Is bargain hunting online devaluing American pocket watches?

Discussion in 'American Pocket Watches' started by RyanM, Jul 3, 2019.

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  1. RyanM

    RyanM Registered User
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    Greetings,

    I'm starting this conversation to help gain insight into why it may be that American pocket watch values have been decreasing over the years and would like to hear everyone else's thoughts on the subject.

    I have two different scenarios I believe have contributed to the decline in prices, but first I should point out that I'm not talking about a value placed on a watch by a book where prices are taken from a convention, but instead the prices you can expect to pay every day online from places such as eBay. If you can purchase a Hamilton 992B in working condition and in a gold filled case for $200 from any of half a dozen or more sellers, then how is a 992B worth more than $200? A thing is worth what someone is willing to pay for it, and if people only pay $200 for a 992B, it is worth $200.

    It may be simple to offhandedly dismiss the prices on these sites as you can't inspect the movement first and many sellers offer a watch "as is", however if a watch is advertised as working and it doesn't work when you recieve it, you most certainly can get your money back. Therefore you can buy online with a reasonable amount of confidence. (I for one service all my watches, even if they are sold as just serviced, I like to inspect them myself for my own peace of mind.)

    Now, back to the factors which have caused a decline in American pocket watch prices. The first I'd mention that played a major factor is the advent of online marketplaces. Before then, these watches were mostly purchased in person from conventions, flea markets, yard garage and estate sales, pawn shops, etc. And while you can still buy that way, online marketplaces certainly changed things. Specifically, people who owned watches could list them directly online for sale, this caused many people who would otherwise not have bothered trying to find a buyer to have access to a multitude of buyers with very little effort. Therefore, there were more pocket watches available and supply and demand economics caused the average prices to decline.

    The second factor I'd mention is an extension of the first; the ability to track online sales of various American pocket watches (with great accuracy as a serial number can give you a model and grade, and then prices can be easily tracked for a specific model and grade from a given manufacturer). This gives a consumer a price index, useful for not overpaying for a given watch, but also a double edged sword. There are various tools one can download to track online purchases, and some available to view on websites. The other side is causing watches to lose value, when in fact values should be increasing in my opinion.

    So, how does bargain hunting play a factor in the declining prices of American pocket watches? In my view it happens like this: first a buyer finds a watch online they would like to own. Next they check the price index I mentioned above, making a note of the current value based on what others have paid for a similar watch based on manufacturer, model, grade, case material, and condition. Finally, they place a bid under the current value and win the auction. Now what happens to the price index? Being based on actual online sales data, that purchase they just made changes the price index causing it to decline. Now instead of having purchased a given watch for a good deal, all similar watches are instead valued at this new lower price. The buyer didn't save money, they changed the price and ended up changing the current value of everyone else's similar watch. Now what happens if this cycle repeats? Obviously the price index continues to show lower and lower prices for that watch. A watch which was once easily sold for $800 could now regularly sell for $200, such as the Hamilton 992B.

    The transparency of online purchases, with the price you've paid being available for all to see, means your purchases change the perceived value of a watch. Asking ourselves questions such as; "if that guy only paid $180, why should I pay $200?" Or priding onself on their dealmaking abilities such as; "if that guy paid $180, I bet I can get one for $160." are both natural for a collector, but in online purchases will change the value through changing the price index.

    I'd be interested in hearing other people's thoughts on why you can buy an American pocket watch for a fraction of the price that they used to command, or feedback on my own thoughts if you feel they are invalid for one reason or another.

    Thank you for your time,

    Ryan
     
  2. GeneJockey

    GeneJockey Registered User
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    Good points, all. But think of it as a market that's approaching perfect information. Decades ago, information was very limited and sellers had most of it. Now sellers and buyers both have access to histories of sales with the prices gained by competitive bidding. There are 620 "sold" listings for 'Hamilton 992B' in Ebay under "Pocket Watches, Antique". You can find the price people paid, not just for "a Hamilton 992B", but for a PARTICULAR combination of age, case, dial, etc. You might find 10 sold listings that match what you're looking for. At that point, you can start doing statistical analysis!

    So, is it bargain hunting? Or is it just more information, more widely available.

    Or is it the population of American pocket watch collectors is aging, and not being replaced by younger collectors at the same rate? Supply and demand works both ways. Fewer collectors buying, and more collectors selling off will drive prices down, too.
     
  3. Ethan Lipsig

    Ethan Lipsig Registered User
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    I agree with most of what GeneJockey has said, but I think I think there is a fallacy in your analysis, Ryan. You said "Finally, they place a bid under the current value and win the auction. Now what happens to the price index? Being based on actual online sales data, that purchase they just made changes the price index causing it to decline."

    What you seem to have overlooked is low bids don't cause watch value to fall. If a bid wins, it reflects what the buyer and seller and competing bidders thought the watch was then worth. If a bid is too low, someone will bid more. I am outbid on most items.
     
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  4. GeneJockey

    GeneJockey Registered User
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    Ethan, to clarify what you're saying, if "fair market value is the price that a willing buyer will pay to an unrelated but willing seller", the price a watch sells for ESTABLISHES current market value for that piece, regardless of previous value?
     
  5. Ethan Lipsig

    Ethan Lipsig Registered User
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    I am saying that, GeneJockey, but also that it isn't the low bid that established the value of the watch. It is the absence of a higher bid that established it. Because antique pocket watches aren't fungible and the market for them is thin, past sale prices are imperfect predictors of what a similar watch will fetch in the future.
     
  6. Gregory

    Gregory Registered User

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    In my opinion it's the age of the people collecting these days that's causing price drops. It's happening in a lot of different areas of collecting. I'm also a gun collector and old Mitchell fishing reel collector including old Johnson & Evinrude outboard motors and we see it happening in those areas also. It's due to us old guys dying off. Young people over all are not into collecting the same things as us older guys are. A lot of guys that I talk with that are my age have started down sizing and selling off their gun collections because they don't have anyone to leave their collection with when they die and they don't want their wives to be taken advantage of if she were to try and sell off their collections when they're gone.
     
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  7. John Cote

    John Cote Director
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    Price today is totally about supply and demand...as it always is. With a common watch like a 992B where thousands and thousands were made, pretty soon everybody who wants on has one. There is more supply than there is demand. It is true that online market places have increased the ease of selling and buying, but for a long time 992Bs were selling for double what they bring now on markets like eBay.

    It is supply and demand. There are more watches than buyers.
     
  8. musicguy

    musicguy Moderator
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    There are millions of American watches floating around.
    Elgin alone made 60 million watches and I think waltham made 40 million(not including all the other Watch Co's.)
    Mix that with the efficiency of ebay(and the promotion of Antiques Road show and rising gold prices)
    prices had to fall.


    Rob
     
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  9. Jeff Hess

    Jeff Hess Moderator
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    Mr Cote nailed it. Most is simply supply and demand. And of course the OP's addition of the ease of buying on the net.

    2 edged sword...on line sharing has advanced research greatly also (yes lots of bogus stuff being spread around but still)
     
  10. GeneJockey

    GeneJockey Registered User
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    RIght. You almost never know what the high bidder was ultimately willing to pay. We know what the SECOND highest bidder was willing to pay.
     
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  11. Rhett Lucke

    Rhett Lucke Board Secretary
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    As Jeff said, John nailed it. In the end, it's all about supply and demand.

    In my opinion however, the drivers behind supply and demand differ, depending on the category of American Pocket Watches one might be buying. It wasn't too many years ago when common railroad grade watches and their variants were selling for record prices. In my opinion, this was fueled by both an increase in demand (new collectors, coupled with an increase in availability of both goods and information via the internet) and in some cases - market hype. During that time, many long time collectors predicted that it was only a matter of time before the the bubble burst. As new and existing collectors got their fill of these watches or moved on to other interests, demand dropped and the market quickly moved into a phase of correction. In my opinion, this correction (and in some cases, possibly over correction) is complete and prices now seem to be either static or slightly increasing.

    In the case of scarce, early and high grade watches, where supply and demand has been historically limited, a number of large collections have all hit the market at the same time. With knowledge remaining somewhat limited, this increase in supply has also resulted in a drop in prices. In my opinion, this is a drastically different situation than with the common railroads as the market price reductions are driven more by increased supply than from a significant decrease in demand. The result however, lower market prices, has been similar. I personally believe, this has resulted in a buying opportunity for those who are interested in these type of watches.
     
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  12. GeneJockey

    GeneJockey Registered User
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    The aging of the collecting population is demonstrated to me by the kind of questions novices ask - "How do avoid overwinding my watch?"

    Those of us my age and older would have started out with a mechanical watch. You wind it all the way up till it stops. Simple. But now generations have grown up without that knowledge, because they never had a mechanical watch. They have no connection to them, the way we Olds do.

    I'm curious what it would look like if we graphed the median age of NAWCC members over time.
     
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  13. topspin

    topspin Registered User

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    I see we've already made many excellent points.

    Here's a couple more points...
    If I am looking for a given watch to fill a hole in my collection, the internet makes it easier to find one... or several... therefore I would pay less than if I found one by chance and was thinking "If i don't buy this watch now, i might never see another one."

    The internet makes it easier to find repairers and spare parts. (You could loosely define "spare parts" as anything that's smaller than a complete watch.) Thus, increasing the supply of complete and working watches. Also meaning that I don't need to wait for a complete & working example to come along - i can get to the same place by a different route.

    I wonder - is there a general trend in collecting, away from having a large number of pieces and towards having a smaller, more focused collection of just the better pieces? Or has it always been like that?
     
  14. DeweyC

    DeweyC Registered User
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    My view is that there are two main drivers of collecting. Trophy hunting and intrinsic interest. These are not necessarily unrelated, but in my mind they represent two ends of the continuum.

    This is exemplified by art and rare book markets. The historical importance and the intrinsic value of the objects have not changed. What has changed is the number of people who have to have it for bragging rights. They do not display it, they do not generate knowledge from studying it. They just want to "own" it.

    I do not take ownership of anything but financial instruments because I intend for them to increase in value. I "collect" things that speak to me either artistically or historically. I personally like gold filled hunting cases that are inscribed because they speak of relationships and how those relationships were commemorated. To me they are important historical documents; to others they are of little monetary value because they do not look new and unused.

    Our reasons for acquisition are as varied as we are. That accounts for why so many things are preserved. But I think trying to define the forces behind watch prices is like trying to pick individual stocks for investment in today's extremely complex stock market. Just too many factors and "unseen" forces creating impossible to model cross currents.
     
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  15. Tom McIntyre

    Tom McIntyre Technical Admin
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    Steve Humphrey did that about 8 to 10 years ago and found that the average age was steady at around 58 years as I recall. He did his analysis over the previous 30 years in 2010.

    Rhett's analysis matches my view of the current market. The watches that, although wonderful, were made in the millions are commodities and will eventually reach a supply/demand equilibrium. When I first started collecting pocket watches the 992 was $75 and some of the "old timers" were telling me they were too expensive and that they had bought theirs for $35 as they wer being phased out of railroad service. The current value is probably an inflation adjusted $75 based on my 1970's experience.

    However, quite a few exquisite and rather rare watches have appeared as collectors have either passed away or have sold to avoid the widow with treasure problem. There is enough knowledge available that those watches could reach a fair market value, but the depression in the more plentiful models and grades seems to have had some impact on lowering those prices.

    I think it might be possible to broaden the knowledge about rare watches and perhaps dispel the cloud that the railroad market has generated on watches in general. The recent run up in "work" wristwatches may be an indicator of the real market for the new generation or it may be a replay of the railroad bubble. I may need to live to be 125 to know for sure.
     
  16. James Foster

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    The only thing I would add is pocket watch values at there peak were a product of a bygone era, a sweet spot in history if you will. They had intrinsic value as state of the art mechanisms with a component geared toward quality and beauty. They were produced when labor was cheap and technology was expensive. There was a depression that provided an audience of envious people. With the boom after WWII people could fulfill their envious desires. People hoarded the specimens that represented prosperity(my dad had 300 or so). That drove prices up. That generation is dying. There is no such set of conditions to create a generation to fulfill the demand for the existing supply. Even if we do experience a depression and boom again, pocket watches will never be the state of the art mechanisms for an essential function they once were or catch the attention of that population. I have no idea what percentage of large collections are left or if we have seen the new norm yet.
     
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  17. ben_hutcherson

    ben_hutcherson Registered User
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    There's not a lot to say that hasn't already been said, but I will also add that the good stuff always rises to the top, and it will find its own price.

    In the past month, we've seen a record price paid for an American pocket watch. As to whether or not it was "worth it"-that will probably be debated in mart rooms and hotel bars for years to come, but there were at least two people able and willing to pay $300K for it.

    Even among "common" watches, the exceptional pieces will still bring strong prices. There was a time when I started collecting where a Hamilton 992B in a #2 case was the epitome of what I WANTED for my collection, but after having a few they've lost any appeal for me. I don't really even "do" Hamiltons these days(despite the fact that my two most significant purchases of 2019 so far have been Hamiltons) but at the same time if I saw a straight, all original 992B in a rare case type in good condition with a numbers-matching box for a low price, I'd probably buy it and be disappointed if I didn't get 2-3x market price for a "common" unboxed 99B. Some folks would probably think I was nuts for paying 4 figures for a 17j Ball-Hamilton, but it was also have what the last example I saw for sale that I would have wanted to own brought, and I'm not losing any sleep over what I paid for it.
     
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  18. John Cote

    John Cote Director
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    I don't think so. As a 40+ year collector I have always thought that most collections are really accumulations....or at least they seem to start out that way. I still see a lot of people here, on other watch forums and in person who just buy anything they can get cheap. Ebay makes it easy to look for bargains.

    I have no real comment on what Dewey said above...because it couldn't be said any better. WELL SAID DEWEY!
     
  19. Maximus Man

    Maximus Man Maximus Man

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    I agree with every, but there may a few other factors that contribute to these declines.
    I know many collectors who prefer to not share what they have amassed. Their collections have been concealed for decades and so has any public record of what was paid for each watch. I know this happens today and is not available to factor in current values. This primarily happens when two collectors wish to keep a transaction private not to hurt third parties who have also shown interest in the same watch.
    Another consideration is the number of scrapped watches tends to actually balance the supply and demand factor whether that be a result of online or direct trading.
    And since this thread started with using 992Bs has an example, a gentleman recently passed in my town. He sold me his better RRs because he wanted to focus on buying more bar over crown 992Bs. At that time I am guessing he had close to 500 to 600 992Bs. That in itself would have a dramatic impact on the market when he died and it did. It makes it very difficult with this market to find a desirable or unique 992 or B that collectors would still demand or don't already have.
     
  20. musicguy

    musicguy Moderator
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    #20 musicguy, Jul 6, 2019
    Last edited: Jul 6, 2019
    It is kind of ironic that collectors(us) spend so much time gathering together
    watches that fit their(our) criteria for collecting, and when they(we) die
    the watches will just get spread around the country again. All the research that went into each watch
    in just a few generations down will be lost and the people will have no idea what they have.
    Yes for a while some will find good homes but those too will be sold. Only to be
    gathered together again by a future collector.

    That is why websites like this where we gather and research and store information
    about them is so important because this is all that will be left behind for
    people to look through to learn about the watches they have.




    Rob
     
  21. johnbscott

    johnbscott Registered User
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    I think the watches will go on and the market will survive long after we have bowed out.
     
  22. PapaLouies

    PapaLouies Registered User
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    No one can touch this for $200.
    IMG_1835.JPG IMG_1836.JPG IMG_1837.JPG

    Regards, PL
     
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  23. Gregory

    Gregory Registered User

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    True but the original solid gold cases will continue to get more scarce as the years go by. As the price of gold goes up more and more get scrapped.
     
  24. Dano4734

    Dano4734 Registered User

    Pretty much the same thing has happened for coin collectors to stamp collectors to pottery. What was scarce at one time is now available
     
  25. butlercreek

    butlercreek Registered User
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    As we move away from watches towards technology, (phones) watches are devalued
    As we move away from physical money towards technology, (debit cards) coins are devalued.
    I think I see a trend here......technology is the true evil.
    The only question is.......what’s next.
     

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