Sunday, April 5, 2009

Master P Tastes, Gekko Returns

By Travis

We at Zero Hedge always strive to present you with profitable ideas, feeding the inner Gordon Gekko in us all. While “greed is good” it can most certainly lead to spending lavishly. But how many of us spend lavishly whilst spending wisely? By reading some of your comments- um, “not so much”- however, there’s still hope for some of you out there.

Spending money on baubles and toys can be fun (and it could get you laid in the right circles- remember Darryl Hannah?), when you lose your last Thomas Pink shirt to the market and have to liquidate all the crap you
bought (after the girlfriend grows fat and lazy, or you grow fat and lazy and she dumps you anyway) or you drop dead (after all, we all default to zero on a long enough timeline, right?) someone will find that not only did you lose your self worth, but to add insult to injury- some of the shit you thought was the “barter of last resort” even on a rainy day, really isn’t.

It's one of my many jobs to monitor the “price of poker” in many areas, and perhaps advise decent stores of value, so while its up to you to make money, maybe Tyler and Company can help you enjoy it more by spending it on the crap that really matters.

Buying material things is rarely an investment. Well, I have to skirt around the meaning of investment, true- anything you buy at a price and sell at a higher price can be labeled an “investment,” but if you lose money, well, that’s outright “depreciation?” Or is that a “bad investment?” Call it what you have to… Fine art, cars, jewelry, wristwatches, houses, property- these are all things on a long enough time line- while you default to zero- these things may appreciate. Maybe.

Take fine watches, they’re bought and sold daily, there’s even a market that looks to auction houses to set the tone- houses like Christies, Sotheby’s and Antiquorum. An excellent store of value that not only serves a valuable function- measuring the time by the second before we all default to zero- but in some cases can payoff in spades.

Antiquorum, the “Worlds Premier Watch Auctioneer” last week had their Spring Geneva Auction and despite a fledgling economy with even the Gordon Gekkos of the world not making and spending as much as they’d like to, posted impressive results- SFr 5,419,584 worth, or about $4.75 million.

Dually impressive was that about 78% of the some 481 lots sold, up slightly since the last auction earlier in March, which hammered down about 75%. So roughly one person in four is still walking away with his old crap, having to resort to the likes of eBay or the local pawn shop.

Auction highlights include a handful of complicated Patek Philippes, widely regarded as the blue chip/gold standard of collectible watches. Consistently earning strong six figure results in most any auction, regardless of venue or mere economic downturn, to quote Henry Hill from Goodfellas- they’re “better than Citibank.”

More notable was the surprising crown jewel of the March auction- a one-off Rolex Daytona Cosmograph from 1985. While these watches generally command around $25,000 in standard steel Ref. 6263 (not a bad rate of return either, considering they were about $1,500 new); this 18K example, custom Ref. 6270, encrusted in diamonds and sapphires went for a whopping SFr 360,000, or about $317,000. This wasn’t your typical bit of bling from 1985, but rather a bespoke factory reference purported one of about a handful made for the Sultan of Oman.

Generally bejeweled sport watches encrusted in rare metals and stones are rarely considered valuable (or in good taste) so before you run to the local Diamond Exchange for that clapped out Rolex only Master P would find appealing, think twice before you waste your money.

But remember, Antiquorum takes a buyer’s premium and commands a seller’s fee, sometimes totaling up to 20% at the end of the day. Like in the “price of poker,” most often “the house always wins.”

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Anonymous said...

It's all about the entry price.

But some goodies are starting to hit the market, on ebay too.


Kurt Osis said...

yeah.... no. "true- anything you buy at a price and sell at a higher price can be labeled an “investment,” "

an investment is something you buy and never sell, living on the income stream. What you describe is speculation.

As Krugman says, I've got Keynes right here.

"It is rare, one is told, for an American to invest, as many Englishmen still do, “for income”; and he will not readily purchase an investment except in the hope of capital appreciation. This is only another way of saying that, when he purchases an investment, the American is attaching his hopes, not so much to its prospective yield, as to a favourable change in the conventional basis of valuation, i.e. that he is, in the above sense, a speculator."

- John Maynard Keynes, The General Theory of Employment, Interest and Money

Anonymous said...

Gee!! That's prettier to look at than money. What a babe magnet. Bulging pockets aren't as attractive. Lighten up...... Interesting read for a Sunday morning.

Asian markets will come later...So will the angst.

Kingfish said...

I'll just stick to my lil ole Tissot.

Anonymous said...

My goal used to be a Uyless Nardin watch, I have switched to a Bulava. I did like the story, I also am a income investor, not as much a speculator. My only exception is purchasing silver.


OSR said...

Buying material things is rarely an investment.

This isn't necessarily true, with proper asset management. The key is to diversify your asset portfolio efficiently. For instance, my realized losses on Truckstop Barbie's was more than offset by profits in aftermarket, human kidneys.

Anonymous said...

Sheriff... UN's are nice watches. Unfortunately, the only watches that have a chance of holding value (relative) are Patek and Rolex. UN's VC's Blancpain, Breitling, IWC, LeCoultre, Omega, et al fall into the category of you bought you own it.......forever, unless you're willing to accept pennies on the dollar when Zero Hedge"s views become reality.

Anonymous said...

“better than Citibank.” LOL. I wonder what comp would be written now..........???

Anonymous said...

How many of those watches were bought by the manufacturers themselves? (They're famous for artificially boosting those auction prices.)

Anonymous said...

This guys first two contributions are about Rolex watches and auctions!!?


Hey shill, what are you trying to pitch?

Anonymous said...

Tyler - you're pointing to a % of transacted rather than price % change to indicate that a market is healthy??? If you investigate the secondary market for watches, as we have done by calling dealers, you would note that secondary market prices are down 20%+ for most of the market and are getting worse. This brings into doubt the ability of watches to 'store value'. A large portion of high-end watch sales may have been driven by collectors who may now be seeing their investment rapily decline in value and who may be rethinking wether it makes sense to buy the limited edition watches that each of the manufacturers seem to produce every couple months to juice their numbers.

Anonymous said...

"Limited Editions" or watches labled as such are never good bets for appreciation (maybe Panerai is the exception, but only among the Paneristi); high-end auction prices are an exception, as they depcit the finest and rarest, most collected. "Fine and Rare" should never be confused with "Limited Edition."

Anonymous said...