The Deal of the Century – Paul Newman’s $17.8 Million Daytona

Dear Friends,

As many of you may know, Paul Newman’s own Rolex Daytona “Paul Newman” recently broke all records to become the most expensive wristwatch ever sold at auction. Selling for an incredible $17.8 million at Phillips’ WINNING ICONS: Legendary Watches of the 20th Century event in New York City, the final hammer price certainly did not disappoint.

The Deal of the Century – Paul Newman’s $17.8 Million Daytona

Rolex has gained steady momentum in the vintage watch space over the last decade. When I attended a NAWCC training last year, there was much talk about Rolex taking over Patek Philippe’s position the top investment watch brand. As a result, many saw great opportunity to develop plenty of training programs focused exclusively on Rolex watches—identifying counterfeits, spotting vintage Rolex trends, and so on.

Rolex’s main disadvantage compared to Patek in the vintage market is sheer production numbers. Rolex has always produced their luxury watches in large quantities while Patek has always maintained limited production. Therefore, using standard economic principals, it’s generally accepted that lower supply coupled with high demand increases prices—thus Patek watches have typically offered better a return on investment than Rolex watches. Yet, it seems that hype is successfully swinging the pendulum in Rolex’s favor.

The Deal of the Century – Paul Newman’s $17.8 Million Daytona

Right now, there’s plenty of demand for vintage Rolex watches, and collectors—even newer ones—have more specific wants for references such as a Submariner ref. 5513 with meters first, a GMT-Master with a Pepsi bezel, Daytona watches powered by Zenith movements, and the like. And, of course, in a market where there is so much demand, there are, unfortunately, dishonest participants looking to take advantage of the less knowledgeable by selling below par, modified, or even outright fake vintage Rolex watches. I’ve always maintained that rather than looking for the lowest prices, it’s always safer to pay a premium to deal with reputable sellers who are equipped with the necessary knowledge and experience.

Given the breathtaking selling price of Paul Newman’s Rolex Daytona “Paul Newman” and the massive momentum in the vintage Rolex market right now, it begs the question, why? Why $17.8 million? Why are vintage Rolex watches skyrocketing in value? Why is Rolex projected to overtake Patek Philippe in the vintage market despite the vast differences in scarcity (not to mention Patek watches are typically more complicated than Rolex watches too)? And let’s not forget, that $17.8 million price beat out the previous most expensive Rolex watch sold at auction, the $5 million Rolex ref. 6062 “Bao Dai,” which sold just a few short months ago in May 2017. It also beat the previous record holder of the most expensive wristwatch, the $11 million Patek Philippe ref. 1518

Perhaps Rolex took a page out of Patek Philippe’s book? It’s no secret that the Patek Philippe company regularly buys back important Patek Philippe references from auctions to display at their museum in Geneva. And while Rolex does not currently have a public museum (who knows what’s behind the walls of one of the most secretive brands in the world), it wouldn’t surprise me if Rolex has decided to purchase from high profile auctions to keep values up and interest high in the vintage Rolex market. It would be a clever short-term strategy but it could very well lead to an eventual bubble burst.

The identity of the person(s) who shelled out almost $18 million for Paul Newman’s Rolex Daytona remains unknown. We may never know who it is, but one thing is for certain, that historic sale has added even more fire to the already very hot vintage Rolex market.