SDC Weekly 37; Swiss Watch Industry Update; Simplification; Piaget Polo 79

AI Video, Duḥkha, Antikythera Mechanism, Wang Chuanfu, SpaceX, and the Patek 565A Freccero “Acuatic”

Feb 21, 2024

How can you buy a Roger Smith watch very quickly? Are you guilty of asking stupid questions as a watch collector? What’s the final word on the new Piaget Polo 79? What does duḥkha refer to? What is the Antikythera Mechanism?

Hello 👋 and welcome back to the SDC Weekly. Today, you’ll find answers to the questions posed above. In case you missed one, take a look through previous editions of SDC Weekly here.

Guess what? You can now buy a watch from Roger W. Smith and take delivery immediately. Ok, I’m exaggerating. As Chairman of the Alliance of British Watch and Clock Makers, Roger has created a one-off piece to support its first major live event, British Watchmakers’ Day. The reserve price is an eye-watering £297,500 (excl. VAT), and it is being sold through a closed bid auction directly with the company. Just email them your bid, and apparently “The highest valid bid for the Series 1 special edition as determined by Roger W. Smith Ltd, will be declared the winning bid.”

In summary, there’s no oversight to this ‘auction’ process, Roger remains woefully misguided with his pricing decisions, and you probably can’t buy one if Roger doesn’t feel like you’re a worthy bidder… even if you’re willing to pay the highest price. Am I being too cynical?

The Series 1 — “I’ve been asked several times whether there’s a mark identifying this watch as a special edition for British Watchmakers’ Day. Although numbered as the Series 1 ‘No.32’, the irony is that it’s distinguished by having not a single mark or change to my original design.” - **Roger W. Smith**

Talking about auctions… If you think Roger Smith does some strange things… you ain’t seen nothin’ yet! Christie’s was planning to auction off the tattooed skin of an Austrian performance artist, but the auction was cancelled because all 12 pieces of skin were bought by a Swiss collector for “a seven-figure sum” ahead of the event. The page is now deleted, but here’s how Christie’s site described the auction:

“the auction thus offers a unique opportunity to acquire a significant piece of art history’s future, as this is the first time an artist has sold his real body as a work of art during his lifetime”

Three words: What. The. Fvck ?

Anyway, let’s dig in.

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Swiss Watch Industry - January report

The Federation of the Swiss Watch Industry posted their January report yesterday, and

Andy Hoffman

posted his article covering it within about 90 seconds! Appreciate you may not have access to Bloomberg, so here’s a summary of my own.

According to the report - In January, the Swiss watch industry experienced a slow down in exports but was still holding up fairly well, given they are navigating through a landscape of evolving consumer preferences, economic factors, and global market dynamics. While the sector maintained growth, the rate of expansion has declined, which is what we would expect given what we know about consumer demand.

Exports in January increased by 3.1% compared to the same period last year, reaching a total value of 1.9 billion Swiss francs ($2.2 billion). This growth, though positive, represents a notable deceleration from the double-digit expansion witnessed in earlier periods, such as the 11.8% surge recorded in the first half of the preceding year reported by Bloomberg.

It would appear precious metal pieces are the main growth drivers, up by 13.4% in value. Steel pieces experienced a decline of 2.8%, while bi-metal watches dropped even further by 3.2%. That said, the number of steel watches exported actually increased by 3.4%, along with a noteworthy uptick of 11.4% in the ‘Other materials’ category... is seems likely a big chunk of this captures bioceramic watches from Swatch.

They also break it down by price categories, which speaks more to consumer behaviour and market segmentation. The surge in the number of watches priced below 200 Swiss francs, rising by 5.5% compared to the same period in the previous year, suggests the demand in the shitter segment is pretty resilient. According to Bloomberg, this trend is driven largely by the Swatch Group’s offerings, and the materials table above would support this hypothesis; the takeaway is perhaps consumers’ appetite for accessible luxury (shitters), even amid economic uncertainties, has not completely died for now.

When you move to the high-end category (> CHF 3,000), you can see the impact of all the price increases we’ve been talking about for a while now. The exports fell by 4.5% in quantity, but rose 4.3% in value. I see this as a ticking time bomb.

Geographically, the export landscape presents a mosaic of performance across key markets. Exports to the United States, the largest market for Swiss watches, registered a modest 2.2% increase by value and China witnessed a more robust gain of 5%. On the flip side, exports to Hong Kong (-4.7%) and Germany (-11.4%) declined, reflecting broader geopolitical uncertainties and shifting consumer preferences.

The stand-out performers were exports to Singapore (+10.2%) and Qatar (+118.4%), the latter being attributed to numerous events planned in the country, particularly the Doha Jewellery and Watches Exhibition in early February.

This chart tells the overall story… I suspect this trend will not change anytime soon, and if watch companies keep hiking their retail prices, the number of units sold will keep declining, and while these reports may continue reporting growth in export value, I suspect we will see the net negative figures coming through at some point during the second half of 2024.

💡 Simplification

This article argues that many of the questions asked by analysts and investors in the investment world, are actually not very useful or substantive. Some brief takeaways:

The pointless questions described by the author are often unnecessarily detailed and tend to focus on minor or trivial issues just to show off the analyst’s knowledge, instead of revealing anything meaningful about the business. “Don't you think” questions attempt to disguise the asker’s preconceived notions as questions.
These are contrasted with the basic yet insightful questions asked by a 15-year-old Bank of America shareholder focused on what really matters - A question such as “What is the bank doing to raise the share price?” cuts to the chase and requires a meaningful and considered response.
The point being made, is we need to ask basic questions more often, avoid providing too much detail up front, and ask follow up questions to extract more information. In the context of investing in stocks, this results in learning more about what management teams might be trying to hide.

As reading this, I felt the same could be applied to watch collecting. I edited the graph labels to aid the discussion.

As collectors, it is natural, even desirable, to seek others’ opinions about watches we are thinking of buying. First hand user feedback will always be preferable to marketing puff pieces from mainstream outlets or video reviews from influencers who only briefly handle a watch. That doesn’t mean the feedback is infallible, or even reliable for you.

When we contemplate buying that seedy looking bottle of truffle oil we once found during our trip to Italy, which ended up being the best damn oil we’ve ever tasted, we are seeking something beyond the ordinary. Similarly, our desire for personalised dinners from establishments which don’t even have a Google review, but which consistently deliver the most mind-bending cuisine, reflects a quest for uniqueness and authenticity. While we may discuss these experiences in terms of quality, they are not solely about objective standards; rather, these desires are fuelled by the awe-inspiring, unforgettable moments they represent in our minds.

The same applies to watches.

Someone who owns a first-gen Datograph may associate it with memories and experiences which cause them to overlook the fact it wears like a hockey puck, and is poorly balanced.

Others who are in love with a brand or independent watchmaker, will overlook or gloss over the fact that they often wait for inexplicably long periods of time for responses from the brand regarding repairs, or perhaps fail to mention the fact that the watches don’t work as advertised because “they still really enjoy the watch.”

The point may seem painfully obvious, but worth making because I still see this happening far too often. Stop asking stupid questions, as you’ll simply continue getting stupid answers! Think carefully about whether the person being asked is going to be providing information relevant to your decision, or merely providing you with their opinion which actually has little relevance to you. For instance, before asking someone whether how a watch wears, or how comfortable they find it to be, find out their wrist size, and ask for a wrist shot on their wrist. Wrist size is one thing, but wrist shape is something else. Imagine asking this person (image below) how a particular watch wears, without knowing their wrist shape… pointless!

I tend to approach this with a wide lens, so I can better understand how a watch fits into the collection of a person whose opinion I am seeking. Is this a watch they wear regularly, or once a year? Do they wear it for long periods of time, or do they tend to wear it occasionally, for a couple of hours at most? This informs how to weight any response I then seek regarding wearability, comfort, weight, durability, and so on.

Often, you will find the ‘big collectors’ who have tens, maybe hundreds of watches, are the least useful sources of feedback, because they have all of these watches but rarely have a chance to use them long enough to develop a meaningful personal review of a watch beyond aesthetics and how much it appeals to them “as a watch” - as opposed to, “as their watch.” The irony is how they are often regarded as the best source of information, by virtue of their huge collection and ‘status’ as a collector!

In conclusion, the quest for meaningful insight, whether in the investment world or the realm of watch collecting, underscores the importance of asking the right questions and valuing experience over appearances; Discarding superficial opinions and seeking out substantive understanding. I am not saying we should stop asking questions; I am saying the value lies a bit deeper than the answers we receive.

Piaget: Price tag Predicament

Let’s get Piaget out of the way, shall we? It is basically old news at this point, but I haven’t had my say and I’ll keep it brief. I found myself wondering whether Hodinkee had used ChatGPT to write articles and assign random authors to each piece, when I read what Tony Traina had to say about this watch. He makes some uncharacteristic statements throughout the article - including a claim that this watch doesn’t have a true competitor on the market - but the most amusing statement was this one:

It might be tough for any brand, Piaget or otherwise, to top this release in 2024.
Tony Traina, apparently.

Still, I am not a regular reader of Hodinkee, and reading the above article reinforced my stance; I found the article via Jack Forster’s more measured take on the subject. Jack makes reference to a comment on the Hodinkee article which suggests the MSRP of this watch is roughly the same price today as it was when the original launched in 1979, when adjusted for inflation… which appears to be inaccurate.

Assuming the commenter is correct, and the original was indeed $25k in 1979, it equate to $113,274 in today’s money - which is approximately 55% more than the MSRP of the new watch ($73k). I think the appropriate MSRP for this new watch would be < $50k; playing in the leagues of the Bvlgari Octo Finissimo, or the Omega Constellation in Moonshine gold as some of the comments on Jack’s post have mentioned.

Still, Jack’s piece helpfully compares the Piaget with other close-enough pieces such as the VC 222, AP 39mm Jumbo and Patek 5712 to name a few, and then concludes the pricing is in the right ballpark unless you think Piaget doesn’t have the brand equity to justify playing in ‘this league’.

Of course, by now we all know the answer: that is exactly what many people think! What more is there to say, really?

📌 Links of interest

🤖 OpenAI develops ‘Sora’ tool to create realistic AI videos. Or watch MKBHD’s 12 minute video on the subject.

🤓 Check out this website about escapements, shared by a collector named Wouter in the WhatsApp group I mentioned a few weeks ago… bound to excite most watch geeks.

⭐ Learn more about the Patek 565A Freccero “Acuatic” via

Aircooltime

🕵️‍♂️ A Mystery Death in Oslo: Citizen Aqualand.

🚗 Wang Chuanfu: A Name Everyone in the West Should Know. An excellent profile of BYD’s founder. (BYD recently surpassed Tesla as the world’s leading EV maker)

✈ Why You’ve Never Been In A Plane Crash. Fascinating stuff.

🥽 “All My Thoughts After 40 Hours in the Vision Pro” - A long article, including several videos, of an immersive experience in Apple’s new product.

💰 How you can change behaviour: some surprising findings from a mega study.

🚀 SpaceX launches private ‘Odysseus’ lander on pioneering moon mission by Intuitive Machines.

♻ Tesla Cybertrucks Are Rusting Despite Being Made Of Stainless Steel.

🧠 Exciting week in medicine research: micro-dosing LSD enhances brain signal complexity without altering consciousness. Exercise can be one of the core methods of treating depression. AND, the first endometriosis drug may finally be on its way, as early trials show promising results. Wow.

🎵 Cassette tapes are making a surprise comeback in Japan.

👟 Trump launches sneaker line.

💀 Sitting for most of the workday raises one’s risk of early death by 16% and the risk of cardiovascular death by 34%, according to new research.

💩 If life is better than ever before, why does the world seem so depressing? The Seven Laws of Pessimism.

📚 Dictionary.com’s new words and phrases for 2024 include “greedflation,” “shacket,” and “Barbiecore.”

⭐ This game shows you a photo from history, and you have to guess where and when it was taken. My highest score was 39,939/50,000 on my third try. Super addictive! My best attempt was bang on:

Let me know how you did!

End note

What would my end note be, if it weren’t another random tangent? Can’t help myself.

One of the links above references the Seven Laws of Pessimism, and one of these laws seems analogous to our plight as watch collectors: The Law of Self-Effacing Solutions: Once a solution has been achieved, people forget about the original problem (and only see further problems).

Duḥkha is a concept from ancient Indian philosophy and is a key concept in Buddhism. It is often translated as “suffering,” “unsatisfactoriness,” or “discontent.” Duḥkha represents the inherent unsatisfactory nature of our existence, and understanding and addressing it is central to the Buddhist path towards enlightenment and liberation from suffering.

I wouldn’t dare liken Buddhist enlightenment to watch collecting utopia… but the law quoted above speaks to the way in which humans continuously raise their standards to accommodate step changes in their lives. As a student, you may have considered a £15,000 watch to be lavish or unobtainable, and today you may have several such watches. As we acquire more, we are propelled forward by the duḥkha we feel as collectors; an insatiable desire to acquire. This is not surprising, as I have said before:

Perhaps, it isn’t actually attaining or achieving anything which is the cause of happiness, but instead, it is the act of pursuing these achievements or goals which brings us happiness.

So what exactly am I getting at? “The original problem” in this analogy, is clearly not a particular watch you might be pursuing - it is actually the desire to acquire. It makes perfect sense, therefore, that while a hunt for your grail is ongoing, the ‘problem’ is still being solved. Once we acquire a watch, that particular ‘problem’ is solved, and we go on to find new ‘problems’ to solve; i.e., new watches to hunt down.

Fundamentally, this would only end if we suddenly lost interest in watches altogether, or found a different hobby which excited us more, and required the funds we would otherwise spend on watches. A friend of mine made a conscious decision to switch entirely from watch collecting to sneaker collecting. After trying to do both simultaneously for a while, he decided he got more joy from having a huge variety of collectible sneakers which he could wear, share and enjoy, and this brought him more pleasure than watches did. So he sold all his watches (I bought one from him), and he is still a huge sneakerhead today, nearly 5 years later. By the way, he obviously didn’t solve any problem; he just substituted one (watches) for another (sneakers).

Now I have said two seemingly pessimistic things here: 1) acquiring a watch invariably leads us to starting another pursuit for a different watch, and 2) this cannot end, unless we quit the hobby. The thought I wanted to leave you with, is to consider how you can delay your duḥkha for as long as possible.

What I started doing around October last year, was not rotating my watches too frequently. I would wear the same watch for at least 3-4 consecutive weeks. This ensured I got to experience it in many conditions and life situations, and learn more about how and why I enjoy the watch. It also led to further discoveries about the watches I was wearing, and also about the ones I was not wearing. This helped me determine which watches I didn’t want anymore, and which watches I missed wearing and was looking forward to getting back on my wrist. You might think this is rather simplistic… “What could I possibly learn from continuous use that I would not learn from sporadic use?” I hear you saying…

I will use one obvious example: if you regularly wear a thin watch for a month, you will for example, become accustomed to how it slides under a cuff or how little you move your wrist away from door handles. If you then switch to a thicker watch, you will have a period of adjustment, but within a week or two, that will become your new normal. However, as you adapt to one versus the other, you start to develop a much better understanding of each individual watch as a part of your entire daily life, and as a result of this, you develop a much deeper understanding about your own ownership preferences.

The key insight for me in this experiment, was if I was constantly adjusting to a new type of watch, I ended up having a rather generic view of the role of “a watch on my wrist”, but that view was not as deep and nuanced as it could be. I now find myself picking a watch more purposefully, and recalling more emotions about how that watch makes me feel, what I like most about it, what aspects I dislike, and so on. I am also more aware of how the weight of a particular watch can become onerous if I am at a desk typing for a long time, or how a large buckle can be obtrusive in the same scenario. but completely fine if I am out and about, far away from a desk.

There are many watches I admire, but which I have no interest in owning… and there were some watches in my own collection which I came to realise, brought me more joy in ownership than in actually wearing them - it was this approach which helped me let them go, making room for other watches which were high in the matrix.

I hope you give it a try… most of all, because I can promise you one thing: doing this will guarantee delaying your duḥkha as you wait for your next call from the authorised dealer.

Oh, and in case you missed it, here’s a new post about a fake Rolex Daytona 6263.

Until next time,

🔮Bonus link: Antikythera Mechanism: The ancient 'computer' that simply shouldn't exist

A hundred and twenty years ago, divers discovered a shipwreck off the island of Antikythera in Greece. What they found changed our understanding of human history.

The mysterious Antikythera Mechanism has captured the imagination of archaeologists, mathematicians, and scientists ever since, even inspiring the plot for Indiana Jones and the Dial of Destiny! Now, using the latest 3D x-ray and modelling technology, experts are unravelling the secrets of what this machine may have been capable of.