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‘MisterRolex’ on Investing in the Watch With the Crown: Past, Present & Future

Paul Newman Daytona 6241 (left) and 6239 (right)

Paul Newman Daytona 6241 (left) and 6239 (right)

Looking at recent auction results for vintage Rolex Daytonas and at the secondary market asking prices for most Rolex sports watches, one could be forgiven for thinking that buying a Rolex is like finding one of Willy Wonka’s golden tickets. However, this is not necessarily always the case, and buyers should always take care to remember the line seen in most financial advertisements: “past performance is not an indicator of future performance.”

What is absent from most discussions about collectability and desirability is the role played by fashion and the most important thing to understand about fashion, is that – by its very nature – it is ephemeral and always changing. To the casual viewer, it might seem that what we see today is the way it has always been – far from it.

For example, 25 years ago, the most desirable and valuable Rolex watches were the Bubbleback and the Prince. I remember attending a 1999 auction in New York, where one page of the catalogue showed five Rolex chronographs: a black dial pre-Daytona, two Screw pusher Daytonas and a pair of 6239 Paul Newman Daytonas; with one black and one white dial. The pre Daytona had an estimate of $3,000 but didn’t sell, the screw pusher Daytonas hammered at just over $4,000 each and the Paul Newmans at $8,750 apiece. Right now the value of those models is $150,000, $75,000 each and $275,000 respectively.

Rolex Cosmograph Daytona 1963

Rolex Cosmograph Daytona 1963

An investment of around $30,000 USD then would have appreciated by over 2,000%. Which would lead one to believe that an astute buyer at that sale would have done very, very well. But be careful what you say. I was at the sale and purchased two Rolex Bubblebacks, at an investment of around $12,000 USD. If I still had those watches and wanted to sell them now, I would be lucky to get half of what I paid.

However, the subsequent price history of the above-mentioned chronographs should serve as a warning to anyone thinking that investing in Rolex is a guaranteed earner. Prices rose in the early noughts, peaking in 2006/7 and dropping in the next few years, until 2010 where they stood at around 50% of what they were in 2006. But, by 2012 they had regained their 2006 peak, and since then the trend has moved constantly upwards, with the current value now more than four times what it was in 2010.

The watches remain the same, so what can justify this pricing rollercoaster? The answer is simple – there is a world outside watches and it has an effect on everything.

Rolex Submariner

Rolex Submariner

In 2006/7, the first signs emerged of a major problem in the banking world; this reached a crescendo in 2008 when several major banks failed, and many others had to be rescued by governments around the world. Here is a simple fact: watches, particularly vintage ones are discretionary purchases. They are what you buy after your needs for shelter, food, clothing and transportation are met. And many of the people who had ‘invested’ in vintage watches in the early part of this century now found that they needed cash more than they needed the watches. So, there was a surplus of watches coming into the market and the prices simply dropped.

However, by 2011 central banks had reduced interest rates to almost zero; so, if you had a decent credit rating, banks were desperate to lend you money. This resulted in massive rises in the value of luxury items which were perceived to have investment potential as well as being signifiers of good taste: classic cars, Hermes Birkin bags, single malt whiskies and, of course, vintage watches.

Just be careful as there may be a slight blot on the horizon. There has been a slight decline in the most recent sales results from both vintage cars and single malts. Could it be a sign of things to come for vintage Rolex? Possibly.

So, bearing this in mind, here are my ground rules:

Rule 1: Buy what you love and if it increases in value, consider it a bonus. Should it decrease in value, don’t worry – you still have a watch that you love.

Rule 2: It costs as much to service a £2,000 Rolex Oyster as it does to service a £50,000 Rolex Oyster – so always allow for the cost of service, which could be as little as £250 or as much as £500.

Rule 3: Only buy models which have been discontinued. If you’re speculating, this one should be pretty self-apparent.

Once you’ve taken those rules to heart, here are my own personal buying suggestions…

Rolex Datejust

Rolex Datejust 16014

Rolex Datejust 16014

Preferably all steel or steel with white gold bezel. Yes, it is the most popular Rolex of all time, but that also means a ready and buoyant market. My advice would be to pick a watch from the 1970s to the late 1980s; these will have the more organic acrylic crystal rather than the clinical sapphire glass.

Try to find a late model – reference 16000 with polished bezel or the 16014 with white gold faceted bezel – and always try to get an Oyster bracelet, rather than the more common Jubilee. Try to find a linen or other textured dial and in solid colour dials black is the most desirable, followed by blue, then white and then silver. And, unless you specifically want one, I would advise against champagne-coloured dials for investment watches.

Rolex Submariner

Rolex Submariner 14060

Rolex Submariner 14060

Above all I recommended acrylic glass watches in preference to sapphire models, but with the Submariners, the reverse is my preference. The acrylic glass watches are already rocketing upwards in value whilst the sapphire ones still have considerable room to appreciate.

There are two versions of the more common earlier no-date Submariner the 5513 and the 5512, the main difference between them is that the 5512 movement is regulated to chronometer standards while the 5513 is not. When they were new the 5512 was 14% more expensive than its companion, but for most folks the 5513 was accurate enough and so far fewer of the 5512s were sold. Nowadays there is between a 20 to 25% difference in the value of the two models and I expect this to increase.

A better idea would be to look at the model which immediately followed, the 14060 Submariner – the first with sapphire glass and a 1,000ft depth rating. Just prior to the end of production in 2012, Rolex began to print the chronometer text on the dials of these. Currently these four-line dial text watches sell at almost no differential to the plain dial watches, but I reckon this could change in the future.

Rolex Oysterquartz

Rolex Oysterquartz 17014

Rolex Oysterquartz 17014

Ok, this is my wild card but please hear me out. For most folks, quartz has no place in a true watch collection, but the Rolex Oysterquartz is not your conventional quartz watch. The movement, like that in every other Rolex, is built in-house and the 11-jewel calibre 3035 is better finished than any of their mechanical movements being the only calibre they ever produced with Geneva Stripes. The case is also different to that of any other Rolex, as it’s much more angular and bearing a passing resemblance to the AP Royal Oak.

It has long been discontinued, was produced in quite small quantities for a Rolex and has started being collected. My suggestions are the reference 17000 in steel and the 17014 in steel with a white gold bezel.

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