The watch market is booming in a way that’s never been seen before in the US market. But as anyone who has recently tried to get their hands on a (new or vintage) Rolex knows, it’s become near impossible to find on some of the most covetable and collectable watches out there. To complicate matters, when you finally do snatch up that vintage classic, as it turns out, there’s a decent chance it’s a fake. Or at least, a Frankensteined version of its original self.
Fabrice Guéroux is an authority on horological counterfeiting and the author of two books on the subject: Watches, An Identification Manual for Contemporary and Collector’s Pieces, and Real and Fake Watches. After 20+ years in the business, Guéroux spends his time in Europe and the US holding masterclasses, lectures, and workshops on how to detect the reals from the fakes. In fact, he’s made it his mission to educate the world on this subject. Many watch companies, including Rolex, call on him for his expertise.
Below, he breaks down the supply and demand issues happening in the ever growing world of watch collecting, why the right watch could be more valuable than money in the bank, his favorite models, and what makes a fake so hard to spot, even for a seasoned pro.
LEO: Let’s start with this crazy shortage happening with vintage watches. What does it really come down to and where does an expert like you step in?
It’s all about rarity and demand. You have two separate markets for watches. Of course, you have the vintage watches. But now, the new watches market has exploded as well, so if you go into a Rolex store today and ask for a new Submariner or Daytona, there’s very little chance, if any, that they’ll be available. Even if you are a big celebrity.
The Daytona is very expensive because it’s been one of the most difficult watches to get at Rolex for years. If you wanted a new Daytona, say, 10 years ago, you had to wait for two, three, four years. These days, if you put your name down at Rolex, they’ll not even add your name to the list because they know you’ll never be able to get it. Because of this market and the demand, if the watch in the store is worth $20,000, you’ll pay $60,000 for it in the grey market.
Personally, I’m never interested in buying and re-selling a NEW Rolex or Patek Philippe or Audemars Piguet or whatever, because the financial benefit is not worth the amount of work it involves. A new model of the Daytona, at Rolex, they won’t even sell it to you, but the retail price would be like 14,000 bucks or something. But in the second-hand market, I will pay 40k for it, then I will turn around and sell it for 45k. It’s crazy.
So it’s become necessary to have an expert in this area, so that he can you find the watch.
Would you equate it to collecting art and needing to have an art dealer to get you the right pieces to collect?
That’s exactly it.
What makes the watches that are in store less valuable than a vintage watch?
When you go to Rolex, if you look in the window, they’ll have steel gold watches available, but never any sport steel watches. The gold and the gold-steel are easy to get. The most difficult watches to get are the all-steel watches. Take a Daytona Sport watch in steel, for example, and say it’s 14K. Rolex doesn’t make a lot of money on that. But when they do the same watch in full gold, they make a lot of money because instead of $14k, they charge $45,000. And let me tell you, there is not $30,000 in gold in that watch. It’s more like $7,000 or $8,000. So they make a lot more money on that. A lot more mark up. So what they want and what they expect, as far as sales are concerned, is selling gold and platinum watches.
Which watches are the most collectible these days?
The ’60s and ’70s watches. The ’70s are the most in-demand because you have this Rolex Daytona Paul Newman. We have this market where everybody wants to look like Paul Newman, Steve McQueen, or Sean Connery. These days, in peoples homes, you have all this furniture from the ’70s, your watch is from the ’70s, even my Nikes are from the ’70s.
Is there a celebrity now that you think moves the needle on making a watch more valuable?
No. You have to wait 20 years before a watch becomes really valuable with a celebrity.
The market has just totally changed. Take the Patek Philippe Nautilus. 20 years ago, I could buy a Patek Nautilus. Back then, my Italian friends told me, “You have to buy this watch, this is the watch, buy 10 of them. It’s just like 15,000 euros. That’s like $17,000, buy this one, and you will see.” But now, if you have one, it’s more like $150,000. That’s the market today.
How does somebody go about finding a watch dealer they trust?
There is a huge, huge amount of dealers now. But really trustable and professional dealers represent about 25% or less of the market.
So how does the average guy who’s got some money get a watch. He’s like, “I’m rich, I wanna buy a vintage, rare ’60s, ’70s, Rolex.” How does he find someone to trust?
It’s all part of the problem. If you knew the amount of clients who come to me and say, “I have this watch, tell me how much it’s worth.” And I say. “Oh, the dial is a fake… or your bracelet doesn’t match the year of the watch, or the dial doesn’t match the year. The hands are after-market.” And so on. This is a real big problem.
What’s the number one sign to look for first, to know whether a watch is authentic or not?
For me, I look at the years. The watch is from 1965, so I need the hands to be from 1965. The bezel to be from 1965. The case from 1965. The dial from 1965. The movement from 1965, the buckle, the bracelet, the everything from 1965.
How does someone become an expert? How did you?
I started collecting watches 20 years ago, and I rapidly started noticing that there were fakes and things like that. Then what I did is I collected a database of pictures: real, fake, real, fake, aftermarket, and so on. Then I wrote my first book on that. What I wanted to do was share my knowledge. So I did conferences in Switzerland and just traveled everywhere with that info.
The secret to become an expert is to deal with watches every day. The more you see watches, the more of an expert you become. If you quit the market, say, for five years, you come back and you are lost. You have to be looking at watches every day.
Is there a holy grail of Rolexes? The most coveted, hardest to get watch.
The Daytona Paul Newman.
Do you have a dream watch for your own personal collection?
Yes. I could not get one, but Philippe Dufour is an independent watchmaker from Switzerland. If you have one, it’s 500,000 euros—if you are lucky enough to get the watch. But he only produces very few watches a year.
Are there any other brands besides Rolex that you think are on that level of collectors or close? What are some other very collectable watch brands?
Patek Philippe, Audemars Piguet, FP Journe.
What about some of these newer, trendier, watches we see on a lot of guys?
You have two different kind of watches in the market. You have watches you are making money out, and those where you put your credit card in the machine, and you’ve already lost 30% of the value of the watch.
Take a brand like Vacheron Constantin. You lose money like that. And yet, for me, they are one of the best watch makers on the planet. So it’s weird.
So it’s a brand you love, but not from the perspective of resale value.
Yeah. I have a Vacheron Constantin, but I cannot buy a $45,000 watch and lose 30% of the value just like that.
When you are in this market, you know that if you get the Patek Philippe, the same Patek Philippe with the complications and the chronograph and other things, you make that money back three times.
So it really is like being an art collector. Some people buy art simply because they love a certain piece, and some buy art as a collector, for its value.
If there was a watch that you would buy for yourself, not because of its resale value, but because you just love it, which would that be?
I would take an A. Lange & Söhne. It’s like 10 times better made than a Patek Philippe, as far as the movement and things are concerned—but it’s expensive, and you won’t make money on it.
But if an expert like you says it’s better made, why doesn’t it have resale value? Why won’t it make as much money as a Rolex or Patek in 20 years?
Because there isn’t that demand. That’s the market.
Who decides this stuff?
We do. Because we’re working with auction houses. In Switzerland, like a Christie’s or Phillips, all the dealers are working together. The big Italian dealers, they are the masters in that they invented the market.
Let’s say they do a sale on a special collection of Patek Philippe or a Rolex Paul Newman Collection. I’ve seen them buy the watches from each other at big, big prices. So then everyone wants them, because they know they were worth 45k two years ago, and now they’re going for 90k.
The magic of it is that the market has never gone down. At the worst, you can get two or three years where it plateaus. But suddenly there’s an auction and boom, and it goes really, really, really crazy. I have friends who are rich enough to have made a collection of watches. 10 years ago, they had a collection which was worth, say, $200,000. Now they have 5 millions dollar’s worth in the safe. So we’re talking huge, huge money.
Would you say if someone doesn’t have a dealer they trust to tell a real from a fake, that they can safely buy a vintage watch though an auction house?
Christie’s and Sotheby’s and Phillippe’s have improved their product. They’ve been working on that for about two years now. But before that, it was not that safe for some of these auction houses.
How is that even possible?
You must understand something. What we call a “fake watch” in the collector’s market, we’re not talking like a cheap fake from China. Say you buy Patek Philippe’s Nautilus from ’78. You pay a huge price for the watch. You buy it at an auction. You get a text that says, “You buy the watch as it is.” That’s it, no refund, no whatever. Then, two or years later, you go to an expert or watchmaker or reseller or another auction house. And the expert says, “The bezel is not from ’78. The bezel was changed by Patek Philippe in 1986.” You just lost 20,000 bucks on the watch, just like that.
Or take this watch, for example [gestures to his watch, a Chronograph Rolex reference 6234 from 1955]. [Pointing to his bezel] You have this part here. If it’s not the right one for this watch, you start deducting from the value. This watch is worth $50,000. If this part is not the correct one, you lose $5,000 on it. If this other part is not the correct one, you lose $4,000. If the dial is not correct, you lose $10,000. You can lose a lot of money really fast.
It doesn’t mean the watch itself is fake, it just means parts of the watch are not the correct parts for that particular make.
It could be that a part of it is aftermarket or a fake from China. Or it could be that it has parts that don’t match the year of production of the watch. Those are two different things. Let’s say the watch is from 1980, and the dial has been changed by Rolex in 1995—if you want to find the dial from 1980, you will pay a real fortune for it, if you can even find it.
So then, what is the most reliable way to buy a watch?
Through an expert.
Where does one find an expert?
That’s the problem. You have to know these guys.
In the US, you have good professionals. You have this guy from San Francisco, HQ Milton. Or other dealers like that. But then, there are other dealers who ended up in court for selling a collection of Paul Newman Daytona Rolexes with fake dials, but they didn’t know it at the time.
So it wasn’t intentional.
No, no, no. They didn’t know. I know exactly where these dials were coming from. There were 2000 dials produced by the dial manufacturer in Switzerland, and they gave these 2000 dials to Rolex for this Paul Newman, and Rolex said, “No, it’s shitty production, we don’t want them, they’re garbage.” But a guy from Rolex stole the stock, didn’t put them in the garbage, and this stock went everywhere. So at that time, nobody knew that, but then Rolex issued a letter telling everyone to dispose of these dials, as they were considered fake now.
Unreal. So basically, being a watch collector is no joke.
It’s really hard. So now people are turning to new watches, and over-paying a fortune to get them. But it’s trustworthy because you don’t run into issues with fakes—except fake Chinese watches and the like, but we are not talking about those. Any professional dealer knows the difference between those kinds of fake and the real fake. Those aren’t the problem.
But so it’s become a more trustful market to buy new watches. So people are paying a fortune to get a new watch, put it in a safe, and then don’t even want to wear the watch because they are scared of getting robbed in the street. They put it in a safe and leave it in there for 20 years , then make a huge amount after 20 years.
You put your money in the bank and get 5%, if you’re lucky. But you can buy a watch and in that same time make 400% on it, and that’s not getting lucky, that’s getting rich.
So you recommend storing a watch in a safe.
The best way to store a watch is to put it in a safe, but once in a month you need to wind it because watches have different kinds of oils everywhere, and if the oil dries, it makes little particles when you wind the watch, and those little particles go in the mechanism and it’s bad for the watch. But nowadays they have storing boxes that wind the watch daily.
If somebody wants to just hire you, how does that work?
There are different scenarios. I have clients who come to me with their collection of watches and ask me for a quantification of the product, so I build the quantification. Or, if you are looking for a watch, I will tell you the dealers who are selling one. Or, I will find a watch and sell you the watch and take a fee.
If someone asks me for a watch, and I know this watch, and I know I can find it tomorrow, the percentage wouldn’t be high. But if I know that I need to go, say, to Italy and see five or six dealers, then go to the Netherlands and then to the UK to find it, and I have to spend a week or more looking for it, you will pay more, because sometimes it can be very difficult to find.
What if someone says, “I don’t know what watch I want. You tell me what watch you think I should get that will appreciate over time.”
This is what I mainly do. Like, they come to me and say, “I have $500,000 to invest, what are the best watches?” I tell them, “You could do this one, this one, this big one, this little one…” So you don’t take risks. “This watch will go up in value in five years, this watch will go up in 20 years.” I have some people who want to invest money for a year or two, or 15 years, then I have people who want to invest for up to 30 years—for their kids. Very different. So I will buy according to this information.
In the United States, it’s a new business. In New York, they are all seeking these watches now. But here in Europe, it has been like this for 30 years. So that’s why in Europe you have good experts, because they have known the market. And they understand how this market was built.