Start Your Watch Collection | What You Should Consider Before Purchasing

I guess we should start with Dubai Watch Week. I just watched your panel discussion, and I think a lot of people would be surprised to see high tech being matched with watchmaking. Do you think people are surprised by that?

Well, I think it's high time coming because there's two huge problems in the watch industry and the watch aftermarket and for watch collectors as well. First of all, watch prices have appreciated remarkably in the last two years. We've never seen anything like this in the 200-year, 300-year history of watchmaking. And so think about it pragmatically: no one needs a mechanical watch. Everybody gets perfect time off their cell phone. And yet now, watches are being treated like collectible art.

The biggest problem that emerges when you start getting multi-million dollar price points for watches is fraud. Fake watches—never have they been so well made—and so we need technology to authenticate the real watch from the real brand from the real maker. So that when people are paying 200, 300, 400, 500,000 and more, they know they're getting something that's validated and real.

So one of the things you said in that discussion that I didn't quite understand. I understand taking the crypto technology and attaching it to an object so it can be traced and traded and all of that. But you were acting like you could actually take—they were two separate items—that the crypto version, the ETF version, could be sold separately from the actual watch. Did I understand that right?

Yes, here's how it would work. First of all, number one reason anytime any of this happens is because there's an economic reason to do it. So you think about changing an industry standard. The only reason you could get adoption would be that there's a really strong economic reason to do it. And in the case of watch NFTs, there is and there are.

Let's just start with the idea: when a watch is born, when it's made, when it leaves the maker's hands, the creator's hands, they take a digital image of it, a very, very high-resolution digital image that captures every aspect of the watch itself—its dial, its movement, its caliber, the sound it makes if it's a repeater, the sound it makes when the movement is wound—all of that information at the bench of the creator. Now, that's going to live with that watch in perpetuity, and that's serial number zero zero zero NFT. It becomes the authentication NFT. It remains the digital image of that watch forever.

However, that doesn't mean there isn't more economic value to be had. Let's say we agreed the standard was that there'd be three additional NFTs that were also issued by the creator at the moment the watch was put to market, and those are tradable NFTs. So you, as the owner of the watch, you buy the watch, now you have a decision: do you keep all your NFTs together, or do you sell off some of them, perhaps to pay for insurance, or perhaps because you want to trade them, particularly in high-end pieces where maybe there's only one of a kind—the kind of watches I collect. I've had countless people call me up and say, "Can I buy an NFT of that particular piece I know you own because it's the only one in the world?"

And I've been very interested to do that because I want to support the art of watchmaking. The idea would be with these trades in the market, the original creator of the watch would get a royalty, and I, as the original owner, would also get a royalty. Or you could build a smart contract any way you want. As the value of that watch increases over time, the value of those NFTs that are trading in the open market would also increase. And that, I estimate—and look, it's a personal estimation, but I don't think I'm wrong—and it certainly captured the attention of the watch industry into Watch Week in Dubai.

If we did that overnight to all the watches in existence today, I think the market capitalization of the watch industry would increase by 30% overnight due to the value of the digital NFTs. That is a very large number, and exactly why this is going to happen.

Why would someone want a digital NFT that's not connected to a watch? That's just the NFT.

Well, there's many reasons; there's many use cases. People like artists’ work. There's a woman selling her eggs as an NFT right now, so if you can't have children, you can buy the NFT, and she will deliver the eggs. I mean, that may sound crazy, but that's exactly what she did because she's using a smart contract on the Ethereum blockchain.

What is happening here has many use cases. I mean, going back to the watch industry, the old way of authentication was you got papers with your watch, and then you had to find an expert to make sure that when they looked at it, it wasn't a forgery, it wasn't a fake. That's very expensive, very time-consuming. With a digital NFT that basically has a really high-resolution image of the watch, it's much harder to fake it. I think the industry needs something like this, and we'll eventually adopt it. I'm just being part of and funding some of the research it's going to take to get this work done because I'm a very large watch collector.

We haven't even talked about the insurance aspect of this. Let me give you an example: I have extremely large numbers of watches in bank vaults all around the world, under the streets of Zurich, under the streets of Geneva, under the streets of New York. I don't need to insure those; they're under a bank. I need to ensure the 10 or 12 or 15 that I'm traveling with, and they're always changing all the time as I arrive in one city and pull them out of the vault.

If I had an NFT, I could let the insurance company know these are the watches that I have with me. Now, here is the city I'm in. They can see this right on the smart chain, and they can basically reduce my insurance costs by up to 80%. And I'm very interested in having that happen. They would expand the number of insurance contracts they would have because everybody that has an NFT could just click a button on their app and get bid insurance when they take a trip or they want their watch insured. There's just so many use cases for this technology.

I am sure with 100% certainty all of this is going to happen.

Your white paper: what are you suggesting, or do you know yet what you're going to suggest?

The white paper is designed to actually have input from all the participants, all the stakeholders. Watch collectors—number one. Watch makers—number two. Watch insurance companies—number three. I mean, we need all of them on board for the standards. A fourth participant that's very interested are all the watch resellers and retailers out there that sell the brand-new watches and also sell in the secondary market.

The secondary market for watches is massive compared to the primary market. I mean, there's only so many watches made a year, but there's billions of dollars worth of watches being traded every year, from the ones that were vintage to the new ones that were just bought last year. So there are many different participants, and the white paper is designed to get the input and get a standard established.

It's the same idea of IP protocol on the internet decades ago: you need a standard by which this works, and I'm one of the people championing that. I'm sure there are others, and I'm happy to work with them, but I want to get this done in my lifetime because I have a very large watch collection, and I want to put NFTs on all of them.

It's quite well known that you had your watch collection stolen twice. Would this help with that?

Well, that's never going to happen again because the watch collection is never in one place anymore. Yes, I have gone through the misery of two collections being stolen—both we believe were inside jobs. First of all, it's impossible now. Number two is this: would really be the ability to resell the watch. The minute you have a watch stolen, again using the smart contract on the blockchain, you notify the police. You can notify Interpol saying this watch has been stolen; it's no longer in my possession. Now, when the thief tries to resell it to any accredited collector, or eventually try to service it, it doesn't matter how many times it gets traded, it's going to eventually get caught because the NFT is now flagged as a stolen piece.

Where does watch collection fit into your life? You're an entrepreneur, you finance companies, you play guitar. Where does it fit in here?

Watch collecting is a horrible disease. It's a virus. Once you're cursed with it, your life is miserable. The only reason you work is to buy more watches, and that's exactly where I'm at right now. I mean, I can't even repeat what my wife says to me when I bring home another watch. I couldn't possibly. If I wore ten a day, I would never—I'd never have time to wear them all.

So I really look at it as an asset class. I really look at it as supporting artists who dedicate their lives from the age of 14 to make these incredible pieces. I enjoy the lifestyle of talking to the CEOs of these watch companies and the designers, the camaraderie of other collectors as we share our different stories—the Jordan Society, for example, the FP Journal Society. Not that it's easy to get into it anymore, but just look what's happened to that brand in the last 10 years—just last five years. My watches have appreciated 400%, 500%, 600% from when I bought them just a few years ago. So, you know, I enjoy the whole idea. It’s very much akin to what I do in the wine industry. I love the wine industry because I deal with winemakers all around the world—same in the watch industry.

I like to watch us not hear a little, but I got to tell you there's a camaraderie there when you are just at a party. Someone spots a watch, and you start a conversation. Does that happen to you?

Oh, absolutely. The whole idea, and this is the premise of collecting watches: I collect dials that start conversations. I can't tell you how many times I've been stopped traveling in business or just on the street, and some person says to me, "What is that on your wrist?" Maybe it's, you know, some remarkable dial that Pejot made, or maybe a Patek, or whatever. And how do you tell the time with that?

And I said, "I don't use this to tell the time; I am wearing art. This is a piece of art, and I'm celebrating the artist who made this dial." So I'm all about the dial at this point in my collecting site lifetime. I guess I don't buy production watches anymore. I work with watch companies that are willing to make me one-of-a-kind pieces. I don't ask for anything for free, but I'm interested in working with them to create a one-of-a-kind "Mr. Wonderful" watch, something that no one else has ever seen before—a dial that you can't even imagine, something remarkable in its style—and celebrate that brand with that one-of-a-kind piece.

Now there's where I'm getting, you know, many people asking for the NFTs of those. But every year—because usually it takes two years to do something like this—every year I get another one-of-a-kind delivered to me, and I celebrate it with the world. I show it to everybody, and I'm proud to wear it.

And, you know, it's just that there's nothing more fun than having a Zoom call with the creator and saying, "No, let's move the dial this way; let's change the contrast of the hour hand; let's, you know, let's put this thing full of red rubies because everybody knows I wear a red band on all my watches." So I'm working with them, and I'm very proud to say I've finally reached the status where I get to do that. It took a long, long, long time, but now that I can do it, I do it for everybody that appreciates watches.

Seeing a one-of-a-kind watch is a remarkable experience. I've seen grown men weep in front of one of a kind—weep, weep, weep—the tears of joy and envy at the same time.

How do you tell a young guy—or not a young guy—how do you tell anybody who wants to collect, they've been thinking about it, they've watched you on Shark Tank, they see the red band? I believe you're the one who made the panda real well known. What do you tell somebody if they want to start?

Yeah, that panda sold at auction a couple of years ago for a crazy price to support a great charity, One Drop. I'm proud, you know, I have to admit it really broke my heart to let it go. I didn't realize how emotionally attached I was to it. That was the red banded white steel-faced Daytona panda with the black ceramic. I had worn that in every season of Shark Tank for 13 years in a row. That's a one-of-a-kind watch in itself.

But anyways, I'm glad it went to a great owner. Many, many people have asked for the NFT of that, and I just will not do it until we've got the standard in the white paper. And I wouldn't do that because Rolex shouldn't do that until there's a standard. But anyways, I tell young collectors when you start, go for value. I mean, you know, this is a horrible disease, and it's going to take up a lot of your time and money. And so you have to be pragmatic—start with a brand that gives you incredible value, something like a Grand Seiko where you can get a movement akin to a Patek Philippe in quality at a much more affordable price: beautiful dials, incredible pieces. Grand Seikos are probably a great place to start.

The entry-level pieces from Rolex and from Patek now have skyrocketed. I mean, watches that used to cost $12,000 trade in the secondary market for $55,000. And that's not an easy piece for someone who's in their 20s. The number one piece that young engineers want when they graduate is the Daytona—the white-faced steel Daytona. And that's just in the secondary market; it costs more than your education to buy it.

So, it's gone crazy. You have to look for value, and there are many other brands. I support them all. I work with all kinds of videographers and bloggers. Teddy Balazar does a great job. I always say, "Teddy, your video should—when you and I do them together—let's explore value for people coming into the market in their 20s." And he's done a great job doing that.

Yeah, I've seen some of those. You guys do a great job. President Biden, is he a good collector of watches? Does he know what he's doing?

You know, there's lots of rumors about him, but I'll tell you the other—I’m not sure he's a president; he's more like a dictator—but Putin has made the Canola Metro blue—the blue dialed FP Journe—a legendary piece. He wore it; people saw it on his wrist, and that particular brand went from a seventeen-thousand-dollar value to a hundred and ten thousand. So a world leader like Biden or Putin can change the destiny of a brand with just one sighting it on their wrist. It's remarkable.

Have you ever designed a watch start to finish, or do you always work with a designer?

I always work with a brand that knows who I am, that I've already collected. What I do is there may be a certain design that I fall in love with, and I want to take off the piece. I like to say, you know, move it a little bit over in terms of what's going to—it's always the dial design I want to work with.

And I'm very fortunate, these makers, because changing a dial is incredibly time-consuming. A one-of-a-kind has to be painted and fired; it's not easy to do. There are some great one-of-a-kinds coming. I have two of them coming from—you know, I am not disclosing yet who they are—but I was working with Teddy again. We were talking about him, and he showed me a new designer, a new up-and-coming rock star, and I loved the dial. I called him up and said, "Look, would you make me a one-of-a-kind Mr. Wonderful on this style?" And they've agreed to do it, and I'll be featuring that on Season 14 of Shark Tank. It is a stunning piece, but I don't want to give it all away now; it's going to be—it’s going to get a lot of coverage on the watch bloggers for sure.

Why are watches so popular now, and why are the prices going through the roof?

Well, you've actually—that's a great question and an answer at the same time because the price appreciation—and I'll tell you what I think has happened—there's a strong correlation between people that are into cryptocurrencies and watch collecting. For example, a brand called Richard Mille is very popular with Bitcoin enthusiasts. Those watches are a quarter of a million dollars, and you see them on the wrist. You go to a conference, like Miami last year, Bitcoin 2021—you saw plenty of FP Journals, plenty of Richard Milles, plenty of Rolexes, plenty of Pateks—lots and lots of them.

And so people that are into crypto have all of a sudden got that watch bug, and they're realizing it doesn't matter how much money you have; it's access to the watch. So again, going back to the example of FP Journe, FP Journe himself has to understand why you're buying his watch before he'll sell it to you. He only makes 900 watches a year. You have to be a collector; you have to honor the art and support the brand and share the vision of the other collectors.

Eighty-seven percent of the inventory is held by the FP Journe Society. These are hardcore collectors, so he is—he's sort of the Picasso—the living Picasso of watchmaking. And while he's alive, if you can get one of his pieces, you know with certainty there's only one direction the price of that watch is going. I mean, I don't want this to happen, but post-FP Journe, those watches are going to be priceless.

Would you suggest investing in watches, let's say you didn't even like them, you don't care about decent value? Are they worth it on that level alone?

They are, but I think that's a sin. I think if you don't wear a watch, you keep it in a box, you're destroying its soul. I really believe that. And listen, we—I have huge debates online with watch collectors that buy pieces and never take them out of the box. I think that's just an absolute sin; they should burn in hell in perpetuity for that.

A watch is designed to be put on your wrist and shown to other enthusiasts and other supporters of the art. Yes, it's going to get scratched, but that's part of the patina. I have to remind everybody that's listening: Paul Newman's watch, which was scuffed and never polished, sold for 17.5 million dollars—the original Paul Newman Daytona—in auction because it was part of him. It was part of his life; it was seen with him all the time, on his wrist. That's how a watch should be honored.

Is there one watch you don't have that you wish you had?

Well, there's always one. There's no question about that—there's always one. But you know, I must say that I thought I had a really huge collection, perhaps one of the largest on earth, until I got to the United Arab Emirates and met some of the royal family there. I was humbled; they are the largest watch collectors in the world, and they're very, very discreet about it.

I was honored to see some of the most incredible collections I have ever seen. I mean, it just took my breath away. If you're into watches, you've never seen like this. I'm glad it happened to me because it humbled me, but it also inspired me. And so I'm going to try and catch up with those guys.

I'll ask one final question: what did I not ask you about watches that I should have?

You know, at the end of the day, you know what drives people into this madness? It's a passion. And unfortunately, it starts at around your fifth watch. I always say the point of no return is the purchase of the sixth timepiece. It's over. So curb your enthusiasm to the extent—if you don't want to get stuck in this horrible place where you spend all this time and money pursuing these remarkable timepieces—don't collect more than six. Stop at five.

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