Kevin O'Leary's Watch Collection Journey | Kitco News

[Music] You're probably one of the most diversified investors that I've had the privilege of speaking to. You've got stocks, cryptocurrencies, gold, venture capital from your Shark Tank deals, and of course, you've got watches. Let's talk about your personal journey. You've got a wide spectrum of watches in your collection. Since when did you start collecting?

Well, my stepfather worked with the United Nations and we traveled a lot. It's headquartered in Geneva, Switzerland, and so he was constantly going back there. We have a home in Geneva; he's now in fact a Swiss citizen. In the mid-70s, he introduced me, took me down the Roger River de Lac. We drove right into Geneva, and all the great many zones are right there by the lake in Geneva—that famous waterspout. You're going to find Rolex, Patek, AP, all of them. They're all there. You can walk between these massive maisons.

He took me in and started showing me watchmaking as an industry in the output at that time, and I just got hooked. I mean, you know, when I was a teenager, I knew all the different makes, all the brands, all the models, all the movements, all the calibers, all the cases, all the dials. Wow! And yet I couldn't afford anything, right? Because you know, it just was out of my reach and he wasn't going to extend. You know, that's not—he taught me to go make it on my own. When I could afford it, I came back with a vengeance.

But I already knew pretty well all the details of what was collectible, what wasn't, what makes, what brands, what was hot—all of it. And so I have been insatiable in terms of building my collection, and I just enjoy it so much. The watch community globally is a fascinating group of individuals: kings, monarchs, collectors, physicians—you name it. It's just the most remarkable.

And I know most of the world's largest watch collectors now—that's the bond between us. Do you remember the first piece you bought?

Yes, I do. Omega Speedmaster Moonwatch. Wow, that's the classic! Okay, mid-70s. Yes, and I've had since then two of my collections have been stolen—inside jobs—but that piece I was able to recover. It's a very valuable piece, most emotionally, but also the movement of the caliber at that time was very important because they built some of the best movements then due to, of course, being in the Nassau program at that time.

Right. Did you buy the Snoopy Moonwatch that came out recently? Did you watch that?

Yes, I did. Yesterday, I did, and I'm actually going to be getting that in a few weeks. It's going to be one of my Shark Tank eights in season 14. It will be a one-of-a-kind with a red band on it. I think the reason the Snoopy is taking off—for those of you who don't know, in the back dial there is Snoopy on a rocket ship going to the moon. The Bitcoin community has gone berserk over that watch. I don't flip my watches, but if I wanted to sell it, I could make a fortune on that piece, but I won't be doing that.

Well, especially since it's got your signature red band on it. I know the story behind that. I'm going to talk—I'm going to talk to the audience about some of the pieces that you have today to show us. But first, I want to—I want to get your thoughts on this story. I was reading an article by the Financial Times that came out about a month or two ago, and I'll just read the headline of one of the paragraphs here. It says, "Chinese investors pick luxury watches over houses. The wealthy are spending their extra cash in Rolexes as rare downturn grips property sector."

And it says here property has been a one-way bet in most Chinese cities, but the urban housing market was liberalized in the late '90s. Now, it says here, most of the wealthy in China—well, not most, but a big percentage of the wealthy in China—have traditionally bought houses as a store of value, but now they're shifting their extra cash into Rolexes, Pateks, and other luxury brands. Is this a trend you've been noticing all around the world, or is this exclusive to just China?

No, it's all around the world. It's all through Asia, all through North America, and India—everywhere. You know, there's a huge movement going on in terms of collectors that are considering mechanical watches art. No different than modern art, however, some watches have appreciated even more than art. As a result, you have to honor the craft because let's face it, the baseline is none of us needs a mechanical watch. The time on your cell phone is the most accurate time you can get today, and yet we're willing to pay hundreds of thousands of dollars for a piece that takes up to two years to make—meticulously—by an artist that started their career when they were 14 or 15 years old to become a master watchmaker is a dedication of a lifetime.

And that's one of the things I do when I collect watches. I honor the art, and the makers know that I do that and give me access to the pieces. Watch collecting is a very complicated pursuit. It's about relationships and honoring brands, and collecting brands, and getting to be known within the community as somebody who's in it for the reasons that are long-term in nature.

When you got into the hobby or the passion, I may call it that, you didn't think about it as maybe buying your first Moonwatch as an investment item, did you?

No, I didn't. I just wanted that thing because I was such a— I was a bit of a science geek. That what the piece was was covered by all the space magazines and the journals of the time. There was no internet then, so you'd be running around trying to find the magazines and get a copy of it talking about the movement, the astronauts that wore it, how the watch worked. You know, it's a chronograph, I mean, and when I finally got that piece as my first piece, I was literally to the moon—figuratively hopefully one day literally as well.

But Kevin, watches have—well the high-end watches at least have gone up tremendously in value. I was actually at a dealer here in Vancouver. I was looking at some Omegas, just browsing, and they told me just in January they raised the price again. I think it's happened two or three times in the last year, every quarter or something, they raise the price by a little bit. It’s more than beat inflation, it's just outpaced everything else by a lot. Why the price inflation in Rolexes and Pateks and all the high-end, high-end watches that are hard to find? What happened in the last two years, Kevin?

Well, in the last two years, let's say on Omega as a brand, Omega was acquired by the Swatch Group, and generally when a giant behemoth luxury brand takes over a watch brand, that sometimes is not a good outcome for that brand. But in the case of Omega, it worked out because, as you know, they affiliated themselves with the James Bond brand and they brought out James Bond pieces that were very, very popular.

The quality of the calibers, the movements remained high, which is very important to collectors. Then you had this phenomenon of great dial design. In the last two years, Omega's watchmakers and artistry has really, really been cutting edge in terms of bringing forward the spark—the sports watch—and even the dress watch. They're not as much in favor for any brand; sports watches right now and the steel format is smoking hot, and Omega hit it in stride.

Then along comes the Snoopy, which just went viral. So when a brand gets a hit like that, it just pulls up the entire brand, and today collectors covet Omegas, particularly vintage Omegas. And also the Snoopy is a must-have in every collector's—it’s important. They're very, very hard to find, and I'm a very, very lucky guy because I'm well known as a collector, and I love to tell the stories of my watches. They know I don't resell them, so I'm able to call up the maisons and make my case, and I never ask for a watch for free. I want to honor the artist; I'll buy it, and I never resell it.

Well speaking of buying something, it’s difficult to buy a Rolex these days. You can't—very few authorized dealers will let you walk in unless you're Kevin O'Leary, I suppose. You have to have a waiting list of two to three years. What's going on with the supply there, Kevin?

So Rolex is one of the largest watchmakers in units supply. However, most collectors must have every Rolex: the Batman, the Panda, and it goes on and on and on. I want to—I happen to have, I went to, knowing we were going to be talking today, I went to the vault today and pulled some examples. Now, I appreciate it when you're a collector. The baseline is to own every Rolex, and I have that disease too.

So when Rolex brings out movements, there are some extremely coveted Rolexes. Right now, the hottest Rolex—first, let's start with the classic. This is actually the previous white face steel Daytona. It has the steel bezel, not the ceramic black—this is an extremely coveted watch, and it's no longer available. So you'd have to buy it vintage if you could get it. The appreciation of this watch is insane. However, this is baseline; you want one of these, and I'm very fortunate to have one.

However, if you want to take it to the moon, so to speak, and you want the most coveted Rolex in the world today, it's this.

Wow, what is that?

The Rainbow. Now the Rainbow—it's unknown how many they make; it's unknown how you get one. Everything's unknown about this other than most people have never held or touched one. It takes a long time to make because it’s got diamonds—all attired and encrusted diamonds that actually have the colors of the rainbow on it. So can you imagine how long it takes the jeweler to make this? And so it's got pavé diamonds on it as well as you see here, it's beautiful rose gold.

The reason this went crazy as a watch is the NBA players all want one. Now, I’ve been offered— you know, maybe this watch at retail is about $117,000 today; it trades at $550,000. Wow! So that gives you an idea of the appreciation. Would I sell this? Never. Even rarer than this would be what's called the Eye of the Tiger.

Now, yes, yeah, the Eye of the Tiger. You know, people should realize Rolex not only makes incredible watches and calibers; they have state-of-the-art jewelers. So with Easter factory now, a lot of people buy Rolexes and then take them out of the factory and jam diamonds all over them. That destroys the value; it kills the soul of the watch, makes it worthless to a collector like me. You want factory.

Now, these are blinged-out watches—perfect for me in Miami where I want to be flashy and trashy—and wherever I go people go out of their minds when they see these watches. But that gives you an idea of the appreciation you can get. And of course, they're part of my vast portfolio of Rolex vintage and current watches, and that's the baseline. Most people start with Rolex, but there are so many other ways to go and so many other brands you have to explore.

Just the Eye of the Tiger, for example, the one you just shown—how many of those are there in the world?

It's unknown. It's unknown. In order to be offered one, you need a relationship with a Rolex dealer. Rolex have to know who you are; you have to be known as a collector. You can go into the secondary market, but if you want to buy it retail, you have to be committed to the brand, and that's what really matters.

Let me ask you this, Kevin. I mean, there are companies—obviously Rolex is one of the most knocked-off brands in the world. Suppose I made a company—I'm not telling—I’m not saying I would, but suppose I had a company that replicates Rolexes to almost perfection. If I could hypothetically replicate something that you've just shown down to the nut and bolt, down to the movement, to the accuracy, would I be able to sell it for as much if the watch buyer knows that it’s a replica?

So it's been attempted many, many times, and where you see the error in the fault in the watch—let's just take—let's go back to the most ripped-off watch and the knockoff watch there is—it's the Eye of the Tiger and certainly the steel white-faced Daytona. These are two that are knocked off like crazy, and I won't even imagine one country they're done. They're never able to match the artistry of what the jeweler does on the dial.

I can take a lube and tell you right away that it's a fake. Now before you make a purchase like this anyways, you're going to get it authenticated, and even if you're doing it in the secondary market, you know the turnovers of the world—they provide authentication services. Because I don't—if I was going to buy this in the secondary market, I would want the original box, I want the paper, I want the provenance of the watch, and I want it authenticated for insurance purposes. So you know, knocked-off Rolexes are just that—they're knocked-off Rolexes.

I think what's far more interesting is what's being contemplated by the watch industry now is the NFT. Because you can take a scan of the dial of a watch down at the micron level; it's essentially its fingerprint. Attach it to an NFT and authenticate the watch in perpetuity with your cell phone by simply re-photographing it, matching it to the original scan and you’ll know it's the watch that was actually issued and manufactured. I'm very much involved in that process, and I funded a white paper on this we're working on right now to try and standardize the protocol of that NFT. I'm hoping to be, by July, have that thing worked out and be issuing NFTs and minting NFTs in the secondary market.

Some watch NFTs I've read have been selling for higher prices than the actual watches themselves. So if you’re doing this, Kevin, what’s your target audience? Who do you think would go in and buy a watch NFT?

So I'm a big believer in—let me tell you a problem that I have and most watch collectors have and many people that have watches have. Let's say you're a collector and you have many watches—your insurance bill is very, very high because you're basically insuring watches that are in a vault under a street in some city somewhere, even though you may only keep 10 or 20 with you at any one time.

I went to the vault today and pulled out a bunch of pieces so we could talk about it. When we're finished, I'll go back to the vault and put them back in. I only keep with me about 11 to 12 pieces a day, and so I wear three different watches a day—one for the morning, one for lunch, one for the evening. They all have red bands on them for television reasons—we can talk about that later. But the point is that I don't need to insure the rest of the collection, so if I had an NFT, I could simply open that up, send it to the insurance companies online, and say for the next 10 days I have 11 watches out. Bid me insurance on these; here’s the city I'm in, here’s where I’m going. So that solves a big economic problem.

Number two: Authenticity. If the NFT can authorize the watch and stay with it in perpetuity, that's absolutely fantastic.

Number three: Inventory control. Because I have watches in multiple cities, the NFTs could actually be where I move them from one vault to another, and they would always know with a single glance where the piece is and when it was last used. So the digitization of watches is definitely coming. In addition, the watchmakers—particularly watchmakers that make watches for less than a thousand dollars, where they make millions of watches—know nothing about their user base. They don't get any registration cards.

With the NFT, in order to authenticate and get the insurance, you would have to download their app, give them the information. All of a sudden, they know everything about their customer base, and they can make you offers based on the dial you bought, based on the style you bought, based on the price point you like. So there’s a huge economic incentive for the industry to get behind this, and I'm very proud to be part of the team that's pushing this agenda forward.

Let's talk about those red bands. I know you have a signature red band on your watches that you wear for Shark Tank exclusively. Do you buy them from, let's say, a third-party vendor? Would you go to the factory themselves and say, I would like a particular watch with a red rubber band on it? Because sometimes these watches have braces built into the case, so it's probably even difficult to take off the original bracelet. Is that—not how does that process work?

So the majority of the watches that I buy today are one-of-a-kind made for me, so the maison makes the red band. I'm extremely fortunate, but I feel I've earned it over the 30 to 40 years I've been collecting watches. They know who I am; they know what I do; they know why I need a red band. So that Snoopy, for example, that will be a factory red band with the actual Omega clasps on it—maybe it’s the only one in the world, I don’t know, but it’s going to look terrific in season 14 of Shark Tank.

But on top of that, there are many makers that don’t have red bands. So I work exclusively—and I have no economic interest in this company and I don’t own any shares—but I’ve done so much research because when you put a third-party band on a watch, the integration with the case—and I’ll give you an example. Let me find one here.

Let me give you an example; this is a Jumbo Audemars Piguet—an AP. This is one of the most coveted APs ever made, the classic. Now, AP does not make a red band for this. No. So this band is from a company called Rubber B, but AP knows that I wear advanced—they gave me an integration kit, and Rubber B makes such a perfect integration that there’s no space between the rubber band and the actual case. And so I have these steel lugs that makes that possible.

This piece with a red band and a blue face looks absolutely spectacular. I've worn it on Shark Tank many times, but the point is, Rubber B is a Swiss company; they're headquartered here in Miami. They make the best integrations ever for Rolexes, for all kinds of watches—AP, Patek, you name it. And so they actually have a very, very fine molding system that gives you this incredible integration that you're seeing here.

And so I work exclusively with them, but every piece I have has a red band. And so even a Patek Philippe, this is a World Timer. This is probably a very, very special piece—an anniversary piece of 175th anniversary of Patek. It's particularly renowned for the black dial on it, which is just incredible, and now it has a red band. Again, a masterful make by Rubber B that allows me to wear this on Shark Tank.

And I'll say this: If a maker does not like me having a red band, I will say to them, "Look, I’ll only wear it on Shark Tank today because I have to have continuity," and I will take it off after that. Vacheron—this is an incredible piece. You can see this is a factory red band because it's got the vegetable clasp on it. This brand is really moving up the feeding chain in collectibility right now. They're one of the ones that was being held back the last two years, and now they've exploded to the upside.

Well, I want to spend a few minutes talking about brands now. Kevin, you brought up some of the ones that I want to talk about: Vacheron, AP, Patek. Why are these three called the holy trinity? Why are they so revered?

Desirability, history, the fact that they've been watchmaking in some cases for over 150 years. The unique designs of them are important; it is very rare for a watch company during the lifetime of the founder to reach a coveted status of collectibility. And yet there has been a brand in the last 22 years that's achieved the same status as a Patek, an AP, a Rolex, even though the company only makes 12,000 watches since the beginning of time—900 a year—and there's never been a story like it.

It's FP Journe, a French national who moved to Geneva, who makes watches that are so coveted that 87% of the new pieces are owned by the collector base. They are rabid to get those watches, and the appreciation on these pieces in the last three years has exploded. I'll show you one that used to be the entry level, Le Bleu; it's called this incredible blue dial—this unique blue dial.

Sixty percent of these dials when they're manufactured are rejected by FP Journe's quality control, so it's very expensive to make. The dial can be blackly blue. The metal is tantalum, which is a beautiful gray. Again, it has the red band factory for me, but what happened to this watch a few years ago—the entry price was $28,000.

The rumor has it—and I love the rumor mill around watches—Putin was seen wearing this on his wrist, and the value of this watch exploded. Now it's $128,000, but you can't get one, right? And Teddy Balazer did a great video; I encourage everybody to go see it. He talked about the heritage of this piece. When I wear this piece, I get stopped in the street. This style is all about creating conversations. It's so unique, and yet it was an entry-level Journe; it just—it was one of his most inexpensive pieces, but the brand has exploded, exploded.

That's what's happened.