Crazy results from Phillips Geneva Watch Auction

[thrillhouse]

Widely available watches going multiples over used/grey prices. What gives? People have cash to burn?

https://www.phillips.com/auctions/auction/CH080120

[dchang81]

Those numbers make no sense. A safari going for that??? I'm skeptical that there isn't something funny going on, which is not out of the ordinary for some of these auctions.

[enjoythemusic]

Posted this elsewhere... could be money laundering.

[yoast]

Originally Posted by enjoythemusic

Posted this elsewhere... could be money laundering.

obviously...

[thrillhouse]

Originally Posted by yoast

obviously...

Care to elaborate, because it isn’t obvious to me. I could believe the crazy Journe prices as money laundering, but several modern Rolex lots for tens of thousands doesn’t seem worth the risk. Is there something inherently more private about buying the same watch at an auction vs an online dealer?

[WatchEater666]

Auction prices have never been accurate....

Always stupid to base a purchase off of them.

[cascavel]

Originally Posted by enjoythemusic

Posted this elsewhere... could be money laundering.

Nah, just folks with money having fun spending it. Not so easy to do these days.

[ts3]

Some of the SOLD FOR quotes from that Phillips auction have me wonder if they include the Buyer's Premium rather than just the Hammer Price.

[shafran]

Don't understand the lack of love there

[DGB]

Originally Posted by shafran

Don't understand the lack of love there

It is just that you can find some of these watches for a much cheaper price as easily as checking on C24.
Why would you pay so much more?
Bizarre indeed.


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[Uncle-AJ]

A 2012 white face Daytona 116520 with APH dial just went for £30,000!! I have a 2015 model, with APH dial and Chromalight lume. I'm now wondering what that would have achieved.

But then I came back to Earth.

[broham84]

Originally Posted by thrillhouse

Widely available watches going multiples over used/grey prices. What gives? People have cash to burn?

https://www.phillips.com/auctions/auction/CH080120

Manufacturers sometimes buy back their own products at auctions to prop up the resale value and demand, chalk it up to "advertisement expense".

[watchucallit]

Do the listed prices include the auction fees that need to be paid on top of the sales price.
Hard to believe it represents money laundering-- the auction house would have to be a willing participant or maybe I don't understand how money laundering works.
Also hard to believe all the manufacturers were over bidding in the same auction? It was not just one brand that went for a ridiculous price.

[Nav01L]

Originally Posted by watchucallit

Do the listed prices include the auction fees that need to be paid on top of the sales price.
Hard to believe it represents money laundering-- the auction house would have to be a willing participant or maybe I don't understand how money laundering works.
Also hard to believe all the manufacturers were over bidding in the same auction? It was not just one brand that went for a ridiculous price.

You buy an in demand watch somewhere, at say 20k, put it to auction. Your buddy with all the drug money outbids everyone by paying 50k, now you „legitimately“ made 30k in an auction... or your buddy and you successfully laundered 50k, assuming the entry price for the watch was paid with clean money. All that cost you was the fees and premiums. Happens all the time in the art world and no doubt with watches too. Any asset with highly fluctuating value is exposed to that. The auction house doesn’t necessarily know. Though you’d think Phillips would have some level of KYC going, so not sure if a scheme like that wouldn’t be caught.

[watchucallit]

OK got it.. I assumed the launderer was buying the watches with his dirty money and then selling them legitimately elsewhere even at a loss. But your scheme makes more sense..

Originally Posted by Nav01L

You buy an in demand watch somewhere, at say 20k, put it to auction. Your buddy with all the drug money outbids everyone by paying 50k, now you „legitimately“ made 30k in an auction... or your buddy and you successfully laundered 50k, assuming the entry price for the watch was paid with clean money. All that cost you was the fees and premiums. Happens all the time in the art world and no doubt with watches too. Any asset with highly fluctuating value is exposed to that. The auction house doesn’t necessarily know. Though you’d think Phillips would have some level of KYC going, so not sure if a scheme like that wouldn’t be caught.

[broham84]

Originally Posted by Nav01L

You buy an in demand watch somewhere, at say 20k, put it to auction. Your buddy with all the drug money outbids everyone by paying 50k, now you „legitimately“ made 30k in an auction... or your buddy and you successfully laundered 50k, assuming the entry price for the watch was paid with clean money. All that cost you was the fees and premiums. Happens all the time in the art world and no doubt with watches too. Any asset with highly fluctuating value is exposed to that. The auction house doesn’t necessarily know. Though you’d think Phillips would have some level of KYC going, so not sure if a scheme like that wouldn’t be caught.

As a CPA and background in forensic research, this is not how they do it. Art world maybe, but not a 50k Daytona. Even in art world you need to pay tax on gains which is higher margin than other ways to achieve the same goal.

[Uncle-AJ]

A watch journalist friend of mine was there and I asked him what he attributed the inflated prices to. He replied with a picture showing the cars parked outside the Auction House.



He went on to say that some of the people who attended were willing to pay 30k a night on an hotel suite. If they saw something they liked, they bought it.

[cbalster]

Originally Posted by Uncle-AJ

A watch journalist friend of mine was there and I asked him what he attributed the inflated prices to. He replied with a picture showing the cars parked outside the Auction House.



He went on to say that some of the people who attended were willing to pay 30k a night on an hotel suite. If they saw something they liked, they bought it.

I believe most of the stock was sold to phone bidders?

[Uncle-AJ]

Originally Posted by cbalster

I believe most of the stock was sold to phone bidders?

Who's to say that the attendees weren't bidding?

[Wahlberg]

Originally Posted by Uncle-AJ

A 2012 white face Daytona 116520 with APH dial just went for £30,000!! I have a 2015 model, with APH dial and Chromalight lume. I'm now wondering what that would have achieved.

But then I came back to Earth.

What's APH?

[Uncle-AJ]

Originally Posted by Wahlberg

What's APH?

On the dial the word COSMOGRAPH has a small gap between the R and the A, making it look like the APH is a separate word.

[powerfunk]

Originally Posted by Wahlberg

What's APH?

A batch of 116520's with a very slight gap between COSMOGR and APH. Sold for double a normal 16520 price. Pretty perfect example of the insanity of Rolex collecting nowadays.

[Rocketman39]

Any item is only worth what someone is willing to Pay for it. This is It ! I might be able to come with enough Cash to buy a Lug Nut on one of those Cars !

[enjoythemusic]

Eh, so what about the (eventually defective) car that was parked. Many were phone-in orders. Btw, Bugatti and Bentley's don't impress, as to me they say buyer beware (if you've ever dealt with Bentley defects, you know what i mean, a horrible company as had two Bentley cars... NEVER again!!!!!!!!!!).

Come to think about it, maybe your guy is right. Stupidity has many forms regardless of pricing.

[Wahlberg]

Originally Posted by Uncle-AJ

On the dial the word COSMOGRAPH has a small gap between the R and the A, making it look like the APH is a separate word.

Thanks for the info! That's crazy to be honest.

[selfhat1]

Any thoughts on potential dealer manipulation of the market to prop prices up, create fake demand and drive local sales? For example, Dealer A and Dealer B each have a $25K watch and agree to bid it up to $50K. They each exchange watches and cash through Philips so the loss is fees associated with listing. To a layman watching the auction who later sees a similar watch listed for $25-30K it may appear to be a bargain.

This is all speculation and attempt to rationalize anyone who knows the market paying the prices seen for watches like a Batman or a Kermit.

[watchucallit]

I have heard for some high end events, the sponsors rent these cars for appearance sake. Wonder if they saw various owners come and go..

Originally Posted by Uncle-AJ

A watch journalist friend of mine was there and I asked him what he attributed the inflated prices to. He replied with a picture showing the cars parked outside the Auction House.



He went on to say that some of the people who attended were willing to pay 30k a night on an hotel suite. If they saw something they liked, they bought it.

[enjoythemusic]

Originally Posted by watchucallit

I have heard for some high end events, the sponsors rent these cars for appearance sake. Wonder if they saw various owners come and go..

Great point, or perhaps the car was for sale. You're spot on as have been to events where other toys "just so happen" to also be there... and guess what, I hear the owner will "let it go" for $xx,xxx.