Cartier Santos: The lies to yourself

Value retention is based on hype, perceived scarcity and demand. These things will change over time. It's just something we keep telling ourselves to justify a purchase. There are no guarantees.

People don't understand, watches have depreciation, it's not a commodity like gold that has tons of uses and is finite (by the way, price of gold also tanks), nor it's a unique item like a rare piece of art or a faberge egg. There is no basis to claim a piece of steel with some applied indices is similar at the end of the day.

If you can't take a risk that the price of a watch will decrease and it will be worthless in a few years you shouldn't buy it.

Also, if a purchase is a meaningful part of your savings you shouldn't buy it either. Just be real with yourself with what you can afford or willing to gamble away.

My advice as a financier, take the money and if its disposable within reason, invest it into low return financial instruments as interest rates have hiked. If you want to gamble it away, a poker table would be my preferred route.

Best of luck with your decision!

above comment is good, almost nothing to add.

But couple other points to consider:

Resale value will greatly depend on the state of watch at sale. If you plan on wearing it frequently and not just keep in a box as an investment - likely there will be some wear and tear (no matter how careful you are). This might impact resale price

Resale value also depends on whether you have all purchase docs and original box, so be careful not to lose them.

Most likely at time of sale - watch will have no warranty. True, I guess you can service it at authorized dealer and get warranty for ~2 years, but not sure how much it costs for Cartier. Doubtful you can transfer full cost of repair on a new buyer…

I didn’t do a research, but I think watch prices would underperform inflation for most part. Buying a watch at 7k now and selling at 7.3K in 3 years is not really value retention due to high inflation. Yes, investment on the market bears many risks too, but I guess better chance of generating higher return.

Buy it if you love it and would be happy with only 1/2 back if you decide to sell. Might be better than that, but no assurances. Don't forget Cartier is essentially made of warm butter in regards to scratches, so it will look like it's been through a war with 1 week of wearing.

With all those caveats... I still am very sweet on a Francoise! 🤣

One thing I would say with something like the Santos is there are great deals to be had on used ones. That protects you even more (you may even make a profit.)

If you’re looking to balance out the purchase of a depreciating asset (maybe rationalize the purchase is better) cut a small amount of your discretionary spending elsewhere over the next year or so or sell a watch that gets no wrist time. Many do in fact subsidize their future purchases by selling off parts of their noncore collection. It’s a losing strategy overall but life is too short to try to break even on watches.

Just buy the damn watch!

😅😅

This was definitely wise advice that sounds 100% rational. Watches are not guaranteed to retain their current value. However, when we're talking about spending money on them as a hobby rather than a real investment, it's not a complete waste. It can even give some decent returns on the money spent.

For example, if wearing my Cartier for a couple of years results in a depreciation of 1-2k, that doesn't seem too bad!

Another thing to consider is the transaction cost. A luxury watch will in many cases be sold through an intermediary, such as a watch dealer. There will be some form of commission or fee involved to facilitate the transaction.

Also, a watch doesn´t create a net cash flow, but invested money does. So don´t compare it against a bank account, but a reasonable and diversified investment strategy.

If $7,000 is a noticeable part of your savings, I would advise against the purchase.

I agree! If buying that watch makes you worry about your financial condition. Then its best to put those disposable into safer places. A watch is a luxury, no matter what others say to you.

And as you also have other nice watches, perhaps it's time to switch up with some straps to make it fun again. I had been doing it to my Ginza Alpinist and Baby Alpinist. And when you saved up and when that $7,000 doesn't stress you out a single bit at all. Then it's time to spend it on that Santos you've been waiting for.

Also, everyone wanted Rolex. As we all believe we can be that one who walks out of the AD holding a watch that just doubled in value. But like 90% of the ppl, it is just a dream. If not sold properly, you'll likely lose your watch or even your life. Watch theft and robbery have risen significantly around the world. Even cities like Hong Kong had seen such a rise.

Buy what you love that’s all that matters. Value retention comes and goes. Also depends if you buy used. I’m finding mint condition examples at about 20% less and at that price seem to be stable and loosing very little value - but if it is a watch for life then just enjoy it 👍 you deserve it !

I just put my name in at my Cartier AD to reserve the first Santos large green dial that’s coming in June.

I don’t expect it will hold its value, but I’m expecting it will be beautiful and that I will love it.

I had the same thoughts when I bought my first watch. Actually I sold exact that watch 9 years later. The reason was that I had 3 other watches and realised that I don’t really wear it. In the end I lost a bit money, but if I had bought it at regular retail price that loss would be more than 2.000 Euro. Only Rolex, AP and Patek are value retaining watches. 10 years ago many collectors said Panerai is also retaining its value. Now it’s Cartier and in a few years another brand.

I wrote the following in another thread discussing “value retention” and thought it might be perfectly applicable here too:

This is where portfolio theory comes into play.

Instead of considering your watch purchase on its own, simply reframe your thinking so as to incorporate it into a broader portfolio of assets.

• If I had a $10k watch and it needed to maintain its value, well... that severely limits my choices... not to mention that watches, as a general rule, have a negative expected value, as they are ultimately nothing more than durable consumer goods that depreciate over time through consumption, and even "collectible" watch values are supported by nothing more than consensual illusion

• If, instead, I think in terms of a portfolio, I might say, "Gosh, I have $100k in the S&P 500. Am I willing to take $10k out of the S&P 500, and use it to buy a watch? Then, the remaining $90k will continue to appreciate in value at ~10.7%, per its historical average since inception, while the watch might fall in value by $5k. Hmmm... from a portfolio perspective, I'm still fine earning the lower return on this new portfolio, as I get the utility from the consumption associated with this watch purchase"

That’s what also came to my mind! Having my birthday in June, so another reason to buy the Santos is new color. I’d love to get the medium version in blue or possibly green

If you want resale value, just buy rolex. If you can, that is. Rolex and the AD'S got all the "Value" game worked out for you!