ at the lift was, of course, choreographed to the second.

—

I listened to an entire podcast on Duveen1 and the longer I listened, the more I thought, “this could be the watch world.” Every move Duveen made, every tactic, every piece of psychological trickery… it all has a direct translation into how the upper end of the watch market operates today. The names may be different, and the objects have obviously changed, but the ‘choreography’ of the game has most definitely not changed one bit.

So today I want to walk you through Duveen’s approach and map it onto our world, because it clarifies how this hobby works at the very top. After that I want to do two things: one for the dealers reading this, who perhaps want to operate at a higher tier; and one for you, the collector, who wants to spot when somebody is ‘doing this’ to you.

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Estimated reading time: ~ 19 minutes

Genius has the fewest moving parts

Behrman opens his profile on Duveen with the entire business model in one sentence:

“Early in life, Duveen—who became Lord Duveen of Millbank before he died in 1939, at the age of sixty-nine—noticed that Europe had plenty of art and America had plenty of money, and his entire astonishing career was the product of that simple observation.”

This guy spent half a century moving pictures west across the Atlantic and got fabulously rich doing it. The equivalent in the watch world is that Switzerland, Germany, Japan, and a few other places make watches, and the people in the world with money, wherever they are, buy them. Wealth is portable, supply is constrained, and at the very top of this hobby, the interesting pools of money are in the gap between a master watchmaker’s bench in the Vallée de Joux and a vault in Geneva’s free port (the tax-free warehouse where expensive objects go to be owned rather than seen), or between Plan-les-Ouates and the Middle East.

All grey dealers, authorised dealers, auction house specialists, concierges, and WhatsApp middlemen… are all just iterations of Duveen’s basic premise, which was that the watches are over there, the money is over here, and somebody has to broker the trade.

Many people have tried this. Most fail; some do okay; a handful do very well. Only a tiny fraction could become Duveens, and they all do the same thing. They notice that the deals follow the relationships, so they collapse the entire operation onto maybe a dozen extraordinarily wealthy clients. That’s why Duveen’s strategy is insanely difficult to replicate.

It’s also the thing most people in the high-end watch trade screw up i.e., they focus on going wide. They build big Instagram followings, advertise discounts, and, more generally speaking, chase volume over value. The Duveens of the watch world go the other way. They get smaller, deeper, and much more selective; their client list would probably fit on an A4 page.

Monopoly was his method

Duveen’s main quirk was that he refused to be one of several dealers a client used - he wanted to be the dealer. To pull this off he did two things.

He controlled supply. He bought up entire collections, often paying more than anyone else was offering, and the paintings went into his own storage, not immediately onto the market. He understood, long before others did, that owning the inventory was the entire game. If you’ve got the inventory, you set the price, and you decide who gets to buy. If you don’t, you’re just waving a number in the air.

And he educated his clients. He made them believe that the only way to get the great stuff was by going through him. Other dealers might sell you something nice, but he would sell you something irreplaceable. “When you want a great painting, you must come to me, because you know I get the first chance at all of them.” Duveen said that to Henry Clay Frick, then one of the richest men in the world, who had just told him about a painting he’d failed to acquire. Duveen had already bought it.

The analogy isn’t perfect but if you think about it, the Rolex authorised dealer system, which I’ve written about before, is a franchised take on Duveen’s method. Rolex controls supply, the dealer controls allocation, and the dealer educates you, the buyer. Over months and years of buying things you don’t really want, you are taught that the only path to the thing you do want runs through the relationship. You can’t buy a Daytona… you need to earn one. So the watch is the carrot and the threat of losing your place in the queue is the stick. The dealer, like Duveen, is the gatekeeper, and having some sort of gate is the entire point of this setup.

The supply side capitulated as well; the dukes and barons of pre-war Europe (basically broke noblemen sitting on Old Master portraits) would watch Duveen arrive at their crumbling country ruins, look around with contempt for the pictures other dealers had been haggling over, and announce a price higher than anyone else had offered. “This is the greatest thing I ever saw. I will pay the biggest price you ever saw.” The dukes sold only to him after that, because once you’ve seen that kind of certainty, letting another dealer grind you down by 20% feels like a dumb thing to do.

It isn’t widespread yet, but some of the high-end watch trade already operates in this way. There are dealers who pay 200k for something the auction estimate capped at 140k, and no, they are not stupid. They are just buying control of the next deal. The next time anyone wants to talk about that reference, they own the comp (the comparable sale every future negotiation gets anchored to).2

Paying high for priceless stuff means you’re getting it cheap

This was Duveen’s cardinal dictum, and it’s the most useful idea in Behrman’s entire profile. There’s a story about a titled Englishwoman with a family portrait to sell. Duveen asks what she wants for it, and she says, meekly, £18k. Duveen is indignant.

“Eighteen thousand pounds for a picture of this quality? Ridiculous, my dear lady. Ridiculous.”

Then he starts extolling the virtues of the painting as if he were selling it, and finally, when she asks what he thinks it’s worth, he tells her the very least she should let it go for is £25k. Of course, she agrees. Now given he has just paid £7k more than the asking price, you might think he’s just an insane clown. But in fact, he did it on purpose, because he has already worked out what he’ll charge his American buyer, and that price doesn’t work if his cost basis seems too low. And of course, people do talk. This woman would then tell all her titled friends that Duveen paid her more than she asked, and the next broke family with a Gainsborough in the hallway would end up calling him first.

It’s easy to believe this is irrational, but it’s the most rational thing he did. Humans use price as a mental shortcut for quality, and Duveen knew it. A high price isn’t a tax on the object; at this end of the market, price is a signal that the object deserves the tax. The £18k painting was suspicious to Duveen because he couldn’t sell it for what it was worth if he’d paid that little for it.

The watch market is dripping in this dynamic. A ‘spare’ Daytona on Chrono24 at 30% below comp raises questions. Why is it cheap? What’s wrong with it? Why hasn’t someone else bought it already? And before you’ve even finished asking, you’ve talked yourself out of the deal, because in luxury - as in art, in wine, and in watches - the cheap thing is a suspicious thing. People pay more because, well, they get to say they paid more… the price is the proof.

Duveen executed this tactic on a massive scale in 1921, the same year he trapped Mellon in that lift. He bought Gainsborough’s The Blue Boy off the Duke of Westminster and sold it to Henry Huntington for the highest price ever paid for a painting at that point in time. Then he arranged a three-week ‘farewell exhibition’ at the National Gallery in London before shipping it to California. Ninety thousand people queued to say goodbye to a picture most of them had never once thought about, and Cole Porter even wrote a song mourning its departure. The painting was the same one all along, but the price made it the most famous picture in the world.

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If you’re new to SDC, welcome! When you have some time, check out prior editions of SDC Weekly here, or peruse the archive here.

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Estimated reading time: ~35 mins

In case you missed it last week:

🔨 How Watch Auctions Are Engineered to Make You Bid More

In 1989 an economist named Orley Ashenfelter went to a wine auction, and watched three identical lots of 1961 Château Palmer come up one after another. The first sold for £920. The second for £800. The third for £700. So for the same wine, just 90 or so seconds apart, the person who bought first, paid almost a third more than the person who simply waited for the subsequent lots.

Ashenfelter, being an economist, found this confusing. The law of one price (the idea that identical things should cost the same) had just been violated in front of his eyes, and, as he recorded, nobody else seemed to care. So he did what economists typically do, and gathered data on hundreds of pairs of identical wines sold in sequence across London, Chicago and San Francisco. As watch geeks you might have guessed that he found the same result nearly everywhere; when identical items are sold one after another, prices are about twice as likely to fall as to rise as you move down the list. He gave the pattern a name which has now stuck for a few decades: the afternoon effect.

I bring this up because of something Geoff Hess said in a recent interview with Johnny Davis. Hess is the global head of watches at Sotheby’s, and when Davis asked him how much of the job is psychology, Hess didn’t bother with any false modesty. “There’s a science to what we call ‘lotting’ a sale,” he said. 150 watches don’t go up in the order they arrived, or alphabetically, or by reference number; Hess says they are “placed.” There is, in his words, “a deliberate plan around where the crescendo should occur.” And then Hess said: “It really is like conducting an orchestra.”

Now, “conducting an orchestra” is the sort of thing a charming auction-house executive would say, and you could be forgiven for filing it under flattering self-mythology. I suppose in the auction world, this is the equivalent of a chef describing himself as an ‘artist’. But the more I thought about it, the more I wanted to dig into the research on this… so I did. Turns out there is a lot of peer-reviewed stuff out there, most of it written by people who have never even bid on a watch.

So today, we will learn a few things; how auctions are engineered, why the ‘crescendo’ should not fall on the last lot, and, believe it or not, how all this can explain what a colonoscopy and a charity gala have in common. 😂

Afternoon effect means the early bird overpays

We will kick off with Ashenfelter’s anomaly; why on earth would three identical wines decline in price over 90 seconds?

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Today’s report is a little different; MS recently published a “Foundation” report on Richemont which is intended to inform MS clients who might be thinking about buying Richemont shares. The analysts open the report with this paragraph:

I mean, this is hilarious false modesty because the paper is stuffed with estimates. As for SDC readers, the reason you might find it interesting is that Richemont does not publish brand-level numbers. They mostly report in three buckets (Jewellery Maisons, Specialist Watchmakers, and “Other”) and that’s that. They used to break out Montblanc but stopped in 2013.¹ So when you ask “how much money does IWC make?” or “is Jaeger-LeCoultre profitable?”, the answer has always been soething along the lines of nobody knows.

And I suppose even after reading this we still don’t ‘know’ anything for sure, but this report is MS’s best attempt at reverse-engineering those numbers. They are most likely wrong… but given these are estimates built from channel checks, export data, and 20 years of watching the company, it’s as good as we might get.

Not investment advice - obviously.

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Estimated reading time: ~18 minutes

Richemont is Cartier, Cartier is Richemont

If you’ve watched Ace Ventura, you’ll recognise the reference above… and if you haven’t, you must watch it ASAP but, I digress…

For the year to March 2026, MS estimates Cartier did about €11.2 billion of sales and ~€3.5 billion of operating profit - that’s a ~31% margin. Contrasting against the group, Cartier alone is roughly half of Richemont’s sales and about 77% of its operating profit (call it ~71% once you load it with its fair share of head-office costs); basically it’s one brand responsible for ~75% of the profit.

Then if we add Van Cleef & Arpels - ~€4.9bn of sales, ~€1.5bn of profit - these two together make up about 72% of group sales and more than 100% of group operating profit. “But wait”, I hear you say… “how can two brands earn more than 100% of the company’s profit?” Well it’s really simple… everything else, in aggregate, loses money (or close to it).

The watch division barely breaks even, the fashion-and-leather “Other” division has been loss-making for the better part of two decades, and head office burns roughly half a billion euros a year on top.2 In short, Cartier and Van Cleef earn the profits, and the rest of the empire just burns the lot like a billionaire’s deadbeat child might do.

You know how a holding company sometimes turns out to be one good business carrying a portfolio of shitters? One might argue Berkshire Hathaway is GEICO-and-friends, and a lot of media conglomerates are really one cable network funding a dozen vanity projects... heck, SpaceX is basically Starlink + AI dreams, right?

Well, Richemont is essentially a jewellery company (Cartier + Van Cleef) that happens to own eight watch brands, a German pen-maker, a French fashion house, and - I am not even making this up - an American golf-apparel label.

The jewellery is basically paying for a bunch of side-hobbies.

Specialist Watchmakers Division

Richemont’s “Specialist Watchmakers” division (does not include Cartier, whose watches are counted in Jewellery Maisons) did €3,149m of sales in FY26 and €107m of operating profit. That supposedly translates to a 3.4% operating margin. For context, this same division reached 27% margin at its peak back in FY13. It has fallen off a cliff in the last two years especially. After you allocate central costs, MS reckons the division’s true margin is something like 1.2%… on some of the most storied names in horology!

Vacheron Constantin makes up ~€966m (or ~31%) of this division’s sales; ~€134m of this is operating profit, which is actually ~125% of the whole division’s operating profit. Lange is the second-best earner, with a decent 13.6% margin on ~€257m of sales. And then… the rest make almost no money… except for IWC which actually loses money.

So what we see here is that some of the most storied names in watchmaking history - IWC, JLC, Panerai, Roger Dubuis and (on a good day) Piaget - are, on these estimates, together running at a loss inside one of the richest luxury groups on earth.

Taken together, they are not even “growing slowly” or “running below their potential”… they are outright losing money (I am taking them together, because if you add up the small operating profits, the IWC loss is still too large to be offset). If these were standalone companies, you would be reading headlines about restructuring, acquisition, or in the case of IWC, maybe even bankruptcy. But here, because they’re protected inside Richemont, the losses get absorbed by Love bracelets and nobody has to explain themselves on an earnings call.3

Data dump

Now let’s move on to the juicy numbers like volumes and average selling prices.

• Cartier: ~695,000 watches, ~€3.65bn of watch sales. That makes Cartier the #2 watch brand in the world by revenue, behind only Rolex and ahead of Omega. Isn’t it ironic that the biggest watch brand in Richemont isn’t even in the watch division? We already knew Cartier was the hero but seeing it laid out against the “specialist” watchmakers is something else.

• IWC: ~118,000 watches, ~€597m.

• Jaeger-LeCoultre: ~78,000 watches, ~€555m.

• Panerai: ~38,000, ~€330m.

• Piaget: ~30,000 (watches only), ~€372m total sales (Piaget is ~30% jewellery).

• Vacheron Constantin: low tens of thousands of units, ~€966m.

• A. Lange & Söhne: ~5,200 units, ~€257m.

When you calculate price per watch, you have to separate “what the brand books” from “what you pay at retail.”4 Roughly, Cartier books a bit over €5,000 per watch (retail closer to ~€7,500). IWC books a bit over €5,000 too (retail ~€7,800). Vacheron books something like €45,000 per watch - basically retail, since Vacheron sells a lot through its own boutiques now.

So in short, IWC sells ~118,000 watches to book ~€600m. Vacheron sells maybe a sixth of that volume to book ~€1bn. One brand is a volume business priced like an accessible-luxury name; the other is a scarcity business priced like a Patek alternative. Guess which one makes money? (Yes I know you already saw the table - Vacheron’s 13.9% margin versus IWC’s loss.) This is the the whole “high volume, low price, low margin” story in black and white.

And then there’s the pricing problem which makes sense to nobody - not even MS - and they flag it; that the entry price into Jaeger-LeCoultre (steel Reverso) is around €6,500, and the entry into Cartier (steel Tank Must) is around €3,500. JLC’s cheapest ‘serious’ watch is roughly double Cartier’s, and MS reckons this is “difficult to justify.” I’d agree.

In fact, I’d go even further; I’ve mentioned before, the watch industry has been abandoning the lower price points altogether and raising prices on the existing mix - if you keep squeezing the people who are already keen on the brand, and price out anyone new who might come through the door, nothing good is likely to happen. Cartier at least kept a foot in the door at ~€3,500 and it is now the #2 watch brand on earth. JLC priced its entry watch at double that, missed the sports-watch boom, struggles to sell their rectangular watches in China, and is now losing money. The Tank Must is kind of like a ‘recruiting tool’ for the brand, and the steel Reverso is more akin to a velvet rope outside an empty nightclub.

As you’d expect, only one of these strategies is working.

Why the watch division is dying

So why is the margin 3.4%?

First, fixed-costs are a bitch. Over two decades, Richemont vertically integrated its watch brands - that is, they were building movement and case manufacturing upstream, and buying up retail downstream. That’s essentially a high-fixed-cost setup, and it works well when sales are growing because you spread those high fixed costs over more units (operating leverage - the same thing which makes software companies so profitable at scale). But the division’s sales peaked around FY16 and have been flat-to-down in euros ever since. High fixed costs + flat sales = the whole thing runs in reverse, and your margin collapses. And hey, shocker, this is what the chart shows… 27% down to 3.4%.

Second comes down to the stores. Look at IWC; in FY16 it had 86 boutiques and did ~€700m. By FY26 it had 238 boutiques and did ~€600m. They nearly tripled the store count and revenue went down. Essentially, this speaks to a growth plan that never came true. (Montblanc is the same sort of thing; peak ~€980m in FY19, ~€760m today, loss-making, with a store count that blew up and is now being cut back.) MS suspects “high rental costs in prime locations and, in some cases, relatively low sales productivity.” In other words, they signed a lot of expensive leases on the assumption the watches would fly off the shelves, and then they didn’t.

Third is scale. The three big Swiss groups aren’t that different in total market share -Rolex ~34% incl Tudor, Richemont ~18%, Swatch ~16%. Ok, Rolex is running away with it, but with the group numbers it still looks respectable. But then, when you cosider brand share, the Rolex brand alone is ~33% of the entire Swiss watch market. None of Richemont’s watch brands, excluding Cartier, has a share above 3%.

This is the secret sauce I suppose; Rolex makes >30% margins because it makes over a million of essentially the same handful of watches, with all the purchasing power, manufacturing efficiency, and brand gravity that sort of scale will buy you. Richemont’s watch division is eight sub-scale brands in a trench coat, each carrying its own movement R&D, its own marketing, its own boutiques, its own everything. What’s worse, none are big enough to gain any meaningful operating leverage. A simple example is to consider the difference between one factory making a million widgets and eight workshops each making forty thousand; the unit economics won’t even get close.

This connects straight back to The Decay of Luxury Watchmaking and the “80% solution.” Everyone wanted the prestige of an in-house manufacture; everyone built the capacity; and now Richemont is sitting on a pile of sub-scale, vertically-integrated, high-fixed-cost watch brands in a market that’s polarising toward a handful of giants. The Big Four (Rolex, AP, Patek, RM) went from 37% of the market in 2019 to 51% in 2025. The rich got richer and the sub-scale heritage names got squeezed. Within Richemont itself, MS reckons only Vacheron and Cartier gained share over that period.

This is like musical chairs, and their watch division has eight brands fighting over one chair!

Iconic-line economy

MS estimates that at Cartier, the Love, Trinity, and Juste un Clou lines together generate more than 75% of the brand’s jewellery profits - with Love the single biggest contributor. Love, the bracelet you screw onto your wrist, is the biggest jewellery line in the world (over €1bn in sales), and MS estimates its gross margin exceeds 75%. But seriously, in general, Cartier is a monster of a business… just, wow:

At Van Cleef, it’s even more concentrated; the Alhambra line (bracelets that start around $4,000) accounts for about 60% of VC&A’s profits. The brand has been trying for 15 years to reduce its dependence on that one motif (the Perlée line launched in 2010) but it’s still less than 10% of profits. In the end, Van Cleef is, albeit profitably, a one-clover pony.

Both empires are built on the accessible lines, and not the high-jewellery showpieces. Van Cleef can sell you a high-jewellery necklace north of $1m - but the profit engine is the $4,000 Alhambra bracelet. The reason is that once a design becomes instantly recognisable, you’re no longer selling gold and stones, but recognition. A Love bracelet at >75% gross margin has nothing to do with the cost of material - these are priced off the fact that everyone at dinner knows exactly what it is and roughly what it cost. MS makes the point that jewellery, unlike handbags, can’t lean on logos and monograms, so a handful of brands solved the ‘recognition’ problem with iconic shapes instead - and in the age of Instagram, instant recognisability is all you really need.

Now apply that logic to watches; Cartier’s watch business works for the same reason its jewellery does! It has a few hyper-recognisable shapes (Tank, Crash, Santos, Ballon Bleu, Panthère) sold at accessible-to-mid prices, where you’re buying the silhouette, not the movement. Cartier “stopped trying to be a quasi-Patek a long time ago,” as I said before, it sells design, not horology… and it sells it cheaply enough to recruit new customers into the fold.

Now look at the loss-makers; these are brands trying to sell horology (movements, finishing, technical credibility) at high prices, to a market that wants to buy recognition. JLC has arguably the deepest technical bench in Switzerland and MS calls it “one of the industry’s most admired manufactures but arguably one of its most under-monetized.”

That is JLC’s problem at the end of the day; technical excellence is not what’s being monetised right now - recognisable shapes at accessible prices is apparently where it’s at. Cartier seems to have figured that out, and the other specialists are still selling stuff the market doesn’t seem to be willing to pay a premium for.

What’s working in watches

There’s a bright spot in the watch division, though. Under Louis Ferla (CEO 2017–2024), Vacheron went from ~€380m to over €1bn in revenue. Turns out, Ferla didn’t try to out-hype AP or Patek. All he did was sharpen their positioning around heritage, elegance and exclusivity, leaned hard into the Overseas as a Nautilus/Royal Oak alternative during the sports-watch boom, pushed pricing discipline using DTC boutiques, and drove the average selling price up by piling into high complications and unique pieces. By 2023 Vacheron was selling watches at an ASP near CHF 39,000, and revenue grew much faster than units. It’s the only Richemont watch brand besides Cartier to gain share over 2019–2025, and MS calls Ferla’s tenure “one of the most successful luxury watch brand transformations of the past decade.” So what did Richemont do with its best watch-brand operator? Made him CEO of Cartier in 2024.

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Alas… I’ve not been smoking anything. This is just a long overdue exercise which I think makes sense to kick off with an apology: To all …

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Lange fans rejoice… their next and final Lumen watch will be launched in 2028; it will be a Zeitwerk Minute Repeater! I’m also told we can expect a platinum Triple Split in September.

If you’re new to SDC, welcome! When you have some time, check out prior editions of SDC Weekly here, or peruse the archive here.

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Estimated reading time: ~34 mins

In case you missed it last week:

📊 Dynamic Pricing Revisited

If you have tried to buy a World Cup ticket this year, you already understand most of what I want to say about watch pricing, and let’s face it, you probably have the trauma to prove it.

FIFA took their ticketing platform in-house for 2026 and turned it into an Uber-for-football, in the sense that the price rises with demand. Reporting suggests 95 of the 104 matches saw a price increase, at an average of roughly 34%, with the cheapest ticket for the final starting north of two grand.1 Surge pricing, basically, is the same thing that makes Uber cost double when the train drivers are on strike. Shocker. I do get it, by the way; demand is there, the number of seats is finite, and so somebody was always going to collect that premium - usually it’s scalpers, and this time FIFA decided it might as well be… FIFA!

But it turns out, FIFA was too greedy. Demand for the less hyped group games was soft, and prices were too high to sell seats. But FIFA, being a body with around $3bn of ticket revenue riding on the idea that these things are ‘precious’, could not be seen to be cutting prices. A public price cut would have every fan who paid full whack demanding the difference back… with chargebacks and consumer-protection lawyers following close behind.2 So, allegedly, the unsold inventory started turning up in large blocks on StubHub and SeatGeek, below FIFA’s own published price, while the official site kept the original (higher) prices.3

Prices that only move up in public

With dynamic pricing in ‘prestige’ markets, the up-move and the down-move do not get equal treatment. In theory the price should float both ways but in reality, the rise happens openly and the fall happens in a hushed way - because dropping prices openly is an admission that the thing is worth less than you initially said it was, and the prestige probably won’t survive such an admission.

Airlines live with this happily, since nobody’s ego is bound up in a Tuesday fare to Faro. But luxury? They seemingly can’t afford to do this. The price itself is part of the product, so marking it down will not only cost you margin, it will inform everyone the magic has gone (as you know, economists call this a Veblen good). FIFA wanted to price like Uber and then realised it was more akin to Hermès… i.e. you can nudge prices up, but you get stuck there the moment you want to bring them back down.

What about watches?

You probably realise now, that the watch industry has been doing the same thing as FIFA for ages. It just happens slower, and perhaps with better manners for the most part.

First, there’s the annual price increases; every year the industry raises list prices a few percent, and the reason is almost always input-costs rising, Swiss franc strength, gold price rising, the tariff of the month, and so forth. To me, that is a special case of dynamic pricing; the price moves with inputs, which is the same thing a surge algorithm does, but this one only moves once or twice per year by committee - instead of once-per-minute decided by software. And of course, it only ever moves up not down. Other than a few exceptions like the Patek tariff adjustment and JLC, I cannot remember the last time a major brand sent a cheerful email announcing its watches would now cost X% less because demand had dropped.

When demand does decline, as it has done in the squeezed middle of this market for a couple years now, the brand still won’t cut prices. Instead, it lets the grey market do the cutting (and we covered examples of this via Wristcheck in a prior SDC Weekly). So your watch trades below retail on the secondary, the grey dealer sells with a markdown, and the brand keeps its list price high (and its hands clean). So just like with FIFA, the price dropped, but you were simply not allowed to watch it happen - and the loss landed on you and the grey dealer, but not the brand or watchmaker.

So when we ask whether watch brands ‘should’ adopt dynamic pricing, one could argue we are in fact asking a silly question… because they already have! More worthwhile questions might be “who pockets the difference?”, and “are consumers able to see it?”

This brings me to an interesting disagreement I had with someone who knows considerably more about this than I do; and he also has 20+ years of experience.

Max and I part ways

Max Büsser read my HM12 essay and during the course of a discussion that ensued we got onto this subject of pricing. His position, which he holds as more of a personal ethic, is that you should ‘treat people the way you would want to be treated’. He does not want fluctuating prices for two main reasons. First, if you were the customer, a moving price means you might buy at ‘the wrong moment’ and feel like you made a mistake. Second, he thinks it nudges watchmaking further toward a speculative, asset-mindset model, which is arguably bad for everyone.

I suppose this is at least an admirable perspective, and for what it’s worth I think it is half right. A stable retail price is undoubtedly a powerful anchor. It is the number you (as a consumer) measure ‘I did well’ or ‘I overpaid’ against, and taking it away does leave you slightly adrift at sea with every purchase. The behavioural economists would file Max’s worry under anticipated regret, and they would be right to do that. I respect the whole instinct… I am just not sure it is doing what Max thinks it does.

I mean, notice how fixed pricing does not actually delete one’s regret. If anything, the regret is just moved somewhere else. With a fixed price you still get to feel terrible, as the person who paid retail for a watch now worth half, or as the person who could not get allocated and paid triple to buy it off a flipper. The bad feeling was always somewhere. A moving price just changes who you are pissed off with… and the ironic part is we probably forgive the faceless flipper for charging the market price more quickly than we forgive the brand for charging the identical number - that’s likely because we have decided ‘the brand is supposed to be on our side.’ Max is, in effect, refusing to break that, and I respect the position - I just think the regret it saves is mostly being moved, NOT removed.

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Is it worth the money?

I didn’t even finish this essay before Tony Traina also threw his hat into the ring on the same subject… When a Watch Becomes a Trophy.

A £10 Casio keeps better time than anything with a tourbillon in it. If ‘worth it’ meant ‘good at telling the time’, the whole industry would have shut up shop in the 1970s and we would all be wearing F-91Ws or Casioaks. So I think it’s fair to say that all this agonising has little to do with ‘value’ in the functional sense. We are measuring something else, and we really suck at saying what that is.

So this essay is that… I’ll have a go at saying what.

What?1

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Estimated reading time: ~ 18 minutes

What your money buys

The price of a fine watch, when you boil it down, is mostly about belief. When you hand over large sums of cash for a steel watch, you are betting that a story about that watch (the craft, rarity, name, upside, whatever!) will carry on being told and carry on being believed, by you and by the people whose opinion is relevant to you. The price barely measures the watch at all. It is a measurement of belief, and of how well that belief holds up.

I read finance at university, and the world of finance has a word for a thing you put up to support claims you can’t fully back with cash - they call it collateral. Once you see a watch this way, the price stops being a number plucked from the ether; it’s simply a pile of collateral you’ve stacked up to justify the watch.

Some of that collateral is indeed real; borrowing ’s analogy, we’ll call it steak2. The movement is indeed thinner and better, and perhaps the finishing really did take a human eight days to, umm, finish. And yes, some of the collateral is pure signalling - we’ll call it sizzle. That sizzle is where the watch feels special, and the dial looks expensive, and the waitlist implies that smarter people than you already decided it was a good watch to buy for this price.

So that’s the first question to ask of any watch... How much of the price is steak, and how much is sizzle?

Not so long ago, I used to frame this perspective as value vs scarcity3 - a watch holds a premium when it gives you value you can feel and scarcity tight enough that you can’t find the same thing cheaper elsewhere. I still think that’s mostly correct - and we’ve already covered why scarcity works so well in How Scarcity Creates Desire (loss aversion, reactance, the Veblen logic that a costly signal is believable because it’s hard to fake). What’s changed now is that I’ve come round to seeing scarcity as just one kind of collateral among several.

The point I want to make today is how all the action has moved to a different kind of collateral altogether; it has nearly nothing to do with watches, and a lot to do with whether you can be made to believe.

You can’t taste either one

The elephant in this room is that you can’t inspect the steak. For years, what you might call ‘trusted signals of value’ were signs of work from human hands - finishing, sharp inner angles… some sort of evidence that a person suffered over the object. Turns out, that’s a signal most people can’t receive anymore. We covered this thread in The Hand-Finishing Fairy Tale; CNC machines now cut inner-angle radii too small for the naked eye, and EDM goes sharper still. So now, you aren’t evaluating the hand-finishing anymore, and instead, you’re believing a story about hand-finishing. Plus, the system seems to reward brands for telling that story as suggestively as possible but documenting as little of it as they can get away with.4

I’d encourage you to just stop and think about this for more than a moment, because it’s the foundation of the rest of this essay: you can’t evaluate the steak anymore. And it goes without saying that you can’t evaluate the sizzle, because the sizzle was always just a story. This means both halves which make up the price - what’s real, and the story - now reach you as stories you’ve chosen to believe. The steak is basically just a story you’re more confident in.

It’s belief most of the way down.5

Belief most of the way down

Guess what? Finance has a word for this too, and it just might be the most useful word I’ve found for what’s happening in the watch market right now. Rehypothecation6.

Relax, I’ll explain.

When you post collateral to a bank, you’d assume the bank just holds it - that they keep it safe, ready to seize only if your story falls apart. In practice the bank actually re-uses your posted collateral to underpin its own borrowing, and that gets pledged again, and again, down a chain, so that eventually the same single asset ends up backing five different claims at once. As long as everyone believes, this works just fine, and it’s rather efficient. But then a crunch comes, and everyone turns up to grab that one asset, and they find there was never as much at the bottom as there were claims stacked on top.

That is exactly the watch market today.

The steak - hand-work, finishing, whatever you’ve decided is valuable - gets posted as collateral for the price. But the steak is itself only believed, and never audited as such, so the same unverifiable story gets re-pledged to back the brand’s craft claims, and your confidence at resale, and the next buyer’s confidence after that. Everyone in the chain treats the same story as if it were a legit ‘real’ asset sitting in a vault. The trouble with a chain of collateral that has nothing solid at the bottom is that it works beautifully right up until the moment it doesn’t.

All of which raises the obvious question for anyone holding a watch, or thinking about buying one. When belief does get called, what survives, and who gets left holding the bag?

The answer raises a second question we should ask of any watch. And for illustrative purposes, we’ll use three examples - Naoya Hida, Laureato, and F.P. Journe.

Naoya Hida sells you sizzle, loud and clear

Jack Forster’s Naoya Hida essay is one of the most enjoyable case studies I have read in a long time; I’ll steal one short quote:

“What Naoya Hida gives you is desire, not reasons.”

Forster spells out how modest the actual watchmaking is across Naoya Hida’s standard watches. The base movement is a stripped-back Valjoux 7750 derivative - ‘workmanlike’ and reliable, but frankly, a bit basic. The dials are pantograph-traced and then hand-engraved and filled with cashew lacquer (fascinating thing, btw) rather than the urushi everyone assumes. There is, by Forster’s own reckoning, very little hand-work in a watch which retails for just over $20k.

And yet, Jack explains some of these are really gorgeous -“the rich, glossy depth of the numerals” - these are signals so good, Forster argues, that they skip past conscious analysis altogether. You go ‘wow’, and once you’ve gone ‘wow’ you pretty much stop caring about the rest. The ridiculous pusher placement on the QP, the mediocre movement, and the sparse finishing - all of it steps beside the point, because the ‘wow’ is what you paid for.

The first question we asked was how much of the price was real. The second question is, can you read it? What I mean by that is, with no expertise at all, do you actually understand what you're being sold? Let’s call this criteria ‘legibility’. The Naoya Hida is almost pure sizzle, but it’s legible sizzle as Forster eloquently laid out in his own way - the bottom line is, you can read it at a glance. Naoya Hida is essentially betting that the sizzle is so good that you will fall in love before FaceID has finished scanning your face to pay for it.

It should come as no surprsie that we have already covered the underlying psychology; I went into Berridge and Robinson’s work on wanting versus liking, where dopamine-driven wanting roars ahead and the liking system adapts behind it. This is a really important distinction to have clear in your mind: wanting is the ‘spike’; it is fragile and forward-leaning. Liking is the more subtle, durable pleasure in the object itself… which is what you’d have left once the spike fades away. Naoya Hida is selling to the wanting, and most people with finite budgets prefer to buy for the liking.

I should add… there is nothing dishonest in any of this. It is all closer to theatre than to being an outright con. The trouble, as Forster flags with his restaurant review example, is that over a long enough horizon there has to be some steak behind the sizzle - or at least there does when the hype cools and people start doing basic maths again.

Laureato is the opposite

Now let’s turn to Chris Hall’s Laureato review… At first glance it kinda looks like the exact inverse of the Naoya Hida. On paper, the new 39mm Laureato seems to post tangible collateral (meaning it’s not pure sizzle). The bevelling on the case and bracelet is thicker, the new Calibre replaces a movement architecture from 1998, and even Hall reckons it’s better-made than the 38mm it replaces. So sure, these are reasons, and GP has repriced the watch accordingly… from around £12,300 to £18,200, which is a jump of roughly 50% for what is, give or take a millimetre, the same proposition.

Read Hall’s review to the end, though, and the steak turns out to be a thin cut that’s poorly plated. The main ‘improvement’ is a mere nine-hour bump in power reserve… and then, there is no accuracy claim, no magnetic-resistance claim, and the baseplate proudly says “silicium escapement” which on inspection is a bit of jazz hands. Hall keeps reaching for some kind of logic behind the price and coming up empty. He ends up liking the watch, but “returning it without a pang.” Shocker.

So let’s ask our key questions about the two watches. Naoya Hida is mostly sizzle, but at least it has sizzle you can read instantly. The Laureato comes off worse on both counts - the steak is thin, and there’s nothing readable to cover for it. At least the Naoya Hida makes you go ‘wow’. As Hall mentions, “The Nautilus has its ears, the Royal Oak its bolt heads, the Overseas its toothy bezel… the Laureato needs it’s own ‘thing’, its little idiosyncrasy”. Indeed, it has no instant emotional ‘tell’ that says this object is special and worth the premium - and so, because the Laureato gives the market nothing to read, the only thing left to read is the price on the sticker.

What’s really holding up Journe?

Forster said it is the watch which commands a premium, not the brand. I mean, sure… the Royal Oak does well and the Code 11.59, from the same brand, does not. This is a good example of how legibility attaches to specific objects (and not to whole maisons or brands). Fine. But if that were true, you might say, then Journe would be a contradiction, right? Journe is a brand so insanely strong that even its ‘lesser’ references get hoovered up into the desirability vortex of the good models. The brand’s halo seems to boost the whole catalogue.

At first I thought Journe disproved the whole legibility idea… but I then realised it’s just the most extreme version of the idea I’ve got.

Consider what you’re buying with a so-called lesser Journe. Frankly, a lesser Journe is still wildly legible. Hype and secondary market value aside, you read ‘serious watchmaking’ and ‘unmistakably Journe’ off every model in a fraction of a second, with no expertise required. So for me, Journe was never selling illegible watches on hot air. Journe happens to be one rare brand that managed to stamp that legibility onto every reference. The halo is really just a lot of legible objects next to each other, and people now call it a brand effect.

Ultimately, this perspective rescues Forster’s take indirectly; instead of seeing it as ‘the watch, not the brand’ … it’s about legibility, wherever it happens to be. Usually you find this in one watch, and Journe happens to be the freak case where it lives in all the watches.

I’m sure eyes will be rolling here… “bullsh1t!” I hear you saying… “this has nothing to do with this legibility nonsense; people are buying all Journe models because of auction results and resale value.”

That line of reasoning is not the rebuttal you might think it is. It is actually my whole point! ‘Auction results and resale value’ is just the plain-English label for… you guessed it: the crowd’s belief.

Think about what your house is worth. Some of that number is the actual building - bricks, rooms, doors, carpets, and a roof that keeps the rain out. You own that outright and it barely moves. But a fat slice of the price is really just leaning on the place that sold three doors down last month for a record price. You didn’t lift a finger for that slice; it landed in your lap because a stranger overpaid nearby. On paper you got richer overnight - but your house is the same pile of bricks. And that slice you got through your new neighbour behaves like real money - you can borrow against it, you can brag about it - right up until the market turns, the sales in the area decline, and that slice disappears as fast as it arrived. The bricks never changed… but what did change, was the belief.

And Journe works the same way.

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—

A quick PSA for Genta fans… I was speaking to Alexia Genta, who told me something interesting:

“Dad famously said he didn’t like watches, that’s because his absolute passion was painting. To him watches were constraints, but painting was freedom… Every morning he designed watches, but he couldn’t wait for the end of the day so he could lose himself in the feeling of complete freedom that a blank canvas offered him. He always defined himself as an artist before anything else. My mission is not only to preserve his watchmaking legacy, but to help realise his deepest dream to be recognised as the great painter he was.”

And so… if you’re in London today, go check this out (register here):

If you’re new to SDC, welcome! When you have some time, check out prior editions of SDC Weekly here, or find enlightenment in the archive here.

Estimated reading time: ~34 mins

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In case you missed these last week:

🔁 Secondary Reinforcers

Every collector has some story about why they collect - be it craft, history, flexing, or whatever mix of these or other reasons they can come up with. Most of the time these stories are lovely, but almost all of them fall apart when we view them next to the person’s full collection… typically several watches, many of which haven’t been worn in ages and there’s another #NWA in the near future.

So, you’ve passed the point you would have called ‘enough’ a long time ago, and some part of you knows it. Why are you still, at 10am on a Thursday morning, refreshing Subdial’s new-arrivals page as though it’s a lottery draw? (Not an ad, lol!)

A reader (named ) left this interesting comment on SDC Weekly 149:

Today we’ll take Foresight up on the deep-dive idea.

What is a secondary reinforcer?

Psychologists split rewards into two buckets. A primary reinforcer is something your body wants with no instruction manual - so that’s things like food, water, warmth, sleep, etc. You were born, pre-loaded, to ‘care’ about these things. A secondary reinforcer is something that means nothing to you at birth and develops a ‘pull’ by being paired, over and over, with the primary stuff.

The canonical example of this is of course money. A banknote can’t feed you or help your sleep deprivation - but it still works because you’ve learned that it reliably converts into things that can. Status and praise are in the same bucket. Another good example is the clicker a dog trainer uses; it makes a click sound that means nothing to a puppy right up until it starts predicting a treat - after which the dog will happily work for the click alone.

This whole principle has two main origin stories, and both of these famous experiments date back to the late 1800s. Ivan Pavlov with his drooling dogs in the 1890s showed how a meaningless thing like a bell can gain ‘power’ by being paired, again and again, with something that does matter, like food (this is classical conditioning). Edward Thorndike, around the same time, showed using cats in homemade puzzle boxes that we repeat whatever gets rewarded (this is instrumental conditioning, which is the basis of operant conditioning). To quote from the link above:

“While classical conditioning depends on developing associations between events, Thorndike’s law established the basis for operant conditioning: learning from the consequences of our own behavior.”

A secondary reinforcer is what you get when you put these two findings together. The pairing gives a neutral thing some sort of value, Pavlov-style - and then you work and scheme to get it, Thorndike-style.

To put it another way, money is what you’ll find at the junction of the two most famous experiments in the history of psychology. B.F. Skinner turned up mid-century and put all of this into a type of system, with levers and pigeons and reinforcement schedules… but really, he was just laying floorboards over the foundations that were already decades old.

The best real-world proof that all this does work in practice was the token economy. In the 1960s, Teodoro Ayllon and Nathan Azrin ran psychiatric wards where patients earned little tokens for self-care, bed-making, work, and could swap those tokens for sweets, cigarettes, and other small privileges. The tokens ‘functioned like money’, which is basically the main point - a worthless disc can become a powerful motivator as soon as it ‘buys’ things you want1.

I guess that is Foresight’s instinct, and it’s a pretty good shout. When you look at us humans, a huge amount of what we grind for has no value in and of itself. We then chase the proxy because, somewhere down the line, the proxy buys the real thing. A watch is an expensive proxy after all… I mean, nobody’s stomach ever grumbled for a perpetual calendar, right? (I’m sure someone will argue this point!)

What doesn’t add up

All that being said, according to the theory, a secondary reinforcer that stops being cashed in for the real thing is supposed to stop working. So if a dog hears the click but never gets a treat, eventually it will do nothing when it hears the click. Trainers know this, and that’s why the general advice is to keep pairing the click with food at least some of the time - otherwise the click will become useless.

So the model predicts the chase should die down when the link breaks, and it should not carry on forever. This is awkward because unlike Foresight’s implication in his comment, “continue on regardless of the new consequences” is the opposite of what the theory says should happen.2

You might think this sinks the idea altogether, but the conditioning research has two good comebacks - which is basically why this is an SDC section and not a reply in the comments section.

Why the chase won’t die

The first comeback is that money is a special kind of secondary reinforcer - it is a generalised one, which was Skinner’s own term for it. Most learned rewards are tied to a single thing which fades when that thing stops paying out. Money is tied to nearly everything, so it pretty much never decouples from a primary reward, because you’re forever cashing some of it in for dinner. That means it can’t extinguish, because the pairing never ever stops. The same is true for status - it still ‘buys’ you tables, mates, deference, and a hearing, so the world keeps topping it up whether you asked it to or not.

The second comeback is that a behaviour lasts longest when the reward is unpredictable - this is the so-called variable-ratio schedule. A slot machine pays out after some random number of pulls, and that randomness is why people keep pulling through a losing streak. They never know if the next one is the one, so they can’t make themselves walk away. It is, as it happens, the single most extinction-proof pattern anyone has ever found.

With all that in mind, look at how you actually collect. You don’t land the grail every time you go looking, right? You get a dead lead, another dead lead, a near miss, and then, once in a long while, the right watch at the right price comes into your life and your whole nervous system lights up like the machine spitting out coins.

You are on a variable-ratio schedule!

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I include myself in this meme by the way; most of us are buying the costume, and I’ve written enough about self-deception to know the costume works well because we don’t tend to admit it’s a costume. Which is why it is rather disorienting to meet someone for whom the marketing copy feels like his personal diary.

I met the way you meet anyone these days, which is to say, in the Substack comment section 😂. We stayed in touch, and then I started following his photography (which is superb!). I then listened to some podcasts featuring him, and later his wife, and somewhere along the way a bigger picture about the man and his life came into focus (in escalating stages of disbelief, I might add).

First I learned he was a lawyer… no big deal. Then I learned he was the sort of lawyer who has lost only one trial, his first, in 1995. Then I learned he’d dived to the Titanic. Then, that he’d done it five times, and led the last expedition to visit the wreck with the Mir submersibles. I then learned that he led the expeditions that found and recovered the Apollo F-1 engines from the bottom of the Atlantic - I mean the actual engines that pushed men toward the Moon, on a project funded by Jeff Bezos. After that I discovered that he joined The Explorers Club in 1996 as one of the youngest members in the world, has held every office except President, and is currently its General Counsel (for the second time).

At some point in this sequence of learning about the man I took a break from thinking ‘wow, what an interesting guy’ and thought, ‘why the heck have I not interviewed him for SDC!?’

So I did.

What follows below is our exchange, lightly edited and grouped by theme. I’ve kept my interruptions to a minimum because, frankly, you will not want to hear from me on this occasion. But one warning before we start… this is not really an interview about watches per se, though watches do run all the way through the chat. I’d say this interview is mostly about what objects are for, and I’d argue David has better data on that question than almost anyone else I know in this hobby.

We will begin on the side of a mountain.

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Estimated reading time: ~ 27 mins

Going through it

DC: Actually, I was fully wrecked. I had a collapsed lung (again), pulmonary edema (on its way to pneumonia), cerebral edema (the most dangerous condition), retinal hemorrhages (which cleared soon enough) but, most importantly, a speech impediment, ataxia and significant memory loss. The doctors told me I had suffered the equivalent of a stroke and traumatic brain injury and, when I die and an autopsy is performed, my brain will show evidence of dead tissue and “mini-strokes” all over. This was a hell of a way to go into my 24th birthday.

The truth is, at that time, this was just another shitty card that I had been dealt in the game of life. It is hard to overstate the challenges I faced when growing up – no father, alcoholic mother, religious and economic intolerance, I started working at the age of 11, the most influential person in my life died when I was 16, no family or community to lean on, etc., etc. Despite this, I was the only person in my family to go to college, I paid for it myself, then I was in law school and, at the ripe old age of 23, I was faced with another significant challenge. Nobody was going to help me. The only way to get around the next challenge was to go through it. Fear was never part of the appeal. Resignation was part of my daily life. This was just another challenge I had to face.

Also, fear has never really been an issue for me. Fear is paralyzing. It keeps you from moving forward. I learned at an early age that fear does not serve me. The only things I am afraid of are something bad happening to the people I love, because I cannot control this. I am not afraid of the things that can happen to me. I believe I have the ability to just keep moving.

DC: I was already doing it. I started venturing into the wilderness at the age of 11, when I attended summer camp in New Hampshire. I went there until I was 14, then I toured Europe in a double-decker bus (London to Istanbul and back) when I was 15. EMS was just a continuation of the path I was on, plus the opportunity to buy gear at half price!

DC: It used to, but it does not anymore. The truth is, I take no satisfaction from winning a trial. That is what I am paid to do. The same goes for leading a major expedition. There is something I talk about with my peers that I call “The realization at the foot of the bed.” It’s the realization that comes on the last morning of an expedition that you have led, when the five or ten or 100 people you have led are dispersing to the winds and you have accomplished something really significant – a first in human history – and now it’s over. You are about to go home to your family and loved ones, maybe to the crush of the media, and now you are about to be on the other side. It’s over. You have achieved what you set out to achieve. When you are the leader, that place at the foot of the bed on the last day of an expedition, is a very lonely place to be.

The only people who understand what it feels like to be there and experience this loneliness are the people who have been there before in the same position. I have talked about this with Victor Vescovo, Don Walsh, Mensun Bound, Stockton Rush and others. We have all felt it, and we have privately confided in each other that the feeling is real. And, the reality is, you cannot reveal this to anyone but a peer, because the world does not accept this feeling of loneliness and resignation as an acceptable part of the “hero’s journey.”

But, yes. The feeling I get when I walk out of the courtroom after the jury delivers its verdict is very, very similar.

Stuff that works

SDC: Your whole philosophy is ‘I like stuff that works.’ Where does a mechanical watch fit in that, given it’s arguably the least functional thing you own? What’s it doing for you that your dive computer can’t?

DC: Not failing. A mechanical watch never shows you a blank screen. It does not fail to connect with another electronic device. It does not require charging. It allows you to navigate off the sun, orient yourself in the darkness, and help guide you to your destination, IN ADDITION TO telling you the time. It allows you to be untethered from the nanny devices we frequently rely upon. Have you ever lost wifi, even for an hour? Has this made you absolutely fall to pieces? A mechanical watch will never do this to you. It will not leave you in a lurch. It will not put you into harm’s way. On the contrary, it just may lead you out of harm’s way. It has for me, many times.

SDC: When you’re at the ocean floor looking at the Titanic, or coming up from a deep dive, is the watch on your wrist a tool, a talisman, or just along for the ride? Be honest, does it earn its place down there?

DC: It’s always a tool. When I am underwater, the watch guides me. It keeps me safe, keeps me out of trouble, and helps me accomplish what I am there to do. It only becomes a talisman or a piece of jewelry at the awards dinners long after the expeditions are over.

SDC: The titanium Yacht-Master. We both love this thing, and SDC readers will remember Mr Rehaut’s review of the 226627 as well as my own review. You waited about a year for yours. What made that the watch worth the wait for someone who’s handled the extreme end of dive kit?

DC: It is EXTREMELY functional. It’s light, easy to read, glows like a mother*cker at night, and it does not scream “ROLEX!!!!” It is rapidly eclipsing my GMT-Master II as my most favorite watch1.

SDC: You’ve got a deep love of Rolex and Omega specifically. Why those two? What did each of them get right that pulled you in and kept you?

DC: History, history, history. I love Rolex, but I don’t love Omega. I appreciate the simplicity and history of the VINTAGE Speedmaster. Otherwise, the Omega brand does nothing for me. As for Rolex, I love the history and universal functionality. I have worn a Rolex for more than 30 years. I cannot get used to looking at another watch on my wrist, unless it’s a vintage Speedmaster, and then only for about a day.

Fathers and sons

SDC: Of all the watches with stories attached, which one carries the most for you, and what happened while you were wearing it?

DC: My original Rolex Submariner, for the reasons I stated in my Substack piece “A boy and his father’s watch.” This was my first “real watch,” purchased with an early paycheck from my first “real job.” I noted the date when I learned our first child would be a boy, I timed my wife’s contractions when she was giving birth to our son and daughter, I wore it on numerous dives, including my first dives to the Titanic (aka, when I first “made it” as an explorer), and I passed it on to my son when he was old enough to appreciate it.

SDC: You’ve written about linking fathers’ watches to Arctic expeditions and the way both connect generations. Can you tell us the watch at the heart of that, and why a watch, rather than anything else, became the carrier for that connection?

DC: Rolex Explorer II. This is the quintessential polar exploration watch. The hardest thing to get used to in the polar regions is the light never changing throughout the day. In the Arctic, the sun never really goes up or down. It just goes around the sky at the same height above the horizon. That height dips incrementally lower every day as the season progresses. Not only can you not tell the time of day, but you cannot tell the direction you are headed without referring to the sun’s position in comparison to the watch hands. Hours turn into days as your circadian rhythm gets thrown away. It becomes dangerously disorienting.

The watch represents the passage of time, both daily and generationally. The photo [see below] shows Alexander Hillary’s Explorer II, my Explorer II and Sir Edmund Hillary’s Explorer II on the chart showing the way to the North Pole.

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Well, now we know.

The HM12 is a watch shaped like a robot’s head, which clips onto a 38cm, 15kg robot body made by L’Epée1. The watch has jumping hours and trailing minutes for eyes, a flying tourbillon for a brain, and a micro-rotor for a mouth. There is a crown on the left which deploys a set of coloured face shields, using a mechanism of more than 200 components (that has nothing to do with telling the time). The robot holds a loupe in one hand and a UV torch in the other, has a thermometer in its chest, and stores straps in a drawer within its base. 36 will be made in total, 12 each in blue, green and purple, and it’s priced at CHF 280,000 before VAT (or $384,000 in the US).

No doubt you have seen it already, because everyone covered it, and everyone covered it the same way... this is joyous, MB&F at its best, a creative adult is a child who survived, be glad it exists, blah blah. Hodinkee called it the robot and watch combo of your dreams. Revolution called it a covetable big boys’ toy. Deployant declared MB&F ‘untouchable’ with this sort of thing. The closest thing to criticism I have seen came from SJX, who pointed out, almost apologetically, that the face shields cover very little of the face and protect neither the tourbillon nor the exposed rotor - two bits you’d presumably want shielded in a battle? Haha.

First, the obvious lazy takes... The positive take is that it’s cool, we admire it, maybe we’ll get to see one in person someday. The negative take is that it’s a six-figure toy for 36 people, it’s irrelevant to essentially every collector alive (minus 36), and it will fade with the news cycle. Depending on how you see the world, both takes can be true, and I don’t think either one tells you very much.

The launch, on the other hand, tells you plenty.

Handover time

The HM12 is the first Horological Machine in the brand’s 20-year history conceived without Eric Giroud - the designer who shaped MB&F’s visual language from HM1 onwards. This one was designed by Maximilian Maertens, the former intern I wrote about in the context of Max’s succession planning. Max has said, in his own words, ‘I also recognised that he’s way more creative than me today.’

When I visited the M.A.D. House, one thing that struck me was how much of the operation is geared towards outliving Max. There’s robust product data management, incredibly detailed documentation systems, a backup person for many roles, and a project pipeline running out to 2034.

With that in mind, one perspective is that this is a succession announcement shaped like a robot. The flagship HM line which carries the lion’s share of MB&F’s identity, has been handed to the heir, in public, with the founder’s blessing - and it looks like the result is going to sell out in a heartbeat. Every founder-led independent faces the same existential question, which is whether the workshop can outlive the artisan. Journe collectors are super nervous about this even if they don’t talk about it openly. Voutilainen has restructured his whole company around this and there’s still no clear plan to replace him. Here, MB&F has answered the question using a press release that never once used the word succession.

And if you want to get poetic about it, consider what MB&F just launched... It’s called a guardian. A thing whose stated job is to protect something precious while its owner sleeps.

Make of that what you will :)

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If you’re new to SDC, welcome! When you have some time, check out prior editions of SDC Weekly here, or find enlightenment in the archive here.

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Estimated reading time: ~30 mins

🚀 The Escapement

Ever since The Escapement was announced, I have been getting the same two questions, over and over, in DMs and comments and WhatsApp groups. The first is ‘what actually is this thing?’ and the second is ‘how is it different from Watches and Wonders or Dubai Watch Week?’

These are fair questions, and with tickets going live imminently, I figured I should answer them to the best of my ability - once - instead of typing slightly different versions of the same reply into a dozen DMs.

For the avoidance of doubt: I co-founded this event, and I’m also its head of content. So asking me whether The Escapement is worth attending is roughly like asking Aurel Bacs if his title lot is worth buying. I will do my best to be useful anyway, and you can calibrate accordingly.

Who is “we”, anyway?

I figured I should cover this because “a few collectors decided to throw an arena event” might set off alarm bells (as it would for me too).

The founding team is split by design - half are seasoned watch enthusiasts, and half people who build large events for a living. On the collector side you’ve got names some of you will know: Anish, Horology Ancienne, myself, and a couple of others. On the production side, we have legit heavyweight experience. The three event leads have something like 75+ years between them running large-format consumer events, which includes arena takeovers, 35,000-person music festivals, that scale of stuff.

The bit that makes our economics work, though, is that one of our co-founders, Petr, owns a fabrication house that has built stands for the watch industry for over a decade (IWC, Montblanc, Hermès, Piaget and others, at Watches and Wonders and Basel before that). The same team has built Greubel Forsey boutiques in SoHo and Ginza. Because the fabricator is part of the event rather than being a vendor hired by it, we get our production at ‘cost’, with no chain of markups (from fabricator to agency to organiser). That’s the reason a brand can participate in our event for a fraction of what the equivalent would cost at other shows, and it’s the reason we could afford to cap brands instead of cramming the floor to pay the bills.

My point is that you can rest assured, this isn’t a group of enthusiasts winging it.

Who are watch events for?

Let’s start with my favourite Munger quote: ‘Show me the incentives, and I’ll show you the outcome.’ I think a useful exercise for understanding any event is to ask who pays for it, and who it needs to keep happy. Follow the money, and the experience will be self explanatory.

Watches and Wonders, for example, is a trade show. It exists so brands can present novelties to retailers and press, and the production budget (which is an eye-watering sum btw) is spent in service of that mission. Yes, they sell public tickets now, and the public days have grown, but when you attend as a collector, you are essentially a plus one in someone else’s show. The important meetings are happening behind frosted glass, the people you want to talk to are double-booked with Bucherer, and the whole machine would run exactly the same if you stayed at home. You can feel this when you’re there, in that It is mostly a B2B event that tolerates random collectors.

Dubai Watch Week is a different animal, and I genuinely love DWW; I’ve said publicly it’s the best ‘watch show’ in the world, and I stand by that description (for now, anyway!). You can touch the watches, talk to watchmakers, and it’s free! But it has two specific features worth noting... First, it’s run by a retailer, and a retailer’s incentives shape everything from which brands get prominence to how the floor is laid out. Mostly, this works out fine, but the curation logic is ultimately driven by commercial needs. Second, and this is the bigger one for you, it only happens every two years. This means that in the off-years, the collector community has... nothing. We are all dressed up with nowhere to go.

That particular gap is where The Escapement fits neatly. It is the same November weekend DWW occupied in 2025, fast-forwarded one year, and now in Abu Dhabi instead of Dubai.

So, what is it?

It’s a three-day event at Etihad Arena from 20-22 November 2026. Friday is for VIPs, media and industry. Saturday and Sunday are general admission with 10,000 tickets available across the weekend. We’ve also partnered with the city of Abu Dhabi and their various entities to really embed our event into their city’s events calendar (including their comedy festival, and their collectors’ week programming).

The brand list is capped at 50, even though the venue could physically hold more, so this was a deliberate choice and not a constraint; anyone who has trudged through a hall of 100+ exhibitors knows that past a certain point, more brands just means more noise and less of the stuff you do want to see. The brands we’ve curated run from accessible independents around 3-4K CHF all the way to pieces in the 300-400K range - Greubel Forsey, Biver, Rexhep Rexhepi, Daniel Roth, Gérald Genta, Czapek, Romain Gauthier, Ming, Simon Brette, Atelier Wen, Konstantin Chaykin, Louis Erard, Kollokium... you get the idea. These are brands we own, brands we have on order, brands we want to get to know better, or just brands which do cool things.

One more point people keep asking about... we have nothing to do with selling watches. We sell floor space and stage time to brands, and tickets to you, and that’s the entire business model. If we were taking a cut of watch sales, we’d be dealers running a dealer event, and the whole ‘for collectors, by collectors’ thing would be nonsense. How brands handle their own retail relationships in the region is none of our business.

The stage

This where I need to explain my own job… given I’ll be the one working with brands on this. The centrepiece of The Escapement is a stage - I mean an actual arena stage, anchoring the whole floor, with programming running across all three days. And the rule I’m enforcing as head of content is simple… there will be no brand representatives reading press releases you could read for yourself on Hodinkee.

A press release says the moonphase is accurate for 45 million years. It tells you the power reserve went from 60 to 72 hours. These are best described as ‘factoids’, and factoids are free; you can read them on your phone in bed. What you can’t get on your phone is the why. Why did anyone decide a 45-million-year moonphase was worth pursuing? What broke along the way? Who lost sleep over it? Those are stories, and stories are the entire reason any of us end up falling for particular watches. Nobody has ever justified a watch purchase solely with a spec sheet - people like us buy objects that mean something, and the meaning comes from the story attached to the object.

So yeah, that’s what the stage is for. Some brands will do grand keynotes, some will do something intimate and stripped back. Lang & Heyne, to give you a real example, wanted to launch a new watch for their 25th anniversary, and talk about what it took to create it, and the craftsmanship within it. We’re still working through the stage content so everything is still subject to change - but that’s the key difference with this event: we work with brands to create something we think will resonate with people like us.

We also have a separate stage which can keep folks entertained between brand segments. Here we will have things like fireside chats with collectors and panel discussions about hot topics like the hand finishing debate (btw, I’d welcome other suggestions). The panels will include and also be moderated by people from the community… and because we’re tied to no retailer and no publication, we can put whoever we want on that stage and discuss whatever we want. You’d be surprised how rare that is.

Nighttime

This is the part I’m perhaps most excited about, because it fixes my single biggest frustration with every watch event I’ve ever attended. The daytime experience at a good watch fair is fine, but the evenings are always fragmented. You’d typically have a hundred separate dinners and hotel-lobby gatherings scattered across a city, and you spend half your trip discovering the next morning that everyone you wanted to see was at the other thing. The community comes together for the day and then atomises every night, and nobody seems to question it.

So for our event, we kept everyone in the building. Each of the three nights, the arena will be transformed into an evening venue and the whole community experiences the same thing together. The VIP night is a gala with orchestral and cultural programming. The two general admission nights are, respectively, a comedy night with an A-list comedian (who is himself a watch collector), and closing ceremonies featuring a performance by an A-list musician. Names will be announced in due course, and no, I can’t say more yet (which is killing me, because these two shows alone would justify the ticket price!).

If you can’t make it

For those who can’t make it to Abu Dhabi… we’ve thought about you too. The daytime programme is being broadcast ‘professionally’ (includes a multi-camera production, a real director, on-screen graphics, hosts carrying the day, etc) by a team that has spent the past decade producing live broadcasts for some of the biggest streaming platforms on earth. Think of it like watching golf or F1; you have a lot of stuff going on in different places, and you need someone to share commentary as the director cuts to different cameras showing different scenes, and you need on-screen graphics to summarise what is going on in the shot you’re currently viewing - that’s what ‘professionally’ means (as opposed to a static camera just pointed as the stage or around the arena - that would be pointless!).

Plus, we’ve already started releasing a video series called The Road to The Escapement, where we’re visiting the participating brands and the people inside the ateliers. We’ve already shot several of these, including one where Romain Gauthier makes us fondue, which I mention purely because it’s the least press-release thing imaginable and that’s precisely the point. Rexhep’s video dropped last week, and hopefully by the time you’re reading this, we will have posted another (I think Luca Soprana, but can’t recall).

VIP versus GA

Actually, this is one other question I keep getting. A General Admission (GA) ticket gets you the weekend only; the full show, the stage programme, the activations, the comedy night and the closing performance. A VIP ticket gets you all of that too, plus the Friday, plus a dedicated VIP lounge inside the arena for all three days, and some exclusive content on the Friday. There’s also a VIP gala on Friday evening, and on all three nights the VIP tickets buy you front of stage seating as well.

The lounge is easy to explain; arenas are big, days are long, and having somewhere private to chill might be worth more to some than others. I guess more generally, it’s basically the same event with a different denominator. Only 1,000 VIP tickets will be sold, while the GA days are capped at 10,000. Same brands, same stands, same stage, same building... a tenth of the crowd.

If paying for fewer people sounds strange, consider that it’s arguably the purest luxury product there is. Most of what we call luxury is paying a premium for the absence of something… waiting, friction, queues, whatever. A first-class seat on a plane lands at the same time as economy; what you bought was space, comfort, and silence. So really, with a tenth of the crowd in the room, ‘absence’ ends up being ‘easier access’ to whatever is in the room.

There’s also one more thing, which I’ll share with the caveat that I really don’t know what shape it’ll take. Some brands have made it clear they want to look after the VIP group ‘properly’… call it a desire to serenade perhaps. What that means in practice will vary by brand and is still taking form, so I’m reporting the intent rather than promising any specifics. But if you think about it, the underlying logic is pretty sound; if you’re a brand and there are 1,000 of the most engaged collectors in the world under one roof, that’s a valuable captive audience.

None of this makes GA a ‘lesser’ product, to be clear. The weekend days are ‘the event as designed’, and they end each night with thousands of fellow collectors at a shared performance. Besides, the launch price for tickets are GA: 1600 AED ($435, £325) and VIP: 4400 AED ($1195, £895) so there’s too much value in the GA to say it’s a ‘lesser’ option. The VIP is just… more exclusive.

The way I’d frame this choice is that GA is for soaking in the show, and VIP is for longer private conversations; you’re optimising for depth, and paying for the smaller room in which depth can be achieved. Plus you get into the bigger room afterwards. You get both options, is the point.

Practical stuff

20-22 November 2026. Etihad Arena, Abu Dhabi. Saturday and Sunday are the ticketed general admission days; tickets go live on Monday 15 June at 5pm UAE time, and you can sign up for notifications on our website right now. Tickets will be sold via the Etihad Arena website (which you can also navigate to via the button on our website once it’s live). Oh, and in case you’re wondering, the arena handles all ticket sales, and they keep your money until after the event - so there’s no risk of a ‘Fyre festival’ situation; if the event doesn’t happen, they’re keeping your money safe.

Nobody has tried to put the watch community in an arena before, and first editions of anything involve a level of uncertainty that I’ve come to accept as the price of building something new. The team includes large-scale-event veterans, who have collectively launched massive events for the last 20 years… so I mean, we could not have chosen a better team! And what I can tell you is that every decision (brand cap, stage rules, shared evenings, broadcast, etc) was made by asking one question over and over... ‘what would we want?’

In November, we will find out whether we answered this correctly. I’d love for you to be in the room when we do.

Hope to see you in Abu Dhabi! ✌️

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The whole section in that old SDC edition was about how we, as enthusiasts, wear our watches ‘of the present’ on our wrists, and then use them to project ourselves into fantasy futures. “When I get the grail, then I’ll be satisfied” or other such ‘projections’ come to mind here; it’s as though the watch on your wrist isn’t telling you, sixty times per minute, that now is all there is.

Anyway, that post was mostly about not ignoring the present, and today’s post, sticking to the same theme, is more about forgetting the past. I say ‘same theme’ because both angles speak to the same idea, which is to lose your life without dying.

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Estimated reading time: ~15 minutes

Main question

At some point, which, for me, hit around mid-to-late-thirties, you will catch yourself asking a strange question: where did the time go?1

You might look at your kids and take in the fact that they’re suddenly not babies anymore. Or perhaps you will look at photos from 10 years ago and even though they feel like they were taken last year, apparently a whole decade has passed… while you were busy commuting, refreshing your email, going about your daily life and talking to strangers about watches on the internet.

By the way, this is not me ‘projecting’ my own experience on to everyone; this feeling is supposedly so ‘universal’ that psychologists have been studying it for well over a century. What they’ve found maps quite well onto how we experience (and waste) time as watch collectors… which was great to discover (in a cringe sort of way).

First we will go through some research, and then I want to try something with you; a little experiment we shall call a ‘Memory Audit’.

Why time disappears

There are three competing (but complementary) explanations for why time seems to speed up as you age. Each one builds on the other, and each one tells us something a bit different about the issue at hand.2

Proportional theory

The oldest explanation comes from French philosopher Paul Janet, who proposed in 1877 that we perceive time as a proportion of our total life lived3. When you’re only five years old, a single year is 20% of your entire existence, but when you’re 50, it’s just 2%. This causes the same 365 days to be experienced at what feels like a completely different speed for people at different ages.

This is sometimes called ‘log time’, and it’s probably the explanation most people have either heard before, or have intuitively worked out for themselves. The main issue I have with this theory is although it may well be intuitive to many, it is also more or less useless, because we can’t change basic maths. So just because we know this or realise it, doesn’t mean much since you can’t make yourself younger. So let’s move on to other stuff you can do something about.

Memory density hypothesis

In 1890, the American psychologist William James wrote in his book Principles of Psychology that time seems to speed up because adulthood brings fewer and fewer memorable events4. When you think about it, the passage of time for an average human tends to be measured by ‘firsts’ from the time they’re born… first smile, first step, first day at school, first date, first kiss, first car, first job, first wife (lol), first child, first watch... I mean, the list is endless. Anyway, as you age, the firsts tend to dry up, and the days and weeks, as James rather bleakly put it, “smooth themselves out… and the years grow hollow and collapse.”

Bizarrely, this general idea seems to have sat around for about a century before anyone tested it. In 2005, psychologists Marc Wittmann and Sandra Lehnhoff at Ludwig-Maximilian University Munich ran the first major study on subjective time across the entire adult lifespan5. They surveyed 499 people aged 14 to 94 and measured how fast they felt time was moving.

What they found was that for short intervals (hours, weeks, months) there was barely any difference between the perceptions of young people versus old people. Everyone apparently thought time was moving quickly. The ‘effect’ only really showed up when people were asked to reflect on how fast the previous decade had passed. In this case, the older you were, the more the last ten years felt like they had vanished; the effect seemed to peak at approximately age 506.

The mechanism goes something like this: your brain encodes ‘novel’ experiences into memory, but it skips over all the ‘routine’ ones. It’s easier to think of your brain like an editor with limited storage; it only keeps the scenes that are interesting enough to justify the hard drive space.

A first date is something your brain will save, but your 37th commute to work will likely get binned. The result of this is that when you look back on a period packed with novel events, it feels long because there’s plenty of mental footage to wade through. When you look back on a period filled with routine, there’s almost nothing there, which is why the decade just seems like a blur that whizzed by.

Claudia Hammond, a psychologist and BBC broadcaster, has called this the ‘holiday paradox’. I found this obscure reference and decided to include it because it is so relatable. A packed weekend away might feel quick while you’re living it (because you’re having tons of fun), but it also feels long in hindsight (because your brain stored lots of ‘new footage’). Now compare this to a routine month at the office and it can feel slow in the moments you’re living through it (because you’re kinda bored), but it then disappears completely from your memory… you can barely tell one Tuesday from another.

Neural processing theory

In 2019, Adrian Bejan, a professor of mechanical engineering at Duke University, offered a totally new angle grounded in physics instead of psychology7. As we get older, the neural pathways in our brains grow in size and complexity, but then they start to degrade - this means signals travel slower. The result is that the older brain literally processes fewer ‘mental images’ per unit of clock time.

A good analogy for this, is a video’s frame rate; when you’re young, your brain is running closer to ~120 frames per second, meaning every moment is rich and detailed. As you age, the frame rate drops off. Having fewer frames in the same amount of clock time will make the day feel shorter.

As Bejan put it, the young mind receives more images during one day than the same mind in old age, and this is supported by the observation that infants’ eyes move far more frequently than adults’ eyes i.e. they’re processing more visual information per second.

Plot twist

Very recently, Marc Wittmann (the same researcher from the 2005 study, now 20 years older himself) teamed up with researchers and tested 120 adults aged 20 to 91 across three countries8. The goal was to directly test whether time really does speed up because we store fewer memories as we age. This had always been the assumption, but nobody had actually checked.

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As part of the build up to The Escapement in Abu Dhabi this November, we’ve started a YouTube series called The Road to the Escapement. The latest episode features Rexhep Rexhepi talking about his new dong gong. If you haven’t already, subscribe to the Escapement’s YouTube channel to catch all the upcoming videos… I think Romain Gauthier is next. These are not primarily ‘marketing’ videos for the event at all; they were paid for by us, with the primary purpose of entertaining and informing collectors like you and I - so I really hope you enjoy them (feedback always welcome, of course). Tickets for the main event will be launching soon, so keep an eye out for those via the website.

Anyway, let’s start this edition with some wise words from one of my favourite thinkers:

Real artists do all the painting themselves, not like Rembrandt

Real artists use brushes, not technology like Cartier-Bresson

Real writers write it out by hand, not like Jack Kerouac

Real musicians record it live, not like Steely Dan

Real singers sing without processing, not like Kanye West and Daft Punk

Real directors do the prep without AI, not like Martin Scorsese

It turns out that real artists have always used technology. What they have in common is intent, responsibility, and the ability to create a feeling in the audience.

“Here, I made this.”

— Seth Godin

What about real watchmakers?

If you’re new to SDC, welcome! When you have some time, check out prior editions of SDC Weekly here, or find enlightenment in the archive here.

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Estimated reading time: ~35 mins

🐐 A Crazy Motherfvcker

Most collecting stories follow a similar arc... you want a watch, you can’t have the watch, but then you eventually get the watch, and then you feel slightly empty and start wanting a different watch. This is the hedonic treadmill in a nutshell, and most of us know full well it’s a treadmill, and we hop on anyway because the hunt is the real drug.

Then, every once in a while, someone’s treadmill leads somewhere interesting, and the watch turns out to have been a kind of door the whole time.

This is a story about a man you probably know as @nycwatchguy. Most of the internet files him under ‘meme guy’, and the memes are decent for sure, but there’s a lot more to the man. He is by any reasonable account a successful entrepreneur who runs a sports and entertainment fund, plays pickup basketball like a pro, and a huge cat lover. He once mounted a citywide search for a lost cat that, I’m pleased to report, ended happily. For the rest of this post I’ll call him V.

Now before we go any further, I will add that V is a friend of mine, and of course, we met through watches, as us watch people tend to do. I say this so that you know to read everything that follows knowing that I (mostly) like the guy. That said, I’ve tried to stay neutral mostly because a fawning profile would bore us both, and also because quite frankly, the story holds up fine without any help from me.

The reason I decided to write this section is because it’s a great example of a watch working as a ‘key’ instead of just a wrist ornament - this will become clearer as we go along.

Where it starts

V grew up middle class in India, surrounded by wealthier friends. The thing he wanted more than anything in the fourth grade was a Casio with a built-in TV remote, so he could change the channel on people from across the room. It cost about $100 back then, which in his house was serious money, and he never got the watch. He finds it funny now that he’d drop more than that on dinner without even thinking (I can confirm he does this frequently).

At university his dad bought him a $40 quartz Timex, which became his most prized possession. In his final year he had a professor which any of us might describe as a cvnt. He was a hedge fund guy parked in academia during an SEC probe, who handed V a ‘D-’ and was mighty proud of a watch V thinks was a Glashütte Original. V never said a word to him. ‘Wanted nothing to do with him,’ he said, and the watch only emerged in his memory years later, when he started wondering why he’d become quite so obsessed.1

V’s spark came around 2011; he saw a Zenith Academy Christophe Colomb, assumed Zenith must therefore be the summit of all watchmaking, couldn’t afford the $350,000 version, and fell instead for one very specific Zenith El Primero Chronomaster.

He hunted it pre-owned across New York for months and found nothing, then mapped every watch shop in Rome on holiday and dragged a long-suffering companion to all of them. On the way back to the hotel, defeated, he wandered into a jewellery store on a whim. An older woman pulled out a roll of trade-ins, and inside it was the exact watch he had been hunting for all along. He talked her down from around $4,500 to $3,500, ‘saying I didn’t have much money, which was true’, and walked out with no box, no papers, and what he still describes as a feeling of fate.

He’s never been back to Italy since.

A mythical object

V’s god is Michael Jordan, and I don’t mean this as a figure of speech. He met MJ as a 17-year-old at summer camp, and has spent his whole life idolising the man. So, when a serious collector in Chicago messaged him in early 2021 to confirm a rumour V had been wondering about for some time, it took him by surprise. The rumour was that Urwerk had made a small number of watches for members of Grove XXIII, Jordan’s famously private golf club. There were only twenty-three pieces, never publicised, NDAs for all buyers, that sort of thing.

The Chicago collector seems to have verified it the only way such things can be verified, which is to say he accosted a stranger at his local mini market who happened to be wearing one! V immediately rang everyone he knew with a Jordan connection, starting with Urwerk’s management, who would not confirm the watch existed and, I suppose promisingly, would not deny it either.

Roughly a year passed and he kinda lost hope. Then, over lunch in Miami one day, one of V’s own fund investors clocked the Urwerk UR-220 on his wrist and asked him, ‘what the fuck is that on your wrist?’ V explained Urwerk, mentioned the Grove edition he’d been hunting for a year, and the investor said, with nonchalance, ‘oh, you want me to call him for you?’

Call who?

‘MJ.’

Well, no sh1t… but V just assumed nothing would come of it. Two days later he was in the shower when the phone rang. Dripping, he answered. ‘Is this thing called the Urwerk Grove XXIII edition?’ Yes. ‘I talked to MJ and am connecting you to his guy.’ The guy did his diligence, researched V, researched his fund, and decided he was ‘a real dude and not some joker off the street’, and V, being V, rapped out his whole life story into the phone, including the hilarious ending ‘they will bury me one day in this watch.’ A chilly December day soon after this call, a package was handed to V at the St. Regis in midtown.

One of twenty-three had arrived.

How collectors lie to themselves

At this point I’d usually cue the violins... but V is rather unsentimental about what happened next.

Urwerk made a second version for MJ. Several of the original recipients, finding the brand too avant-garde for their taste or seeing profit, sold theirs. ‘Now like 6 of my friends have them and it ain’t really THAT special to have one any more,’ he admitted. The scarcity that made the watch magic, the twenty-three, members-only, unconfirmable-by-the-brand quality of it, leaked away, as scarcity tends to. The watch he thought was his end game became, in the cold light of a maturing market, a very cool watch that a handful of his mates also owned.

I find this framing pretty useful, because the thrill was never really in the metal itself, but in the impossibility of owning it. Once you remove the impossibility you’re left with the object, and the object, however epic, obeys the same emotional depreciation curve as everything else you’ve ever lusted after. ‘Everything wears off eventually, right?’

Never ask for money

So the watch lost a little of its shine... but the relationship it opened was the polar opposite.

For three years V kept Jordan’s people in the loop on his fund, sending quarterly updates and the odd deal, and mostly heard nothing. When he started raising his next fund, he sent a note that more or less said ‘everything I’ve built traces back to loving basketball, which traces back to one man, the amount is insignificant to me, I just want to be in business with you’. And again, he heard nothing… three months of nothing. His feeling at the time was: ‘Goddamn it, never ask for money!!!’

And then, a week before he was due to fly to Geneva (to collect some watches obviously), a reply came in. This led to a meeting at his New York office, at the end of which he was told that Jordan would like to invest in the fund. V says he damn near fainted. If that wasn’t enough, the guy asked what he was doing that night, because MJ was in town.

‘Bro, I’d cancel my own wedding if it was tonight.’

He showed up at a random building downtown and finally met the man he’d idolised his whole life - but this time, as a business partner. He talked far too much, and then pulled out his Akrivia AK-06 in steel, number 23, and showed Jordan how Rexhep Rexhepi had changed the ‘25’ to a ‘23’ on the power reserve scale, as a nod to the greatest of all time.2

V says Jordan looked at him and said, ‘you’re a crazy motherfvcker man.’

It gets better, still. Jordan, apparently taken with the whole saga, flew to Geneva to meet Rexhep himself, and stopped at Urwerk HQ to sign the wall on the way. ‘If you spot MJ with an Akrivia one day,’ V says, ‘I’m taking full credit for that shit.’

What happened here?

V’s own moral is ‘if you love something enough and put it out in the universe, it will happen for you.’ It’s a lovely sentiment perhaps, and I don’t especially want to be the guy who ruins it - but I do think the more interesting perspective is a little less woo-woo.

The universe did not deliver Michael Jordan at all. V’s track record did all the hard work. The reason the phone call worked in the first place is that when Jordan’s guy went looking, he found a legit fund run by someone far more serious than the meme account would suggest. The watch got V into the room, but after that, it was the unglamorous stuff which did the work. ‘Put it out in the universe’ is a nice post for Instagram. ‘Build something a billionaire’s people can underwrite in an afternoon’ is the underlying roadmap to this sort of outcome.

This, I think, is the real lesson to take away from the story... a watch can be a key, but the key will only open the right door if there’s something worth letting in on the other side of the door - that bit is up to you.

Behind the memes

None of the above tells us what kind of collector V actually is, so I asked him some other questions to offer you a quick tour. He seems rather clear-eyed, almost to the point of bluntness, about his own record. He traded in and out of Richard Milles every few months in 2017, treating them as silly toys - turns out, each one would now be worth a New York apartment. He waited three years for a Vacheron Overseas Skeleton Perpetual, decided it was the best modern watch the brand had made, and disliked it the moment it touched his wrist. Wrong proportions, no strap could save it, ‘an expensive ass mistake.’ He sold a Logical 1 for roughly $100,000 less than it would fetch today. He is, in other words, about as fallible as you and I.

He’s also weirdly principled about taste. ‘I’m the guy who decides what gets meme’d,’ he says, only half joking, and claims he’s never once bought or sold a watch because of what the internet was doing. His logic is that if he likes something it’ll get hot eventually, so he’d rather buy ahead of the noise. The low-key watch he’s most devoted to is a Nomos World Timer NYC Edition, which says ‘5th Ave’ on the dial in place of NYC; nobody on Instagram cares about it, but he says he’ll never sell that one. He bought it after someone at Wempe messaged to say they’d found one in the safe, and he ran down Fifth Avenue to get it. There’s a version of V that is still the broke kid fresh out of college who met Ben Clymer at a Nomos event and thought a $3,000 watch was end-game stuff.

The persona costs him, mind you. The running joke in the trade is that he’s the Medici of the watch world, patron to every emerging independent. The reality, he says, is that he feels the pressure to back makers he can’t always afford to back, that brands assume NYCWatchGuy can buy anything, and that he says ‘no’ far more often than people think. Being the audience is a job, the job has a budget, and the budget is apparently not infinite.

Underneath all of this, he’ll tell you, watches come second, believe it or not. Basketball is the first love… he describes two hours on the court as his only real meditation, the one place his phone and his stress vanish - and he means it literally. He has leapt off his sofa screaming at a Steph Curry shot more times than he can count, and never once at a Hodinkee release. Watches, by contrast, mostly cause him stress, because he lacks the bottomless bank account a lot of this hobby assumes - he claims every purchase ‘legitimately hurts’ (which I call bullsh1t on, but anyway).

What watches gave him that basketball couldn’t, was the people. Here’s a specific question and answer from my interview with V:

For the most part I have had nothing but incredible experiences with the watch community, which is not what you’d expect from a bunch of rich people. As my mother always said, if you don’t have something good to say about someone, don’t say anything at all, and so I won’t be naming any names here.

I will say that very very few people have truly disappointed me in the watch community but there have certainly been a few who tried to chummy up to me and made up all sorts of fabrications, only for me to find out they were all lies and I honestly don’t even know what the end game was. There are also people who have bad mouthed me to ADs, I can only imagine to try and win themselves favor and try and cut off my allocations. I don’t know who these people are, but hopefully they’ve found something better to do with their time.

On the other hand, back in 2021 I was approached by a young guy at the Phillips auction in NYC asking if I was NYCWatchGuy and he struck up a conversation with me. This happens all the time so I never think anything of it, but sort of rolled my eyes at the time being like oh boy, here we go again. A few weeks later he messaged me and asked me to lunch. Once again, I was like eh, who is this kid but fine, I’ll oblige.

Well, fast forward 5 years later and he’s become one of my closest friends, has been an invaluable resource to me in the business world, and I’m truly glad he came up to me that day to say hello. As they say - always say hello to the person next to you on the plane because you never know, and so while I’m an introvert and will never be the first one to say hello, I’m always secretly hoping the other person will because I’m more than happy to chat!

This brings the whole story full circle and I didn’t think this was the end game when I started writing it. V once said that if you took his watches away he wouldn’t much miss the objects, but losing the people would leave a hole he couldn’t fill. The Grove XXIII Urwerk began as the most special object he’d ever owned, but later it was less so, and this ended up proving his own point for him… meaning the object itself kinda faded, but the man it introduced him to, did not.

I guess that’s all watch collecting ever really is... we tell ourselves we’re chasing the object, and sometimes, if we’re lucky and a little unhinged, the object turns out to have been a way of getting to the people.

Or, as the greatest of all time apparently put it, crazy motherfvckers, the lot of us.

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🚗 Ferrari says please don't buy it

At one of the anticipated launches the company has made in years, Ferrari’s head of marketing asked its biggest fans not to buy it:

“To my petrolheads that I meet, I always tell them, please don’t buy [the Luce]”

Enrico Galliera

According to him, the buyer they’re targeting is someone who already owns an electric car. What the fvck? This is a strange thing to say given that in 2025, Ferrari shipped 13,640 cars, and historically, ~80% are sold to existing owners.

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