Watch Expert Reveals: The Secret Market of Million-Dollar Timepieces (Pt.1)

There's only one word for what happened: Game Changer. It's going to affect every aspect of the watch world, every attribute. The one thing I know with certainty is, Sonia and John, nothing happens overnight in the watch industry. This is the slowest moving industry on Earth, and they're proud of it.

[Music] Welcome, Mr. Wonderful. Thank you so much, John. I am going to keep this introduction short and sweet because you are truly a man who does not need an introduction. If you've ever watched television, you've watched Shark Tank, which happens to be my favorite television show. Well, thank you. Born in Canada, Kevin O'Leary spent his early years as an international globetrotter and even lived in the great city of Geneva, which may have inspired your passion for watchmaking.

We'll talk about that shortly. You're known for your unique ability to combine your business sense with common sense and, most notably, an unmatched way of delivering a clear message to aspiring entrepreneurs, which I have some questions about. Sure, too. No matter how painfully honest those comments might be, today we're going to challenge you to pivot 100% of your messaging to the collecting world, specifically the watch collecting world, and explore the world of horology in a way that has never been done before.

So welcome, Gavin. Thank you so much. Looking forward to it. And of course, you're a legend too, John. Let's face it. In the world of Patek Philippe, is there any brand bigger than yours outside of Patek? The brand itself? I don’t think so. Not for collectors. I absolutely have wholehearted love for watches, in particular, Patek Philippe. It's obvious.

But today we're going to be talking about some other brands too, and I can't wait to dig into that with you. But my first question is simple: why watches? You know, I think I fell in love with watches in my teenage years because of what you mentioned earlier. My stepfather moved to Geneva, Switzerland, and so on Lake Léman, or Lake Geneva, depending on what you call it, you find some of the original maisons right there.

If you're a young boy walking down the streets, you're looking in at Patek Philippes, or Rolexes, or APs, or all the other boutique watchmakers and all of the brands in Europe that have such unique dials. It became a fascination with watches as art because I've always, as a collector, never been driven into the technical nature of caliber. I've always been a dial guy, and that came from Geneva, walking the streets of Geneva.

When I saw the first Submariner, I just went out of my mind. I fell in love with it, and the moon watch in the 70s by Omega, my very first piece. Every kid that read any engineering magazine or had any kind of a hobby or was interested in space wanted that Omega watch, and it's gone on to be one of my legendary holdings in my portfolio. Each watch, of course, has a story, and through the 70s, 80s, and 90s, I didn't stop. I just kept going.

Now, you've described it as an incurable disease. Watch collecting is just a disease that cannot be cured. Is that true? No, it's true. It's a virus. It is a virus, and there are some rules of engagement when you get that disease that you need to understand. I've said this to younger collectors, you know, that I talk to all the time about this.

First of all, you know, I picked up a new piece today; we'll talk about it in a moment. But my wife has tried to seek professional help for me and said, "You've got to stop this. There's nowhere to put these anymore. You can't wear them in a year if you even tried to. If you wore multiple watches a day, this has to stop." I mean, it's clearly a problem. Then I show her how much they've appreciated and how they're beating our stock portfolio, our bond portfolio, our real estate portfolio, and you know that still doesn't have her. She won't stand down.

And I said, "Look, this is the one thing that I just can't change." I'm very fortunate. I've been able to afford these watches. So the most important thing to know when you get the virus at a young age, which often happens, is never borrow money to buy a watch. Never. Never go into debt to buy a watch. You have to buy within your means, and your collection will change as your means change. If you're successful and you work hard, and maybe you have to be lucky sometimes, you will be able to get everywhere you want to go with watch collecting.

There are some rules of engagement here, but obviously, I'm amazed at each year the new dials that I find all around the world. I have to look in the context of my collection as something that is a portfolio of art. That's what it is, and it's treated me well financially. But make no mistake, it is a virus, and unfortunately, uncurable.

This disease has been good for you. Is that fair to say? Very good disease. So let's talk about the market. You've mastered financial literacy and arguably mastered horological literacy at the same time, and you use your various platforms to promote both. But I'm very curious about the conversations you have when the camera is not rolling, and I hope to draw some stories from you today.

First, with conversations that you have with fellow watch collectors, you're at dinner, you're on the phone. What are you talking about with fellow watch collectors? So you're right; there is a unique global community. You're part of it in watch collecting. It's a sisterhood, a brotherhood. It's people from all walks of life, all different countries, and when we talk about watches, we leave politics aside.

We leave gender, we leave race, we leave everything aside, and we focus on horology—the art of making watches—because after all, at the end of the day, nobody needs a watch. You don't need a watch anymore to tell time. You buy it because you love it, and you love the art of making it, and you respect the man or woman who gave up their lives, their entire careers at the age of 14 onward, as you know how hard it is to become a master watchmaker to honor them and be their payroll.

What I'm almost interested in is talking to Claude Sofia. If anybody, he's the world's greatest, largest watch collector, for sure. I met with him recently for lunch in Dubai with another of the UAE friends I have, and we just sat for three hours. We were going to only meet for half an hour; we were still there almost four hours later just talking about Claude's experiences, what he's done with his one-of-a-kind collections, some of the pieces I've received recently, debating what's new with Patek, what's going on with Rolex, FP Journe—all of these discussions.

Once you get into that narrative, time just flows. It's like if you ever watch in the Middle East people underneath an olive tree playing baccarat or any game, or bulls in France, the hours just go by. It's no different in talking about watches. I've said this before, but if you go back to the Old West, picture a group of cowboys sitting around a fire connecting and sharing stories about their day. I look at these as like the modern-day fire.

They were surrounded, and we discuss, we break bread over it, and we connect. We share our emotions, we share stories, we share adventure, we share sadness, happiness. It's really a beautiful thing, watch collecting—the way it connects people.

Well, each watch—and this is a good example—this is just a fraction of my portfolio, but each watch has a unique story, and I remember every piece as if it's one of my children and how I got it, why I got it, where it fits. Because I'm a dial guy, I'm always seeking the next dial—what's next, what's next, where are we going next? Some of my friends that are collectors are really into the hardcore technology, trying to collect verticals of calibers, but everybody has their own reasoning.

I'm just straight dials. When I see something that is a unique dial that I've never seen before, it doesn't matter to me what the price is. It's what's the story of the piece? Who designed that dial? Where did it come from? What was the motivation for that? The last thing I worry about is the price because I'm not going to buy it at any price if the dial doesn't fit into the collection—like, where does it fit? Why is it here? What makes it unique? Why does it have a position with all the other dials?

Buying the same thing over and over again, to me, is not watch collecting. Now, I imagine that is a conversation you're having with many other friends that happen to be CEOs or owners of watch companies, auction houses, important retailers.

So moving away from fellow collectors, I want to know the conversations you have with the decision-makers in the industry and what you're challenging them when you're sitting face-to-face with them, and what are you asking them?

I often attend the Phillips auction online or in person here in New York. I've recently bought a very unique piece there. The first thing I do pragmatically in an auction is to find out if Claude Sofia is bidding. Yes, because bidding—forget it, forget it. You have to respect who he is, and if he wants the piece, he's going to get the piece, and there's nothing you can do about it.

And there's not only a price bias; every auctioneer in the world knows Claude, and they want to—because he does. He is the number one honored guy, and that's it, and I get it. Now, when there are scraps to the rest of us, that's where we compete. I also know that his collection is vast, so if he's already got the piece, you're not going to have to compete with him.

But if it's a one-of-a-kind, I do my checking to the back doors or online, whatever, and I ask the auctioneer, because I know most of them, and say, "Look, where are we standing with this thing, and do I have a chance?" Now I can bid against anybody else; I'm not worried about that—but not Claude, that's it. But yes, I always challenge them to bring new unique pieces, and lately, a trend that started recently, and it was again manifested itself last December at the Phillips auction, they went to a major museum—in this case, Chopard—and they commissioned a one-of-a-kind piece with a unique artist to carve the Laughing Mexican skull piece that was only going to show up in the auction.

It's never been owned; it's a one-of-a-kind made by Chopard for the auction for charity, and I held the piece days earlier. I wasn't going to bid on it until I actually held it, and I went, "Oh my goodness, this piece is insane," and I have to have it. Paul Boutros was there; I was nervous about Claude. Luckily, he didn't step in. I ended up, I think I was competing against two Chinese gentlemen. But you know when you get in your head—you want the piece, you want the piece. That is the beauty of auction; that is the beauty of auction.

I like to think I didn't overpay for it, but who knows? But it'll be in my portfolio forever, and it has already been a piece that has generated so many conversations. What I love about a dial is you wear the piece out. You don't tell anybody what it is. You go into a room, you sit down beside somebody, and they look at it and say, "What the hell is that? How do you tell time with that? Where did that come from? Why is that a skull?"

All of that. The answer there is, that watch did its job. It started a conversation, and that's the beauty. When you show a watch to a non-watch collector, you can bring them into your world, and dials are the gateway. I mean, that's the first—if you try to explain a tourbillon to someone who doesn't have a horological understanding, there's no excitement. A tourbillon is technically... we don't need tourbillons anymore other than their beauty and what they tell you and how they manifest themselves into a dial.

It's unique, but the tourbillon is a technology that should have been abandoned in 1955 but is still around.

Now, you are a man that knows a great deal, and the deal that everyone's talking about today is Rolex acquiring the celebrated retailer Bucherer. This is something that's extraordinary. They have a hundred stores around the world; I understand 53 have Rolex and 48 have Tudor, and now Rolex actually owns Bucherer. What do you think of this deal, and how will it change the world?

There's only one word for what happened: Game Changer. It's going to affect every aspect of the watch world, every attribute. It's going to change how collectors feel; it's going to change how the aftermarket works; it's going to change accreditation and insurance, and all kinds of issues are going to get manifested in this verticalization.

I mean, there are other industries where it takes decades, and it certainly has taken over 100 years here for this to happen. But if you think of the legacy of Bucherer and Rolex from the earliest days, there was a relationship—torturous at times—but in the watch world, as you well know, John, respect is everything. It's everything. Heritage is everything. History is everything. It's all part of the fiber and the DNA of how this industry works.

When people come to me that don't understand this, they get themselves in trouble. I'll give you an example: somebody says to me, "Well, I just got allocated this really important piece from XYZ brand." I wouldn't mention the brand. "And I got a crazy offer for it, and I flipped it the next day." He just signed his death certificate, or she; they will never be collectors. They will be blackballed in perpetuity during their lives if they didn't understand that they never had a chance in the first place.

You don't go into this not understanding the rules. You have to adapt to this incredible environment, this unique industry. The rules of engagement aren't even written; they're understood and spoken around that proverbial campfire you talked about. You don't mess with the primal forces of the brands. They've been around longer than you have, and you cannot mess with them.

You have to respect them, and you have to slowly build that relationship with them. It takes decades to finally get to a place where you can one day sit down with one of them and say, "Will you make me a one-of-a-kind piece?" That's the upper end; that's your journey. I'm there now. It took me forever.

I'm actually 210 years old, Mr. Wonderful. Here, and there’s no debate about this: small businesses in America create over 60% of the jobs, but times are tough. Is there a solution? Yes, the government employee retention credit program—go to wondertrust.com today.

You're saying very clearly it's not just about money in the watch world; it's about relationships, and these rules of engagement—how you connect with their retailer and ultimately the brand—are key to being able to put together an important collection.

I would say it has nothing to do with money. Nothing. It has a lot to do with respect and trust. You won't get allocations you want unless the retailer and the brand trust you and respect you and know where you're going with it. You have to earn that; that takes forever, and they will never tell you when you have it.

The only way you can measure it is when you get to that place where one day a watchmaker says, "You know, your collection is interesting. Would you consider a one-of-a-kind piece?" You know, it's you, and in allocations, I tell people that are barking at me, "Please get me this, please get me that." You only ask once; you never ask again.

If you start nagging them and calling them and emailing them and texting them, you go right back to the bottom of the list, and if you don't understand that, you're not a watch collector.

I'm so glad you said that, and I've never heard a collector put it so clearly. I think the Swiss watch industry will thank you for making it very clear: don't be annoying; don't be a nag. You don't deserve anything, no matter how big your collection is. You're honored to get that allocation—you're honored. You're always honored.

If you don't understand that, if you're arrogant about it, you lose all the equity you built, and if you go ahead and sell a watch to make a few bucks and then go ask for something special, I can't—even in my nightmares, I wake up thinking I sold a watch.

I mean, I just would never do that, ever, and everybody knows that about me. Ever would I ever do that, and when I die, all of these watches are coming into my coffin and coming with me to the afterlife. I'm going to be buried in a pyramid somewhere, and my son has been licking his chops at this collection, and Paul Boutros is talking to my wife about it.

No, everything's coming with me! I think you're going to need extra concrete around that too and 24-hour security.

But now, I have a question which is a bit sensitive, but I'm sure our friends at Rolex will listen. Imagine you're the CEO of Rolex. What would you do differently, or what would you do the same today?

Well, Rolex is unique, as you know. It's the world's largest watchmaker and probably the premier brand. It depends who you talk to, of course, but I think what Rolex is going to do—and I'm speculating like everybody else—is do nothing. They're probably for a long time going to leave Bucherer alone. They're going to operate at arm's length because think about the other relationships inside of one of these here in New York, you know, the time machine, or any of these in the Meatpacking District.

It's got a huge—there are other brands that survive on those shelves. Patek, I buy my Patek. They're not going to want to lose that relationship overnight; I'm sure they won't. But what they're doing is establishing a unique business model for the next hundred years and a hundred years after that.

Because the one thing about watches that people have learned, even during the pandemic and even during the move of the internet, is that it's not just online. The experience of going in to see the piece, to sit and look at different options and dials, hold them, spend hours with them, drink a glass of Bordeaux, Burgundy, or Pinot with them, go outside for the fresh air, come back in, wear the piece—sometimes you're making huge financial decisions because you're buying a very unique, important piece from Patek, for example.

You don't do that online; you need the experience, that atmosphere that these remarkable, call them museums—they spend millions creating that environment, and I respect them for it. I want to pick up my piece there; I want the whole essence of when I receive that watch. It becomes part of its history, and I go through that all the time.

So I think Rolex totally gets that. Whether you go into Geneva, or you go to Dubai, or wherever you go in the world—Miami, New York—when you walk in that store, it's the same atmosphere. They've nailed it years ago; they're not going to change that.

So imagine you're one of the decision-makers in Patek Philippe management in Geneva, and all of a sudden, Patek Philippe watches are being sold through Rolex-owned retailers. How do you feel about that, and what do you do?

Well, we've seen this movie before. We've watched it happen recently in the last seven years with AP, where they had many relationships with retailers, particularly here in the U.S., and they changed their minds. François Watch has allowed a few to exist, but he's brought the whole thing in-house, and he's decided that if you're going to collect AP, you're going to have a direct relationship with the brand.

I'm not sure Patek will go in that direction. Patek is such a sought-after brand by collectors and individuals. I mean, it's a brand that has—it's one of the three Horsemen. When I say three Horsemen, I mean Rolex, AP, Patek. I don't think—I think if that's another situation, they’re going to do nothing. They're going to just keep that relationship.

The one thing I know with certainty, Sonia and John, nothing happens overnight in the watch industry. This is the slowest moving industry on Earth, and they're proud of it. They would rather move slow, think decisions for decades before they make a move, and still, there's an insatiable demand for their product.

So how distribution channels work, how retail works today, tomorrow, 10 years, 20 years, is not going to stop the demand of people like me. I'm going to play ball with them, no matter how they want to play ball, because I'm part of that passion play—that dance, that DNA.

I'm just one collector; there are millions of people like me. And you know, we watch this world go by, and we're going to integrate in no matter what direction they take. So, I'm not... But one thing I've learned about Rolex, they don't make many mistakes. Historically, they've gotten it right time and time again, and same with Patek.

AP has fundamentally changed over the last 20 years, as time will tell. Yes, but the demand for AP is insatiable. Insatiable! You know, I'll tell you a story. I was in the AP Boutique a few weeks ago, in Miami. It was announced a few months ago, picking up a watch that I'd worked on for two and a half years with the team in Geneva—a one-of-a-kind piece. It's right here. There's only one of these in the world, an open-work Royal Oak.

I was picking it up, and I have to tell you, to be truthful, I was moved to tears. I've been working on it for so long, and I finally held it in my hand. It was just an emotional moment for me. Later, we made some adjustments because it has a one-of-a-kind red band. I brought my wife with me, and she said, "Wow, I like that. I'd like one too."

And I said, "That's not gonna happen." However, you don't want the same size style; they have other women-based watches. She fell in love with the look of a Royal Oak, and now she's wearing one. I was very fortunate to be able to get another one, but it was not—it was a production watch. But she loves it.

That happened in the personal experience of holding this piece. You can't do it online. You can never do justice with a picture of a watch on your phone. You gotta hold it, and that's what happened to my wife. And now she's crazy for AP, which is a horrible thing for me. We don't want two people in the family with the same virus. It might be competing against their problem.

It's a problem! Let's explore that emotion that you feel when you receive a watch that you've been working on, waiting for, for so long. Where's that emotion from? Is it something from your childhood, remembering walking the streets of Geneva? Is it a moment of being proud of something you've obtained? Is it celebrating the moment in itself? Where is it coming from?

For me, it's joining the camaraderie of other people that have already shown their appreciation for that brand, that watch, that caliber, that dial. So I can be part of that community, and so, you know, when I look at something like this FP Journe—this watch was an entry level 20 years ago. Very hard to make this piece; it's now impossible to get.

I run into people all around the world that have this piece. It's rumored to be Putin’s watch; I don't know if you ever heard that story. I have, and we are part of a unique—they don’t have to say anything to each other. For me, emotionally, when I wear that watch, I'm now part of a unique brotherhood or sisterhood, no matter how you want to look at it, of men and women that have said, "This is part of who I am now, and this is part of my story—watch collecting."

And that's how I feel about every piece. I get stopped all the time. Usually, it's two questions: "Please sell me that watch," which of course, you know my answer—it's like selling my child. "I can't sell you in my hand; I’m keeping this." It's part of me; it's in my DNA.

But very often, it’s someone who just comes up to me, pulls back his cuff, is wearing the same piece, and that's all we say. We kind of respect. Respect, that's it! I was in the elevator once wearing my Aquanaut. Another gentleman had the same watch on. It was just the nod of respect; we didn't even say anything.

If you have an Aquanaut and I have, luckily, to have them, I mean, they are impossible to get. Yes, and my Aquanauts are from my original retail purchase, so I'm so proud of that. I’ve never had to go to the secondary market for those.

And now if you have to? My goodness, the prices are insane! But still, they appreciate, and so I really look to own a piece like a 5711, which is now priceless. I mean, I was very fortunate to buy it when it was a production watch, and so it's become, you know, for Patek for me a unique offering.

You know, let me show you something else, John. This is not an expensive watch. This is a Tiffany. You'll notice something very strange about the bottom of that dial—two. What does that say? 727. That is not what should be there, but that is the address of their new store in New York.

That's brilliant! Blue Tiffany on the back; they made a few pieces. I'm very honored to have one. I wore this on the set of Shark Tank in the recent June pod, and Barbara Cochran was to my right said, "That's my favorite watch you own!" And she's seen a few watches.

It just shows you—dials tell a story. When she realized what was going on, she went out of her mind! She said, "You must be kidding me!" I was fantastic; I haven't seen that watch before!

Yeah, no, I mean, it's a quartz watch; it's no different than an elegant from an FP Journe, but it’s a dial that tells a story, and again, it starts a conversation. In that case, with Barbara.

Here's another piece I wanted to show you while we're walking through some of the watches I brought. You'll recognize this as a Tudor, a classic look. It's made from silver. Tudor has recently gone into new materials, and they have done a lot of work in brass and in silver.

I wore this again shooting Shark Tank; it became the production staff's favorite piece. They fell in love with it. I mean, you wear it every day; it's a beautiful watch. But I'll tell you what moved me about it: afterwards, after that pod and everybody coming up was saying, "Can I get one of those? Where did you get that? What's the story on this piece?"

Which is, again, a conversation starter. I realized, because I've been thinking about this for a long time, Tudor once in a while create a Founder series of watches, and I went to Adam here, the U.S. CEO for Tudor, and said, "Would you ever consider, if I commissioned it, making a unique one-of-a-kind Shark Tank Tudor with a Shark Tank logo, if we get the rights from Sony, and engrave on the back the individual's name and a unique serial number?"

He said, "We'll do it!" So we found the first 23 people that were there the day the pilot was shot, and those watches are in production. I will be giving those out next year, again, being a payroll.

I’m buying that for my honor, you know, make one for charity, and they will auction it at the Paul Boutros Phillips auction in December. He said, "No, there's not a Founder associated with that piece." The answer is no.

I respect that decision. I totally respect it. I did not whine about it. I said, "Yes, sir. You got it." He said, "I want to know every single name on every piece, and I want a list of those people, and I want you to prove to me that they were Founders," which I did.

I love it! Yeah, again, great—that shows you how he commands the brand, how he understands his brand, and how he protects his brand, and what he's done with that Tudor brand. I never owned a Tudor until I met with him at the Meatpacking Rolex boutique, where they have a Sub boutique inside it. That guy sold me three watches. He's the best salesman they have!

That's spectacular! Yeah, our watches are an asset class—100%. I mark to market my watches using software and auction prices. What I do is I look at the mean auction price each night. I do this automatically with software, deduct 20%, and mark to market at that price for insurance purposes.

So, I always thought there was 20% fluff in a lot of these websites that do auction pricing, but I think 20% discounts are reasonable. In aggregate, over the last seven years, nothing has beat my watch collection in the rest of my portfolio, including all my alternative asset classes, including crypto.

Nothing has beaten watches, and so they are liquid. Obviously, I can't sell them, but I have to have a value associated with them, so I can put them into my overall portfolio of alternative assets. I treat them just like I do alternative asset classes like private equity or investments I'm making in companies or in real estate. They are an alternative asset class.

When you buy a watch, it has great value if you do the job as a collector to get diversification and understand what you're buying. And I'm never embarrassed to call someone like you or Paul Boutros or many other collectors I know and say, "I'm really trying to get my head around this piece. What do you think?"

And you get all kinds of opinions, and you want that information because that's the market speaking to you before you pull the trigger and where does it fit? A lot of the collectors I deal with know my collection. They know it inside out; they know what I own. They say, "Why are you buying that? You've already got 15 of those."

You know, it's sort of that kind of feedback that you want.

Yes, it's an alternative asset class.

Kevin O'Leary's secret hints of success: your watch. Well, if I see a journey on you, you could be a brain surgeon; you could be an astrophysicist; you could be an artist; you could be a painter. This is what I'm talking about. This is the magic of collecting and the brand and the history and the person in the story. This is what it's all about.