The World's Most Expensive Watches

March 5, 2008— -- Evan Zimmermann loves watches. He's so passionate about horology, in fact, that four years ago he quit his day job as a lawyer and became the managing director of New York's Antiquorum, the largest watch auction house in the world. Now, immersed in the world of watches, Zimmermann, 40, can keep an eager eye on rare timepieces as they become available to add to his constantly evolving personal collection.

"I used to represent the auction house as a lawyer," says Zimmermann. "But when I realized that I preferred to be around people talking watches at the Antiquorum offices than practicing law, I knew it was time to make the switch."

Zimmermann collects vintage Rolex sports models from the 1950s and '60s, which were among the first watches created for use in specific recreational pursuits. Classic and simple in style, the Rolex was considered the first truly waterproof, air-tight sport watch back in 1927 after Mercedes Gleitzes wore it during a 15-hour swim across the English Channel and it kept ticking.

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"Most collectors have a niche," explains Zimmermann. "Whether it's a specific brand or era, you have to narrow down your collection to have a truly focused search. Having too broad a criteria makes it too easy to find watches, and the whole excitement of collecting is in the hunt."

Zimmermann bought his first Rolex at an auction eight years ago. He paid $1,500 for a 1954 Rolex Submariner, made collectible because the word "Submariner" was written on the dial in red. Rolex later wrote the name only in white, making the red ones a rare find. Were he to sell it today, he anticipates it would fetch $15,000.

Nowadays he spends considerably more. His most recent acquisition was a Double Red Sea Dweller model 1665, bought at a Miami watch show for $20,000. This is one of three or four watches he plans to buy this year.

The joy of the chase--he once flew to Japan to inspect a watch at the airport, then caught the next flight home--is only part of the thrill. Unlike collectors of, say, rare coins, Zimmermann actually uses his collection on a daily basis. And when he gets it right, his hobby is a smart investment.

"Over the past few years, prices for this specific watch category have increased dramatically," says Zimmermann, who estimates that his Rolex watch collection has increased in value at about 15% per annum. But certain pieces have done much better--some of his watches have tripled in price in less than a year.

"No other watch has experienced the kind of phenomenon that vintage Rolexes are going through right now," says Robert Maron, president of the eponymous Robert Maron Inc., the largest watch dealer in the U.S. "Still, nothing has performed as well as Patek Philippe over the long term. Patek is a safe and proven investment-quality watch that in the last 20 years has only seen increases, while Rolex values have bounced around."

He points out that a Rolex 6542 that sold for $3,500 five years ago trades for $65,000 today--an increase of 18.5 times. Compare this to a Patek Philippe 1518 that a few years ago traded for $185,000 and is now worth up to $500,000 with only a three-fold increase. Still, by our estimates, the 10 most expensive watches ever sold at auction were all made by Patek Philippe.

Maron adds that other collectible brands, such as Audemars Piguet and Lange, also have a few select models that have generated tremendous returns on investment, but he says those models are few and far between. Rolex and Patek, on the other hand, have hundreds of models that have seen--and likely will continue to see--significant increases in price.

Of course, watch collectors do need to remain on guard for bum investments. Zimmerman himself has been burned. A watch he purchased over the Internet had a repainted face--a major faux pas in the vintage world that can cut the value of a watch in half.

"Originality is imperative," explains Zimmermann. "If its face, hands or case have been altered in any way, even polished, it's far less desirable."

With prices surging and demand increasing, auction houses are seeing opening bids in the $15,000 to $20,000 range for many Rolex watches. Newcomers, or those with smaller pocketbooks, should look at cheaper buys, like watches made by Longines or Omega chronographs from the '30s and '40s. Collectors interested in more contemporary pieces might want to check out F.P. Journe. Journe makes handmade watches in very limited numbers.

In addition to attending watch shows worldwide and monitoring sales at auction, Zimmermann spends at least two hours a day on Timezone.com, a popular Web site for watch enthusiasts. With over 20 forums in different brands, eras and styles, collectors can anonymously connect with other like-minded people; ask questions, seek advice and share pictures of their latest buys. Using screen names such as KeeperOfTime or RolexMan, they post photos of the watch they are wearing every Friday.

No. 1 on his wish list is a Rolex Comex 1680, a watch created specifically for a French deep-sea diving company in 1978. With only 50 models made, many that have been altered and the dials changed, there are very few authentic "survivors." In fact, Zimmermann says that in Antiquorum's 34-year history, this timepiece has never come up for sale--until this year. He's keeping his eye on the one that has popped up, which will be auctioned in April. But with the price expected to reach at least $250,000, he thinks he will be outbid.

With such extreme prices, how do collectors of relatively modest means continue to grow their collections? Zimmermann explains that collectors generally trade in and trade up.

"I have a wish list for specific, rare watches that I know I would try to buy if they emerge in the market," he explains. "But I also have a second list for watches in my collection that I'd be willing to part with and trade in when something better and rarer comes to the surface."