Formula 1 legend Michael Schumacher has a trophy collection that rivals any pro athlete.
During a storied career racing for top teams like Ferrari and Mercedes, he won seven World Drivers’ Championships, and held records for the most wins (91), the most pole positions (68), the greatest number of podium finishes (155), and the number of fastest laps (77).
All those wins add up to a lot of trophies — and a lot of bling.
But if you ask me, his collection of trophies pales in comparison to a collection of something else he built over the years.
Today, I’ll tell you about this other collection of his — and explain why it could potentially help you beat the market by 117%.
The $4.41 Million Star of the Show
A fast-paced and competitive international event took place in Geneva, Switzerland last week…
But it wasn’t a Grand Prix.
Instead, it was the “Rare Watches” sale at auction house Christie’s.
The star of the show?
Eight of Michael Schumacher’s watches, which sold for a whopping $4.41 million.
Let me show you two of these beauties…
Two Sweet Christmas Presents
The first is a Platinum Vagabondage 1 by F.P. Journe, a famous watchmaker based in Geneva.
Jean Todt, the former CEO of Ferrari and Schumacher’s former boss, commissioned the watch as a Christmas gift for Schumacher in 2004, and had it engraved with a personal dedication.
The “tonneau-shaped” watch is one of the earliest examples of the Vagabondage 1, which wasn’t commercially available until 2006. The watch doesn’t have a conventional hand that sweeps around the dial. Instead, it features a “jumping” hour: you can see the hour displayed through an aperture — it “jumps” at the start of each hour.
This custom-designed piece features a red dial with symbols representing Schumacher’s seven world-championship victories, his racing helmet, and the Ferrari logo.
The second watch I’ll show you was also a Christmas gift from Todt — a white-gold Audemars Piguet Royal Oak chronograph:
On this beauty, you can see:
- Ferrari’s logo — a prancing horse — on the subsidiary seconds dial.
- The number “1” on the 30-minute register encircled by six stars, which symbolizes Schumacher’s six world-championship victories from 1994 to 2003.
- His red racing helmet on the 12-hour register.
Clearly, these time pieces are beautiful, and they probably do a decent job of keeping time. But how are they worth $4.41 million?
An Alternative to Stocks and Bonds
To explain, let me start by telling you how most people invest.
Most folks stick with stocks, bonds, and ETFs. If they’re adventurous, they’ll add some bitcoin.
But the rich invest differently. And this difference might explain why they keep getting richer.
You see, according to recent research from Motley Fool, the rich mainly invest in “alternative assets.” What are these alternatives? Well, for starters, they include private startups and private real estate deals — the kind we focus on here at Crowdability.
But they also include “collectibles” like art, baseball cards, and you guessed it, watches.
As of 2020, the wealthy held about 50% of their assets in these alternative investments, and just 31% in stocks. The remainder was in bonds and cash.
Why would they do such a thing? Let’s take a look.
Three Reasons the Wealthy Invest in Alternatives
For starters, investing in alternative assets provides diversification. So even if the stock market crashes, these assets can keep growing in value.
Furthermore, they offer a hedge against inflation. In inflationary times like we’re in today, that’s a valuable trick.
But perhaps most important of all, they can provide market-beating returns.
For example, over the last 25 years, early-stage startup investments have delivered annual returns of 55%. That’s about 10x higher than the historical average for stocks.
And meanwhile, according to the Motley Fool, over the last decade:
- Wine has shot up 127% in value.
- Classic cars have gone up 193%.
- And rare whisky is up an astonishing 478%.
Watches, meanwhile, are in a league of their own…
Watch Me
Vintage watches can sell for many millions of dollars.
For example:
- A Patek Phillipe Stainless Steel Grand Complications sold for $7.2 million. Recognized as one of the most impressive editions of the Grand Complications series — it has a “Tourbillion,” a calendar with moon phases, and a Minute Repeater — it sold at auction for 10x its lowest estimate.
- A Rolex “Paul Newman” Daytona sold for $17.7 million. Manufactured in 1968, the watch was a gift to Paul Newman from his wife. It features a unique dial design, with numerals for its seconds track matched to its sub-dials.
- A Grandmaster Chime from Patek Phillipe sold for a whopping $31 million. It was designed for Patek Phillipe’s 175th anniversary. It took seven years and over 100,000 hours to create. It’s the most complex Phillipe watch ever built, and it features a special inscription, “The Only One.”
But let’s forget about these data points for a moment and just look at the averages:
On average, over the last 7 years or so, the luxury watch market has outperformed the S&P 500 by a whopping 117%. Check it out:
Three Ways to Invest in Collectible Watches
The thing is, as investors, the key to making money in this market is getting access to unique watches before they become valuable — and for just hundreds or perhaps thousands of dollars instead of millions.
Over the years, I’ve introduced you to websites like Rally, where you can invest in various collectibles, like watches, for as little as $100 or so. And when the item sells in the future, hopefully at a substantial profit, you’ll receive your share of the proceeds.
But today, I’ll like to introduce you to website that focuses exclusively on watches.
Introducing: Elephants
Elephants is a startup from Switzerland where you can buy shares in valuable watches.
Here’s what makes it special:
Data Focused. Rather than going with a gut feel, the company uses data to identify the best investments. As the company noted, “We are passionate about watches, but fully rely on data and quantitative analytics.” That’s why it provides users with dynamic-pricing information, proprietary analysis, and trend information.
Security Focused. The company is also deeply focused on security. All of its assets are authenticated, stored in secure vaults in Switzerland, and insured.
Open to All. Anyone can buy a fraction of one of its watch investments. Non-accredited investors are welcomed, as are international investors.
Beware!
Keep in mind, all the typical caveats about investing apply here:
For example, don’t invest more than you can afford to lose; invest in what you know; and be sure to dip your toe into the water before diving in.
Furthermore, many alternative investments like watches or wine aren’t entirely liquid. That means they can’t necessarily be converted into cash at the snap of your fingers.
So don’t invest your rent or grocery money into these offerings.
But if you’re looking to invest in collectible watches like the ones from Michael Schumacher’s private collection, platforms such as Rally and Elephants are a great place to start!
Happy Investing.
Best Regards,
Founder
Crowdability.com
