What does the Paul Newman Daytona sale mean for watch investors?
by Hugh Taylor | November 02, 2017
As most of you must have now heard, this time last week Paul Newman’s actual Daytona sold for just short of £13.5 million, making it the most expensive watch ever sold at auction. It made headlines around the world and here in the vintage watch community we’re currently wallowing in its glory. Finally cool!! Even if only for an instant. Of course, with the spotlight now upon us, every man and his pooch wants to know about investment watches, wants to look like Paul Newman, and wants to know what’s going to be the next Paul Newman watch, so I thought it might be useful to address those questions here.
But first, understand one thing, this was the pinnacle of vintage watches. I mean, this was the watch that has been at the heart of the vintage watch buzz that has been snowballing since the eighties. Will there be another on that level? Probably not. But what is sure, is that this sale will have (is already having!) a butterfly effect and will bump up prices across the board. Exactly where those ripples will settle is, of course, difficult to say, but I enlisted the wisdom of vintage luxury watch expert Joe McKenzie, founder of Xupes, and between us we settled on a handful of pretty mutual conclusions.
A Foreword on Investing in Vintage Watches
Over the past decade we have seen record watch sales popping up on an almost yearly basis. Such a bubble has been attributed to the rise of the internet and social media, which has hugely increased the exposure of the watch community. Where watch collecting was once a niche hobby, nowadays it’s all over Instagram and detailed information is available at the push of a button. These gold rush stories spread quickly.
The vintage watch has the get-rich-quick appeal as well as being, thanks to their size, practical status symbols that you can actually wear, and that revive popular cultures of before, like motor racing in the sixties or the Mad Men age. Also, technically, these things don’t have expiration dates. So, even as the Swiss watch industry saw a downturn over the past few years, vintage watches continued to smash records.
What are people looking for? Traditionally, Patek Philippe wore the crown when it came to vintage watch sales. Deservedly too. They protect their brand and work hard on their heritage, buying back their own important pieces, often keeping them in their own museum. They also provide an archive entry on each watch, so you can see its service history. This means each watch has its own story. What’s more, these are serious timepieces, built and finished by hand over the course of months with cutting-edge watchmaking techniques.
But Rolex has been catching up over recent years and the Newman sale confirms it. Vintage Rolex sports models are now the most sought-after and most valuable watches on the internet. Yet, place the Newman Daytona alongside the previous world record holder, the Patek Philippe steel 1518, and the comparison in terms of how much watch you’re getting for your money is not even close. The Rolex is a stainless steel chronograph, originally worth under £200, while the Patek is one of only four stainless steel editions of the first series-produced perpetual calendar chronograph, which means it has one of the most impressive complications in watchmaking.
In short, other than rarity and condition, the two main parts that make up the value of the Paul Newman Daytona are identity and provenance. And the good thing is there are a number of similar options out there, including some great pieces outside of these two stalwart brands.
What will be the Next Paul Newman Daytona?
If you need a bit of background, we outlined the story of how this watch came to market last week, we also wrote about the creation of the Daytona, the iconic 6239, and the dawn of the legend of the Paul Newman Daytona.
Obviously, to get anywhere near the Newman price you’re going to need all four factors mentioned. But let’s start with identity. The model Newman wore, a 6239 with an exotic dial, of which in total only a couple thousand are still in existence (in decent condition), was labelled the ‘Paul Newman’ by collectors in the late eighties. This label, which happens to be shared with one of the coolest men of the twentieth century, turned out to be pretty valuable. Within five years the model had grown in value five-fold.
So we need a watch with a similar label. “Two immediately come to mind: the Bond watch and the Steve McQueen Monaco,” said Joe. When Sean Connery first strapped on a Rolex Submariner Ref. 6538 in Dr No, sales went through the roof. While other Submariner references appeared in later Bond films, and are also called ‘James Bond Submariners’, including the Ref. 5508 and 6205, the 6538 is the original. “These references in good condition and with papers are highly sought-after, but still sell in the hundreds of thousands of pounds. Ones actually used in the films go for more, but they are still to pass the million pound point.” In 2015, a Ref. 5513 Submariner, the one with the famous saw-edged bezel that Roger Moore used to cut himself free in Live and Let Die, sold for around £180,000.
Indeed, genuine papers is a key piece here. “Provenance is a cliché word in the auction world. In its most basic meaning it refers to the watch’s paper trail and service history. These are key factors in determining value. But throw in a connection to an iconic or political figure and it goes a whole new level.” Some classic examples are the Rolexes worn by US Presidents. Earlier this year Jackie Kennedy Onassis' Cartier Tank watch sold for £285,000, and to none other than Kim Kardashian.
“But when it comes to matching the Newman Daytona the main contender is Steve McQueen's Heuer Monaco.” There are, of course, a number of similarities between the watches. The Paul Newman Daytona phenomenon was built around the countless posters of Newman looking as cool as it gets with his Daytona on show. Newman was a racing fan and used the watch as a timing instrument on the track. The only other man to come close to Newman-level cool was Steve McQueen, and it turns out he also liked watches and wore one in particular in an equal number of iconic posters. For the 1971 motor-racing film Le Mans, six Ref. 1133B Heuer Monacos were delivered to the film set. This was documented in-depth in a Wall Street Journal article by Michael Cleriz last year. Despite interest and prices rocketing since the article, these watches are still to challenge auction records. In 2012, one sold for just over £600,000. “My guess is these will be making a major appearance before too long.”
What about other investment watches?
“It’s fair to estimate that all pre-owned and vintage Daytonas are going to jump 5-10% over the next couple of months and have typically grown by a similar number per year since watch collecting was boosted by the internet.” One model, however, is our pick of the bunch and it just so happens to be the latest one.
The Daytona Reference 116500LN, the one with the ceramic bezel, was the most talked about watch of 2016 and its price has been going up ever since. Few new watches have ever had such a fanatical reception. Rolex have made it limited in supply too and its price on the secondary market has been anything up to double what you would pay directly from Rolex (if you could stomach the waiting list!). Typically however, they're selling at 50% over list price in unworn condition. “The ceramic Daytona is arguably the best looking yet and aesthetically it's quite similar to the original models, particularly in the white dial. Its value is only going up from here.”
And for those with a slightly more, ahem, modest budget?
“The first place you should head here is for any vintage Rolex sport model with a valid paper trail and decent condition. The rarer the better, but these are likely already over the £10,000 mark. A Submariner Ref. 5513 from the mid-seventies can still go for under £10,000 and they will surely double in price over the next five to ten years."
If you’re looking for identity, one option is the ‘James Cameron’, which is the name given to the Sea-Dweller Deepsea D-Blue made to commemorate James Cameron’s expedition to the bottom of the Mariana Trench, the deepest part of the world’s oceans in his ‘Deepsea Challenger’ vessel. “You can still pick these up for under £10,000 but they are quite difficult to get hold of already and are on the up.”
But with vintage Rolex being so expensive it has now spilled over into other vintage sport watches, mostly Heuer and Tudor. “The last Tudor Submariner is still relatively cheap and it has everything other than the famous-owner connection, I’d bet big that prices for these are going to double over the next few years.”
Finally, there a few brands producing serious quality and in limited numbers, but with enough style to get the public attention. These are increasingly hot and also on the up, but they are also on the expensive side. Brands such A. Lange & Söhne, FP Journe and Roger Smith. "I’ll add vintage Audemars Piguet, before the nineties, and not just Genta-designed Royal Oaks but the older stuff too, back when they were still on the level of Patek Philippe."
The knock-on effects of the Newman sale are likely to bring plenty of new eyes to the 2017 Geneva watch auction season, which just so happens to start next week with Phillips and Christie’s leading the charge. A quick flick through the catalogues of the upcoming sales confirms the brands we mention, but you can find these options from other trusted dealers, away from the competitive sales environments of the big-name auctions, also, for those on a slightly tighter budget, check out the vintage options from the brands mentioned, Tudor in particular, or the James Cameron Sea-Dweller, as these right now seem quite undervalued.
For more information on vintage watches follow our magazine, or you can shop pre-owned and vintage luxury watches on Xupes.