SDC Weekly 44; Inside Rolex; Common Knowledge
Rolex CEO loves a bit of banter, and may have a Nazi problem; Watch leaks, Subdial Market update and Watches & Wonders 2024
What is common knowledge, exactly? Do you have good watch habits? How can retailers benefit from long-term agreements with brands?
Hello 👋 and welcome back to the SDC Weekly. Today, you’ll find answers to the questions posed above, and you can catch up on the older editions of SDC Weekly here.
Small stuff
Rolex CEO on Watches and Wonders
We are expecting around 45,000 visitors from all over the world: people who work in watchmaking, journalists, collectors and watch enthusiasts. It is an important occasion for Geneva and Switzerland in general. We can show the world our specialities and explain what makes Switzerland special. The people who come are typically well-connected in their country's watch world. If they return from the fair with good memories, it is good for our country and the watch industry.
Jean-Frédéric Dufour, President of the Watches and Wonders Foundation and Rolex CEO
In yet another interview with a guy who rarely speaks publicly, this article (requires translation) covers an interview with the Rolex CEO where they discuss the upcoming Watches and Wonders watch fair in Geneva. According to him, the aim of W&W is to showcase the Swiss watch industry as a whole and position Geneva as the global hub for watches, much like Milan is for the furniture industry with the Salone del Mobile.
Dufour acknowledges 2024 will be a challenging year for the industry because of their cost base being in Swiss francs, rising raw material costs, and geopolitical uncertainty. He then also emphasises “well-known and successful brands” are still doing well, as they “sell dreams” rather than just products. Dufour dismisses the idea of watches as investments, stating, “I don't like it when people compare watches to stocks. We make products, not investments.”
Then, somewhat cheekily, he justifies his view of well-known brands doing well, by saying “This can also be seen in the fact that the resale value of these watches does not decrease.” Any reasonable person can see they “do well” because there are sufficient buyers who see these watches as investments, and all Dufour did here was underscore how closely they follow the secondary market.
Matthieu Humair is the CEO of the W&W foundation, and the guy responsible for making it happen along with his team of 30 people. He is also interviewed in the article, and covers a couple of points. First, in comparison to Baselworld, he reckons Geneva is logistically easier for visitors, and second, he says they have agreements with hotels not to fleece people too badly!
Geneva is much easier to reach than Basel thanks to the airport. In addition, we have prices under control, because we have direct agreements with the hotels, which was not the case in Basel.
Matthieu Humair
On pricing, they both explain how they’ve tried to improve the affordability of the event for smaller, independent watchmakers, who can access all the fair’s benefits for a relatively low cost. “As a small watch brand, you have access to all the dealers, journalists, and consumers for seven days for 45,000 to 80,000 francs,” he explains.
We reduced the prices as much as possible. Our system is also very Swiss: half of the brands pay for the other half. This is similar to the financial equalisation of the cantons.
Jean-Frédéric Dufour
The Board of Trustees for W&W consists of four members: Cartier, Patek Philippe, Richemont and Rolex - they alone decide which brands are allowed to participate. Dudour also addressed the fact that Cartier is owned by Richemont, saying: ”Funnily enough, Cartier, which is part of the Richemont Group, and the parent company don't always have the same opinion.”
Perhaps the funniest part of this interview was this response, when Dufour was asked what he thought about brands who aren’t officially participating in W&W, but are setting up shop around Geneva to meet and greet journalists and clients who have come to Geneva for W&W:
“We call them pirates. But that’s okay.”
Jean-Frédéric Dufour
Seems like a bit of a cvnty thing to say, given some of them applied to be a part of the main show, but were turned down… and as WatchPro put it, “It also feels at odds with a mission by the Watches and Wonders Foundation, a non-profit organisation, to be inclusive and supportive of the entire Swiss watch industry.”
Very fair points, but in my opinion, it was simply an inside joke directed at Swatch Group! Here’s the pirate flag outside Nick Hayek’s office - it has been there for ages - and it is something he is apparently known for… Seems to me, Dufour and Hayek have some bants!
Watch Leaks
On Sunday, Mike Tay posted the above text on Instagram - I disagreed with him:
Both posts are linked above, and the comments sections are a riot. In the case of Patek, I honestly think it worked in their favour - they had the news cycle pretty much to themselves for the entire weekend. The watches which were leaked seem underwhelming to most in the community anyway, so this is likely the maximum amount of discussion they will generate, and that’s because they would be lost in a sea of new releases once the rest of the brands start launching their novelties. What’s your take on leaks?
Laboratoire de Précision
Omega recently launched the Laboratoire de Précision (LdP), a new testing lab that's been given the official seal of approval by the Swiss Accreditation Service. They're making it available to any brand that wants to get their watches certified. Now, considering Contrôle Officiel Suisse Des Chronomètres (COSC) has been the go-to for watch accuracy certification for decades, this seems like a big deal. In fact, “COSC-certified” seems like standard-issue nerd speak.
Apparently Omega will take continuous measurements over the 15-day test period, while the current method takes measurements only once every 24 hours. This, they hope, will give brands and movement makers a much deeper understanding of how their watches perform, and this knowledge may prove to be an actual game-changer when it comes to improving wrist watch accuracy.
As watch enthusiasts, I think we should welcome this. It is exciting to see brands innovating and raising the bar. Sure, the average person might not get too worked up about a new testing lab, or accuracy measurement details, but for those of us who live and breathe watches, accuracy is a pretty big part of horology.
I am looking at you, as the torch-bearer for accuracy-pedantry.Subdial April Update
Subdial released their latest market report, and reckon the luxury watch market has been pretty chilled in the past month. Their Bloomberg Subdial Watch Index (BSWI - GBP) didn’t move much over the period, but there were some standout performers like Rolex’s Submariner “Starbucks” and GMT-Master II “Pepsi.” Conversely, the Rolex Daytona 16520 and 116528 took a bit of a hit.
They dig into what tends to happen with watch prices after they’re released at W&W and we’ve all seen this show before; At first, everyone goes crazy, and prices shoot up; then reality sets in, and prices usually come back down to earth as more of the watches hit the market and there is more liquidity… with supply and demand finding a sustainable balance.
They share some examples from previous W&W events, like the Rolex GMT-Master II “Sprite,” Daytona 126500LN, and Patek Philippe Calatrava 5226G. It’s cool to see how their prices changed over time, from the initial hype to where they are now.
One interesting point was their comparison of the Tudor Black Bay Pro and the Cartier Tank Must. They point out “the Cartier declined considerably faster than the Tudor,” and they think it might be because the Black Bay Pro was available right away - keeping people interested - while the Cartier had a delay between announcement and release, causing folks to lose interest.
Looking ahead to W&W, they share what may seem like obvious advice… “As excitement builds over the course of W&W, prices for the newest releases will skyrocket. Once they become more widely available, however, expect pre-owned prices for all but the most hyped releases to fall significantly over the next few months.” In other words, if you're in the market for one of these new watches, just wait it out.
All in all, a nice serving of data to underpin luxury watch pricing trends around big events like W&W.
The case for long-term ‘exclusive’ agreements between watch brands and retailers
In this article, Ariel Adams (the guy behind aBlogtoWatch) shares some thoughts on how watch brands and retailers can play nice together, particularly in the US market.
He explains, brands have a couple of options when they want to break into the US market or expand their presence there: 1) go at it alone and set up their own stores and marketing, or 2) partner up with retailers who will share in the profits and the costs.
Ariel points out there is serious tension between brands and retailers; Retailers are worried that the brands they’ve invested in will just leave them high and dry, especially if the brand ends up performing well (as a result of the retailer’s hard work in promoting it). Ariel puts it bluntly: “Retailers that perform too well can be as likely to lose an account as those that do poorly.”
Ariel suggests a “retail exclusivity lease.” Essentially, brands would agree to give retailers exclusive rights to sell their watches in a specific region for a set period of time (3-10 years). In return, retailers would promise to invest in a certain amount of inventory each year and spend money on marketing the brand.
The idea being, this would give retailers some security and incentive to really push the brand, without worrying the brand will just ditch them for a brand-owned boutique down the road. As for the brands, they’d get a guaranteed stream of wholesale income and some regional marketing muscle.
Ariel suggests this could be a game-changer for the US market, which he says “still has a lot of room to grow in terms of market presence and demographic interest development.” He acknowledges that brands probably don’t have the resources to tackle the whole country on their own, so working with local partners is actually essential.
He also puts the onus on retailers to demand such agreements from brands. “This really needs to be a retailer-led initiative,” he says, “because watch brands will naturally want to work with an agreement that offers them the maximum amount of flexibility and leeway.”
To me, this is just history repeating itself. Brands have long relied on retailers to shift watches, and the recent period of exceptional performance for watches has caused brand-egos to shift out of balance. The fastest way to whip these brands into shape is to form an industry alliance of retailers who can do some collective bargaining on behalf of all the retailers. Large outfits like the 1916 company could use their muscle, and smaller entities could benefit from that - whilst overall sharing the benefits of the collective bargaining in proportion to the retailer’s relative sizes.
Ariel’s view that this should be retailer-led and self-initiated seems less likely to work in the short term. In the longer term, if the brands all continue as they are without giving retailers confidence in their desire to have a long term relationship, I have no doubt we will start seeing retailers drop certain brands altogether. Great topic, though.
Enough small talk… Let’s dig in.
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👑 La Fabrique de l’excellence
A new book about Rolex has hit the shelves, and has apparently made waves in the French-speaking watch community. La Fabrique de l'excellence, by renowned watch industry historian Pierre-Yves Donzé, dives deep into what has made Rolex the powerhouse we know today.
Unfortunately the book isn't available in English yet, but a translation is apparently in the works. Still, the author of this article gives a rundown of what the book covers, what they appreciated about it, and what they felt was lacking.
Rolex is the most well-known watch brand, but the company is notoriously tight-lipped about its inner workings. Being owned by a private foundation, they don’t have to share their secrets, and that's where Donzé’s extensive research comes in. He’s seemingly pored over archives and pieced together Rolex’s history from its beginnings to the present day.
The book covers all the significant events in Rolex’s history, from the vision of its founder, Hans Wilsdorf, to the recent acquisition of their largest retailer, Bucherer. Donzé backs it all up with thorough research, as evidenced by his 607 footnotes!
One of those footnotes, however, has sparked significant controversy. There were allegations that Wilsdorf admired Hitler back in the day! The Hans Wilsdorf Foundation expressed surprise at this and is investigating the matter, but they don’t seem concerned. Rolex said in a statement: “The brand respect the work carried out by Pierre-Yves Donzé, a recognized expert in the field of watchmaking, for the seriousness and credibility of his work.”
The article’s author does have some critiques of the book. They feel Donzé doesn’t sufficiently highlight what makes Rolex watches so exceptional in terms of quality and craftsmanship. While the marketing is undoubtedly important, it is the watches themselves which earned Rolex the respect of collectors. The author felt the book lacked details on the design process, the philosophy behind their iconic models, and why Rolex remained committed to mechanical watches when the rest of the industry was going electric.
Overall, though, the article praises the book for its meticulous research, engaging writing style, and its appeal to watch enthusiasts. The only drawback, according to the author, is that it doesn’t quite satisfy the craving for more in-depth details on Rolex’s watchmaking process. How did they go about making strategic decisions? Why did they make the choices they did? None of this is answered.
My own view is that it is likely impossible to understand Rolex in as much detail as the article’s author would like to have seen in the book. Rolex are simply too secretive, and have no incentive to allow anyone such an unprecedented level of access. Still, I look forward to getting an English copy of the book when it launches.
💡 Common Knowledge
You have heard the term “common knowledge” - but do you truly understand it? This is a concept which affects the way we interact with others in a profound way, but most people have no idea just how nuanced it is. It might seem a bit tricky at first, but once you understand it, you’ll start seeing it everywhere!
Have you ever heard of the Muddy Children Problem? It happens to be one of the greatest logic puzzles of all time… and no, I am not being hyperbolic.
Imagine a bunch of kids in a classroom, sitting in a circle. Now, imagine two of them have mud on their foreheads - but they don’t know this. Everyone else can see the mud, but no one will point it out.
Now, the teacher asks a simple question: “If you know you have mud on your forehead, raise your hand.” The two muddied kids won’t raise their hands because even though everyone else can see the mud, the muddy kids themselves can’t see their own foreheads.
The teacher asks again, but still, no hands go up… So the teacher tries something different. She says to the whole class, “At least one of you has mud on your forehead.”
Suddenly, everything changes.
When the teacher asks the question again the first time, the muddy kids still don’t raise their hands; But when she asks a second time, both of their hands shoot up! Why?
What changes, is each muddy kid is thinking, “Wait a minute... if the other muddy kid didn't raise their hand the first time, that must mean there are two of us with muddy foreheads!”
It’s like a lightbulb goes on in their heads, and they realise they can figure out something about themselves by paying attention to what everyone else is doing.
This little game shows us something really important about how we communicate and share information. Even if everyone knows something, it might not be “common knowledge” until someone points it out. Once something becomes common knowledge, it can change the way we think and act.1
Here’s a video if my explanation didn’t suffice:
Now, this might seem like a silly example, but it actually applies to many real-life situations. Consider, when two people go on a date and one of them asks, “Hey, do you want to come up to my place for a drink?” They both know it’s not really about the drink, but they play along to avoid any awkwardness. Basically, despite knowing what “going up for a drink” entails - people don’t ask “Would you like to come up for intercourse” simply to avoid making their real intentions “common knowledge.” This allows for plausible deniability (which, itself, could have several motivations too).
Another area we could apply this is to think about how hard it can be for people to stand up against a bully, a bad leader, or even when many others disagree with them. Even when ‘everyone knows’ the bully is wrong, it is not common knowledge until someone speaks up. This can be scary, because the person who speaks up is taking a big risk regarding that knowledge being common (or not).
To make things even more interesting, imagine you and a friend are trying to guess the probability that a certain candidate will win an election. You both start with the same guess, but then you each go off and gather information on your own. When you come back and share what you’ve learned, you might have different guesses. The thing is, if you’re both rational, honest and good at reasoning, and you keep sharing information, eventually you must both arrive at the same guess!
This is called “Aumann’s Agreement Theorem” and it basically says two rational people with the same starting beliefs cannot agree to disagree. Here’s the full paper if you’re interested.
So how does this apply to watch collecting? As a watch collector, you’re always trying to make informed decisions about which watches to buy, sell, or hold onto. We all know the watch market can be tricky, because there is a ton of information out there, but not all of it is reliable. In fact, a lot of it is famously unreliable because it is being put out by people with ulterior motives.
One way common knowledge comes into play is in the pricing of watches. Maybe there is a particular watch you are interested in, and you’ve done your research and have determined it is worth a certain amount. Then you go to a watch forum or a collectors’ meet-up, and you find out everyone else seems to think the watch is worth a lot more (or less). Suddenly, the common knowledge about the value of the watch has changed, and you might feel pressure to adjust your own valuation.
But here’s the thing: just because something becomes common knowledge does not necessarily mean it is true. Maybe all those other collectors are basing their opinions on incomplete information or flawed reasoning. Or maybe they’re just caught up in the hype of a particular brand or model. Or maybe the watch meet-up was filled with too many dealers who hold that piece in stock, and are therefore incentivised to price it higher. Who knows. It is up to you, the collector, to find out for yourself.
As a collector, it is important to be aware of these social dynamics and to think critically about the information you’re getting. Just because everyone else seems to believe something doesn’t mean you have to go along with it. If you do your own research and come to a different conclusion, don’t be afraid to speak up and share your perspective. You might just be the one to challenge the common knowledge and help other collectors see things in a new light.
Another way common knowledge can affect watch collecting is in the way certain brands or models become popular or prestigious. Maybe there’s a particular watch which is seen as a status symbol or a must-have for ‘serious’ collectors2. But how did it get that reputation? Is it because of the intrinsic quality of the watch, or is it just because enough people started talking about it and hyping it up until it became common knowledge, that it became so desirable?
As a collector, it is always worth asking these questions and thinking critically about the factors which influence your own tastes and preferences. Are you drawn to certain watches because you genuinely appreciate their design and craftsmanship, or is it because you’ve been swayed by the opinions of others?
I am not saying there is anything inherently wrong with being influenced by the watch community and learning from the knowledge and experience of other collectors. In fact, that is one of the great things about our hobby - the opportunity to connect with others who share your passion and to learn from their perspectives.
However, at the end of the day, your collection should reflect your own personal taste and values, not just what collectors consider to be common knowledge. Don’t be afraid to go against the grain and champion watches or brands you believe in, even if they are not the most popular or prestigious.
If you do eventually find yourself in a disagreement with another collector, don’t forget Aumann’s Agreement Theorem! Try to find common ground, and be willing to update your beliefs if/when the other person makes a convincing case. Who knows - you might just learn something new and deepen your appreciation for something you previously hated.
📌 Links of interest
🟢 Unsustainable: are watchmakers backtracking on green initiatives?
💹 Only Watch charity auction rescheduled for May.
😇 Journe launch: élégante by F.P.Journe 10th Anniversary: Gino’s Dream - Not my kind of watch, but having bought my favourite watch from Gino, and considering what he meant to a dear friend of mine, this was special to see.
🕵️♀️ The new issue of Europastar magazine is out, and they have a section on dials worth checking out (p32 onwards).
💎 Unique in Every Way: The Father And Son Behind Horology Ancienne on Two Exceptional Minute Repeaters.
🤖 Apple Reportedly Exploring Personal Home Robots.
🚶♀️ A study suggests that walking not only boosts your mood but also significantly enhances creativity.
🚕 Elon Musk announced that Tesla will be unveiling its first Robotaxi on August 8th later this year.
⭐ This Bloomberg piece on Sam Bankman-Fried is a good summary about just how corrupt the infamous FTX CEO was.
⏳ 15 Methods to Master Your Time.
🏯 Will everyone in Japan have the same last name by 2531?
💊 Should you take a multivitamin? Here’s what the science says. (No paywall)
✈ Easily compare pros and cons of every airline, airport, and aircraft with this tool.
👨✈️ How going deep on aviation disasters helped cure a fear of flying.
😇 José Andrés is speaking out after an Israeli strike killed seven aid workers from his World Central Kitchen charity who were delivering food in Gaza.
End note
In case you missed it… here’s a fun post from last week:
Watches & Wonders may have kicked off in Geneva yesterday, but I am over 12,000km away in Johannesburg, South Africa. I will probably talk more about W&W next week, once the event is concluded, but felt I couldn’t ignore it entirely! So, in no particular order, I will cover a few of the highlights for me thus far.
Patek Philippe leaks initially left even the most die-hard Patek fans extremely pleased - not because the releases were fantastic, but because they were so unimpressed by the novelties they felt happy to not want anything and instead, save some money for a change.
Then, Patek dropped some astoundingly beautiful novelties in their Rare Handcrafts Exhibition - @horology_ancienne posted images on their Instagram stories - I’ve asked if they could create a highlight, so check out their page to see if it is still there.
Bulgari has done it again, beating their own record of 1.80 mm thickness to produce a mechanical watch that is only 1.70 mm thick. Some collectors argue this is 'cheating’ since the hands aren’t stacked - and once can only imagine how irritating it would be for those who bought last year’s model - but hey, if you have £500k to waste….
Tudor seems to enjoy giving the people what they ask for… suspect this BB58 GMT will be a huge hit for the brand. Not sure I like the touches of gilt/gold but I can see this being a decent seller - it will definitely cannibalise BB GMT sales, because it is smaller and thinner.
The Rolex 1908 in platinum seems like a useful ‘relationship starter’ for a new client at an authorised dealer. Previously, the Cellini line would score you brownie points and help build spend history for those pursuing more desirable models; but nobody liked the Cellini, so it was effectively money wasted. This model actually seems okay - and for 30k, you’re getting a platinum Rolex with an engine turned dial, which doesn’t look too bad at all.
I’ll just quote Monochrome on this one: Capable of accounting for centurial years, IWC’s Eternal Calendar is equipped with a 400-year gear designed to skip three leap years over four centuries. This quantum leap allows it to calculate the leap year correctly until 3999 because, as IWC’s press release states, “it has not yet been officially decided whether the year 4000 will be a leap year or not.”
I thought that was pretty cool - and that isn’t all… Their moon phase will deviate from the moon’s orbit by only one day after 45 million years - they have even applied for a nomination in the Guinness World Book of Records! I have always liked the Klaus QP layout, so it is unsurprising I like this watch - the technical geekery under the hood made it stand out for me as one worth mentioning. Do read the Monochrome link above if you get a chance.
I could go on, but decided to end it here and save any further thoughts for next week’s edition.
Until then, enjoy the rest of W&W!
F
🔮Bonus link: Patek Philippe's Thierry Stern on Minute Repeaters
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Strong Emperor’s New Clothes vibe from this example too.
Whatever the fvck that means.
I think I've developed Cayce Pollard syndrome when it comes to Tudor. Queasy and uncomfortable. The IWC is of course technically very cool, but its also a nice looking watch in a reasonable size given its complication. It should probably take "best of show". The thin stuff from Piaget and Bulgari are also cool, but do the owners of those pieces actually wear them? I'll comment with my favorite next week, need to think on it a bit more.
For awhile I was starting my day with a walk/hike around my neighborhood which involves a bit of nature and a lot of stairs. I have not been able to do it these past few months and I can really feel it. I need to figure out how to get that going again.
I rather enjoyed some delayed gratification in reading two weeks back to back, probably won't have the discipline to to that by choice though. Thanks again!
Another good one!
I’m constantly fascinated by the “theorems”, “puzzles” “problems” and other terms for studies that have been done and names for psychological paradoxes, etc that you seem to dig up!
Also another enjoyable and well deserved interview of Sam and father! 👍🏼🫡🫶🏼☝🏼the “class act of Instagram” and a couple very humble and sharing collectors