Expensive Covers

Every so often I’ll run across a story about a new consumer product that seems excessively expensive for its ostensible purpose – we’ve seen examples such as a $100,000 safety razor, a $200,000 bottle of scotch, a $40 bottle of water, and so on. Earlier this month I brought you the story of the Panda Tea, and the $2,000 an ounce price tag slapped on it because the tea plants are fertilized with panda dung instead of more common chemical and animal by-products. Some of these are signs of wretched excess (there’s no real justification for spending $40 for a liter of water just because you can) while others do offer value to the customer, if only for a specific definition of “value” (for all I know, the $200,000 bottle of scotch might actually be that good; I don’t drink alcohol anymore, and I don’t like scotch anyway). Where this category of consumer goods gets really interesting is when we consider products that will actually appreciate in price – despite the fact that they don’t appear to have any real value in the first place…

Consider, for example, the Richard Mille RM56 watch as featured on the Born Rich website and described on the Gizmodo news page. What distinguishes this time piece from a Rolex or other super-luxury watch is the fact that the entire housing has been carved from a single piece of clear sapphire crystal, allowing the observer to see all of the tiny gears and part of the mechanism. Well, that and the fact that this watch comes with a price tag of $1,650,000 USD. It’s an intricate piece of work, of which only five are being offered for sale; there’s no question that the mechanism is some of the finest in the world, or that it’s incredibly difficult to carve anything out of pure sapphire crystal. That doesn’t change the fact that for that price you could purchase a basic Rolex for 500 or so of your closest friends (or one of the really showy Rolex models for 100 of your closest friends) at that price – or for that matter that you could purchase houses for ten of your closest friends here in Lansing, Michigan for what they’re charging for this watch. But what is truly mind-blowing is that it might not be a bad investment…

A recent article in Businessweek discussed the increasing interest in luxury watches as an investment, much like art or jewelry. As with most other collectibles, it’s important to select the right ones to invest in, but the rare and exotic tend to be the best choices – and it’s hard to be rarer or more exotic than a run of only five examples, each carved out of single pieces of sapphire crystal. If the author of this article is correct, it’s possible that this watch could appreciate several times over, assuming you’re willing to hang onto it over a period of a decade or two. In fact, it would appear that such investments aren’t even that unusual; Sotheby’s and Christie’s both have departments that specialize in watches and hold regular auctions of collectible items. It may seem a little odd to non-collectors, but it’s hard to imagine why this would be any different from purchasing baseball cards, ingots of specific metals, or ownership shares in publicly-held companies for the same purpose…

I’ll admit that when I first saw this article, I just thought it was another case of wretched excess – people paying more for a watch than the average American will earn in a lifetime, just to show off how much disposable income they have. And it’s possible that somebody will, of course; we’ve seen people paying much more than that for consumer products with much shorter service lives in recent years. But assuming that all such purchases are made merely to flaunt someone’s wealth is just another case of judging a book by its cover – a very expensive cover, in this case, but still…