Way back in 2012, John Mayer wrote an article for a young Hodinkee titled “The Five Best Buys in Vintage Rolex for $8,000 or Less”. It was a fine article with a lovely premise: you don’t need to be rich like John Mayer to own a desirable vintage watch from the Crown.
Well, 2012 was a much simpler time. John Mayer’s collection has grown up, as has the vintage watch industry as a whole. Let’s take a look back at John’s list: if you had invested in his portfolio of five vintage Rolexes, how would you have made out over the ensuing seven years?
For the inflation nerds out there: $8,000 in 2012 dollars is equivalent to about $8,900 in today’s dollars. The cumulative inflation rate over the seven-year period has been 11.5%.
First, let’s take a look at what he recommended and the price range he cited for those watches.
1. Rolex Explorer Reference 1016. John’s price: $6,000 to $7,000
2. Rolex Datejust Reference 1601 in 18k gold. John’s price: $7,500 to $8,000
3. Rolex Submariner Reference 5513. John’s price: $5,500 to $7,000
4. Rolex GMT Master Reference 1675. John’s price: $5,500 to $6,500
5. Rolex Explorer II Reference 16550 (Black Dial). John’s price: $4,500 to $5,500
Here’s where I should stress: condition is everything when it comes to vintage. Spring for the best conditioned watch you can find. If your budget is $5,000, don’t buy some shitty Reference 1016 you find in the depths of eBay International because the 1016 is your “grail.” Instead, buy a prime example of another watch — a nice mid-century chronograph, in this case, as an example. Good examples of popular watches are rising (and will continue to rise) in value. Shitty examples of popular watches are not rising in value, and the gap between these two is only widening.
1. Rolex Explorer Reference 1016
Throughout this article, we won’t dig too much into the nuances of collecting vintage Rolex, but suffice it to say that prices can vary widely based on condition, provenance, and all the subtle details that Rolex collectors take very seriously. The Explorer Reference 1016 is no exception: early gilt dial examples can fetch $30,000, while the later matte dial examples still fall in the $15,000 to $20,000 range. Prices for a decent, honest example seem to average out in the $18,000 to $20,000 range, a nice 2x return on John’s 2012 cited price of $6,000 to $7,000.
2019 estimate: $18,000 to $20,000 (take these estimates with a large grain of salt, as prices vary widely in the vintage market based on condition, provenance, etc.)
Est. investment return: 200%
2. Rolex Datejust Reference 1601 in 18k Gold
Of this watch, John wrote: “Something about the gold mixture 30 years ago was more a subdued brassy color than the bright luster of new 18k watches. And with the price of gold where it is, you’ve got two investments in one.” Well, it turns out a stainless steel Rolex sports watch (see e.g. Explorer Reference 1016 above) has been a much better investment over the ensuing seven years (and, by the way, gold is up only about 50% over the past 10 years, far from the best investment over that time period). Call it the Paul Newman halo if you want. For example, Theo & Harris seem to be fans of the Datejust (listen to his YouTube channel for more than 2 seconds and he’ll tell you about it) and its various 16XX references: as I write this, they’ve got an 18k gold one in their shop for $6,750, under Mayer’s 2012 range of $7,500 to $8,000. It’s not uncommon to see them even cheaper than that. Turns out the past seven years has not been kind to gold watches.
2019 estimate: $7,000
Est. investment return: -10%
3. Rolex Submariner Reference 5513
This watch has certain had a better 7 years than just about any other watches out there. The Submariner Reference 5513 was in production from 1962 until 1989, so examples abound. It’s also mentioned in the same breath as its sibling, the Reference 5512. In general (and there are exceptions), the Reference 5513 is the non-COSC-certified version, meaning the movement went through less rigorous testing and the dial will thus lack the familiar “Superlative Chronometer Officially Certified” text at 6 o’clock. Prices for a prime example of a Reference 5513 can stretch much higher, but you should still feel comfortable finding a legitimate, honest example with around $15,000 in your pocket, well above the $5,500 to $7,000 Mr. Mayer cited.
2019 estimate: $15,000
Est. investment return: 125%
4. Rolex GMT-Master Reference 1675
Like the Submariner and Explorer, there are nuances aplenty when it comes to collecting vintage Rolex GMTs. There are gilt dials and matte dials; if you can find a Pepsi bezel that’s aged in a cool or unique manner, more power to you. Like other stainless steel sports watches, the GMT-Master has boomed since Mayer highlighted it in 2012. Interestingly, he highlighted it as an alternative to the Reference 1655 Explorer II, which was trading well above the $8,000 limit he set for himself for this exercise. Well, no more. The 1675 has reached roughly the same popularity (and price level) as the Reference 1675. Similar to the Submariner Reference 5513, prices vary, but a good example can be had for around $15,000.
2019 estimate: $15,000
Est. investment return: 150%
5. Rolex Explorer II Reference 16550 (Black)
Finally, Mayer highlighted the black dial Reference 16550 as an alternative to the popular white dial version of the same reference. While the white dial version has taken off in popularity in price because of the beautiful, creamy patina it takes on (by the way, is the Reference 16570 Explorer II the next iteration of the ‘Polar’ hype?), the black version had seen no such appreciation in 2012. Well, it turns out seven years hasn’t made much of a difference. Mayer cited a price of about $5,000 in 2012; nowadays, the black dial Reference 16550 can still be had for about $6,000.
2019 estimate: $5,500 to $6,500
Est. investment return: 20%
So, if you bought a basket of Mayer’s recommended Rolexes in 2012, how would they have faired from an investment perspective? Well, you would have benefitted from the boom in stainless steel prices, with the Explorer, Submariner, and GMT-Master all experiencing nice returns. Meanwhile, the gold Datejust has been left behind, and the Explorer II Reference 16550 hasn’t partaken in the gains from the sports watch craze.
All in, you would have experienced returns of about 95% over the seven-year period had you invested in each of Mayer’s five recommended watches. It sounds pretty good, until you learn that the S&P 500 was up 114% over the same seven-year period. So yes, vintage Rolex has been a nice investment over the past few years, but so has the market.
Either way, it’s clear that Rolex prices have risen substantially in the past few years. Perhaps $15,000 is the new threshold amount for vintage Rolex, as $8,000 was back in 2012? Or perhaps Tudor is the new Rolex and $8,000 can get you a hell of a vintage Tudor? Perhaps we should write a follow-up article on the “Best Buys in vintage Tudor for Under $8,000”? Stay tuned.
But, this is a gentle reminder that watch prices are rising because all investment classes are rising. Sure, buy because watches might be a decent store of value, but that shouldn’t be your primary motivation.
The S&P 500 over the last 7 years