Getting Your “Fair Share” of the Hard Asset Pie

Getting Your "Fair Share" of the Hard Asset Pie

We all want our fair share in life.  Unfortunately, with the onset of the greatest financial disruption since the Great Depression I suspect that getting your fair share will become increasingly difficult in the years ahead.  But there is still a small window of opportunity remaining – a period of time when the increasingly debased dollars in your bank account haven’t quite caught up to the reality of the extreme scarcity of most tangible assets.

You see, the world is currently awash in financial assets.  There are more equities, bonds and real estate securities in existence today (as measured by dollar-denominated value) than at any other time in human history.  And the growth rate of these financial assets has been absolutely stunning over the past several decades – a classic exponential curve.

In contrast, hard assets in the real world – things like precious metals, antiques, gemstones and fine art – have only experienced linear growth.  This makes them quite rare when compared to financial assets.

How rare?

That’s something I wanted to find out.  So I asked myself a hypothetical question.  What if everybody tried to get their “fair share” of hard assets?  In other words, what if we split the world’s supply of tangible assets evenly among the total world population?  How much would there be per person?

But let’s assume for a moment that we only care about the richest 10% of the global population.  Why do I make this distinction?  Because poor people, regardless of whether they live in developed or emerging markets, have a very limited ability to invest in anything.  They will almost certainly not get their “fair share”.  As unjust as this sounds, it is the truth.  Only the world’s middle class and wealthy have the means to realistically protect themselves financially against the coordinated central bank debasement that we now face.

Taking the richest 10% of the world corrects for this situation.  So it is only this select group that I will divvy up the world’s tangible wealth among in the calculations below.  But don’t worry.  It is actually much easier to make it into the world’s richest 10% than you might think at first.

As of March 2020, the world’s population reached 7.8 billion.  According to investment bank Credit Suisse’s 2019 Global Wealth Report, it takes a net worth of just under $100,000 (including primary residence) to belong to the richest 10% of the global population.  The people who fit this description are the usual suspects – many North Americans, Western Europeans and Japanese, along with China’s rising middle class.

So how much is your fair share of the world’s hard assets?  Read on to find out!

It is estimated that the total stock of above ground gold is around 170,000 metric tons, or 5.5 billion troy ounces.  This king’s ransom represents about 90% of all the gold humanity has mined throughout history.  This is due to the fact that gold is almost always recycled and, therefore, never truly lost.

If we divide this massive gold stash evenly among the richest 10% of the global population (780 million people), we come up with a modest per person “fair share” of 7 troy ounces each.  At the current spot price of $1,800, this amount of gold would only cost you $12,600.

The numbers for silver are even more shocking.  Although estimates vary widely, if we (generously) assume that there are perhaps 1,360,000 metric tons of silver stockpiled in the world today, it would translate into just 56 troy ounces for each of the world’s wealthiest individuals.  Even with today’s usurious premiums on physical silver bullion ($22 an ounce, delivered), your fair share would cost a paltry $1,232.

And if you thought the numbers for silver were nuts, just wait until you hear how rare platinum is!  We can safely predict that there are no more than 12,000 metric tons of platinum in the form of bullion, jewelry and scientific equipment in the world.  If we split this (probably overestimated) amount evenly among the world’s richest 780 million people, we would come up with a scant 1/2 troy ounce per person.  Even when paying an elevated premium over spot to acquire physical metal, your fair share of platinum would only cost you $500 to $600 today.

But what happens when we move beyond precious metals?

Here’s a hint.  Antiques are just as rare as gold and silver, if not more so.

For example, numismatic experts believe that up to 65 million of the iconic U.S. Morgan silver dollar have survived in mint state condition.  Perhaps a slightly smaller number of U.S. silver Peace dollars are also extant in mint state.  These U.S. silver dollars were struck in massive quantities, making them relatively common today.  They are so common, in fact, that there is probably the same number of Morgan silver dollars as there is old foreign silver crowns (silver dollar-sized coins) in existence.  Some well-known examples of foreign silver crowns include the British crown (a pre-decimal 5 shilling piece – last struck in 1937), the French 5 franc (last issued in 1871), the Mexican 1 peso (last minted in 1914) and the Japanese 1 yen (also last struck in 1914).

So let’s assume that we divide the world’s estimated supply of mint state U.S. silver dollars and foreign silver crowns equally among the world’s wealthiest 10%.  That would be 65 million Morgan dollars plus maybe 40 million Peace dollars plus another 65 million foreign silver crowns for a grand total of 170 million coins.  These are probably excessively kind assumptions about the surviving populations of large silver coins, but we’ll use them anyway.

Once we divide our 170 million coins among 780 million people, we find out that your “fair share” is only about 1/5th of a coin.  Of course, we can’t split a coin into fractions and still have it retain any numismatic value.  So about 78% of the wealthiest 10% of the population will never, ever get their fair share here.  This is in addition to the poorest 90% of the population who will also get a big goose egg.  Only 1 in 5 middle class/wealthy individuals could possibly have the honor of owning one of these impressive pieces, representing about 2.2% of the total global population.

And the price tag?  A mere $50 or $60 will get your foot in the door with a PCGS or NGC certified mint state Morgan silver dollar.  For those interested in learning more about this subject, please read my beginner’s guide to investing in slabbed Morgan silver dollars.

It is insane to think that rare coins have been so devalued in the modern age that $50 is enough to buy an entry level investment grade example.  But it is completely true.  And coins aren’t the only category of tangible asset that has been neglected during the raging paper asset bubbles of the past decade.

Vintage watches are also incredibly undervalued.  These include pre-1990 watches from world-renowned brands such as Rolex, Omega, IWC, Hamilton and Longines, among others.

A quick search of eBay reveals that there are approximately 40,000 vintage watches for sale on the platform at any given time.  Now I’ve tried to filter out examples that I consider uninvestable.  This means I’ve excluded parts watches, quartz watches and gold-filled or gold-plated watches.  If we conservatively guesstimate that the remaining 40,000 specimens for sale on eBay represent just 0.1% – 1/10th of a percent – of the surviving vintage watch population, it means that there are around 40 million old collectible watches out there.

It seems like a lot of watches, right?

Wrong.

If everyone in the global middle class wanted to own just one of these horological treasures, we would quickly discover that only 1 in 20 people would have their wish fulfilled!  High quality vintage watches, like most hard assets, are obscenely rare.  Yet $500 to $1,000 will allow you to choose from a wide range of desirable examples.  $1,500 to $3,000 will get you a superlative solid karat gold dress watch or complication-laden sports watch from some of the finest manufacturers out there.

So what is going on in the world?  How can hard assets that are so scarce be so cheap right now?

I have a theory on this.

In my opinion, the financial authorities have spent the last 30 years striving to answer a question that nobody asked.  What if everything that humanity once held in high esteem – precious metals, gemstones, antiques, fine art – was suddenly ignored and treated as though it was worthless?  It is a bizarre sociological experiment doomed to end in tears.

So why would the central bankers even attempt it?  That, at least, is somewhat easier to answer.  If everyone is chasing paper assets instead of tangible assets, it gives the world’s monetary authorities unprecedented control over the global economy.  At least while it lasts.

But the outcome of this perverse experiment has been surprising.

The value of hard assets didn’t drop to zero as the central planners had hoped.  Instead, they stubbornly maintained a bid – albeit at reduced prices – in a financial world madly obsessed with worthless unicorn IPOs, securitized junk debt and exotic derivatives.

Now the pendulum is slowly but surely swinging the other way.  This threatens to destroy the fake economy that the world’s central bankers have so painstakingly tried to build.  Your only protection is to diversify your portfolio into hard assets – precious metals, antiques, rare coins and other tangibles.  It is imperative that you get your fair share of these undervalued assets while bargain pricing still abounds.

 

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2020 Antiques Market Update

2020 Antiques Market Update
Photo Credit: Tom Hilton

2020 has been an eventful year in the antiques market.  Hell, 2020 has been an eventful year in just every other market too.  As we all know, the coronavirus pandemic struck a major blow to the global economy.  Of course, the real problem wasn’t the artificially induced economic standstill – an unintended side effect from the lockdowns meant to control the spread of the virus.  Instead, it was the fact that this act radically destabilized the “Everything Bubble” that had pervaded the global securities markets for nearly a decade.

We currently are in the midst of the knock-on effects from this historic (and ongoing) economic debacle.

To say the 2020 antiques market has been tumultuous is an understatement.  We are seeing a plethora of cross-currents pulling the market in different directions simultaneously.  The situation is, to put it mildly, confusing.  But I’ll try to untangle some of the 2020 antiques market trends that I’ve been seeing.

First up, I want to talk about the bullion market.  This might seem a like an odd topic to bring up when talking about antiques, but precious metals are a major component in many fine vintage items (particularly those that are considered investment grade).  So it is quite pertinent, in my opinion.

Well, the precious metals market experienced a massive shortage starting in March of 2020.  Silver, gold and platinum coins and bars disappeared from both physical and online coin dealers, shooting premiums through the roof for any remaining inventory you could find.  Even as I write this in July 2020, the bullion market has not yet fully recovered from its annus horribilis.

This feeds into our first 2020 antiques market trend: rising prices for old gold and silver coins – but only in the low-end of the market.  This means that worn or common collector coins that sell primarily based on the value of their contained gold or silver have risen with the strong bullion market.  But, paradoxically, better date or higher grade coins that typically sell for high premiums over their melt value have tended to stagnate or even decline slightly in price.

So for example, I purchased a pair of common date Morgan silver dollars in decent circulated condition for $43 from eBay in February 2020.  Fast forward to today (July 2020) and the exact same eBay seller is listing very similar Morgan silver dollars for $57 a pair.  That is a price increase of over 32% in just a few months!  And people are willingly paying that new, higher price too.

But if you take a look at slabbed common date Morgans in MS-63, MS-64 and MS-65 conditions – classic collector coins – you will find that prices have barely budged from earlier this year.  In other words, it costs more to get into the low-end of the coin market while better condition coins languish due to the economic apocalypse.  It also means that a relatively small step up in price will often get you a dramatically better piece.

Antique sterling silverware has also been plagued by similar tendencies to the coin market.  Premiums on sets of sterling flatware have been trending downward for more than a decade now, but prices have ultimately been supported by the underlying scrap value of silver.  Only desirable makers and patterns garnered continued interest and strong bids during this period of decline.  But during the chaotic 2020 antiques market, premiums on sterling flatware and hollowware have more or less collapsed.

Whereas before sets of silver from renowned luxury makers such as Tiffany & Co. or Puiforcat were still able to reliably command high prices, now even these storied brands are feeling the undertow of our Greater Depression.  Lately I’ve seen many eBay listings for sterling pieces by respected makers like Gorham, Birks and yes, even Tiffany, go for not much more than melt value.  This is an undeniably monumental development.  It is clear evidence that the progressive and ongoing impoverishment of the middle class is effectively crashing the 2020 antiques market.

Vintage watches are the next category of antiques I wanted to talk about.  As you can probably guess, the trend here has been quite similar to what we’ve already seen with rare coins and sterling silverware.  The low-end of the vintage watch market is still fairly robust, with over 10,000 watches changing hands on eBay in the $150 to $500 price bracket over the past few months.  But volume drops off precipitously at higher prices, with less than 900 watches selling on eBay in the $2,000 to $10,000 price range over that same period of time.

Many fine antique wristwatches go begging for a bid in this environment.  It is all too common to see stately, older Hamiltons, Lord Elgins and Bulovas sell for little more than the value of their gold cases.  Even watches from hallowed European makers such as Omega, Longines and Universal Genève can struggle to surpass the $700 price point.  Only the very strongest brands – the Rolexes, Patek Philippes and Vacheron Constantins – still command top dollar in today’s vintage watch world.

Not every aspect of the 2020 antiques market is gloom and doom however.

There is anecdotal evidence that the antiques trade is finally completing the painful transition to online sales – a trend that many old-time dealers fiercely resisted for many years.  It appears that Covid-19 simply accelerated the movement to online-only sales that was already evident for more than a decade beforehand.  Of course, the downside to this sea change is that many small antique shops with physical storefronts will not reopen in the wake of the pandemic.

Online sales are ultimately a very good thing for the antiques industry.  They allow a larger pool of sellers to connect with a motivated throng of buyers.  And, honestly, the antiques market needs to make this transition or risk fading into permanent irrelevancy.  Despite the short-term teething pains this might cause some people involved in the antiques business, it is still for the best in the long-term.

But the aspect of the 2020 antiques market that I find most intriguing is the increasing trend for Millennials and Generation Xers to buy antiques and vintage collectibles as investment vehicles.  After all, if your savings account is going to yield zero interest pretty much forever, why not turn your wealth into physical objects?  You’ll have a much better chance of preserving your purchasing power with a carefully chosen portfolio of fine antiques than you will gambling in our insane casino stock market.

The only downside I see is that many people new to the field of antiques are buying vintage 1980s and 1990s collectibles, rather than older antiques with an established track record.  This is to be expected as middle aged people have a tendency to purchase items they fondly remember from their youth, thus driving up prices for those items.  But this trend has a dark side too.  1980s and 1990s collectibles will predictably rise in price until their demographic tailwind is exhausted.  At that point, everyone will try to sell, but to whom?

In the year 2040, no one will want your Alf memorabilia.

This is why I recommend that antique investors stick to classic, high-intrinsic value antiques such as rare coins, vintage wristwatches, antique jewelry and sterling silverware.  These are categories that have stood the test of time, reliably appreciating over decades, if not centuries.  And as an added bonus, these older, established antiques are currently selling for ridiculously low prices relative to stocks and bonds.

I say that if the 2020 antiques market insists on offering us such grand bargains, we would be foolish not to accept them.  Invest accordingly.

 

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Understanding Price Trends in the Collectibles Market

Understanding Price Trends in the Collectibles Market
Photo Credit: Michel Ngilen

Collectibles price trends are a hot topic in the vintage item marketplace.  And for good reason.  Everyone wants to know which collectibles will appreciate in value over the next few years and which ones should be unloaded now before the price collapses.

Although few know about it, collectibles price trends actually follow a predictable life cycle.

A large source of demand for vintage items comes from people who were exposed to them when they were children or teenagers.  This interaction could have taken place anywhere: at school, a friend’s house, their grandparent’s or in the child’s own home.  The only important factor is that a young person sees, touches and experiences these items during his formative years – roughly between the ages of 5 and 20.  As these children grow up and become adults, it is natural to want to recapture that spark of happiness by reacquiring the fondly-remembered collectibles of their youth.

In other words, nostalgia is a major driving force in the price trends of collectibles.

This won’t come as any surprise to people with intimate knowledge of the vintage and antique marketplace.  But it does allow us to formulate interesting projections of collectibles price trends based on demographics (and simple math).

So let’s start with one immutable fact: most collectors are between the ages of 30 and 65.  Now you might ask, “Collectors of what?”  The answer to this is: anything!

People tend to be most acquisitive during middle age.  This is when they have the most disposable income and strongest psychological motivation.  Before their 30s, most people are concerned with making friends, having fun and finding a significant other.  After the age of 65, many people are constrained by lower incomes in retirement, smaller living spaces, or the onset of ill health.

So before the age of 30, few people are hard-core collectors.  After the age of 65, even formerly hard-core collectors are gradually forced to either buy less or possibly disgorge their collections.    Therefore, collectors tend to be most active between their 30s and 60s, when lifestyle conditions are close to perfect.  And although there will always be exceptions to this rule, we only care that it is true in a broad, statistical sense (i.e. this is the way it works in large populations).

With this information we can forecast demand trends for collectibles based on their era.

As I write this, the year is 2020.  So 65 year olds (the trailing edge of the collector demographic) were born in 1955.  But they may remember items they came into contact with at an early age, perhaps as young as 5.  So collectibles from the year 1960 (and later) will be in general demand.  Likewise, 30 year olds, born in the year 1990, represent the leading edge of the collector demographic.  These people might be interested in items from the mid to late 1990s.

The time period between the leading and trailing edge of the collecting demographic represents the sweet spot for vintage items.  So right now, in the year 2020, items from circa 1960 to 1995 are in the highest demand.  Prices for collectibles at the leading edge of the wave will tend to ramp quickly as new collectors age into their 30s and begin to show an interest in them.  By the same token, as 65 year olds begin to age out of the collecting demographic, price trends for those collectibles at the trailing edge of the wave will rapidly turn negative.

We can see this collectibles market trend in action right now.

Early 8-bit and 16-bit video games from famous consoles such as the Nintendo NES, Super Nintendo and Sega Genesis have skyrocketed in value over the past decade.  These games were originally released in the late 1980s to mid 1990s, but became obsolete long ago due to technological advancements in computer graphics and sound.

However, that hasn’t stopped legions of 30 and 40-somethings from rediscovering their childhood treasures as adults.  It was once possible to buy old game cartridges from hallowed gaming series like Castlevania, Duck Tales or Mortal Combat for a dollar or two at garage sales or flea markets.  But over the past 10 to 12 years prices have increased tremendously.

For example, a used copy of the 1994 Sega Genesis game Castlevania Bloodlines now sells for around $50, versus just $10 dollars back in 2007.  If you happen to have a gently used copy with its papers and original box intact, the price shoots up to nearly $150.

 

Price Trend for Sega Genesis game Castlevania Bloodlines

Price trend for the Sega Genesis game Castlevania Bloodlines

Photo Credit: Price Charting

 

There are other collectibles from the late 1980s/early 1990s that are increasing in value as well.  Certain comic books, movie posters and toys from this era have enjoyed strongly rising price trends as the demographic winds have been at their back.

But although the sun may be rising for 1990s collectibles, time is the enemy for collectibles on the other side of the trend.  In particular, pop culture kitsch from the 1950s and early 1960s is starting to feel the chill from an increasingly elderly collecting demographic.

Two great examples of these price trends are Elvis and Hopalong Cassidy memorabilia.  Elvis is the iconic 1950s/1960s singer who popularized rock and roll.  He was (and still is for the most part) a household name, who inspired legions of devoted fans.  But those Elvis fans who were teenagers in the 1950s are in their 70s today.  As a result, the market for Elvis collectibles, after having held strong for many decades, is collapsing.

The same story holds true for Hopalong Cassidy, a children’s television hero from the 1950s.  Although millions of fans enjoyed his TV adventures during their childhood, the demand for Hopalong Cassidy collectibles is nearly gone today.

In both cases, prices for paraphernalia associated with these two 1950s personalities have crashed.  And honestly, it won’t be too long before the same thing happens to pop culture collectibles from the 1960s.  This doesn’t bode well for Rolling Stones or Beatles collectors.

But our thesis also applies to broad collectibles price trends beyond just famous personalities.  Right now Mid-Century – especially Mid-Century furniture – is in style.  So prices for these pieces are relatively high.  But Mid-Century collectibles are also at the trailing edge of the demographic wave.

Therefore we can surmise that vintage Mid-Century furniture will get hit two-fold in the years ahead.  First, its natural buying demographic will start to age-out.  This is inevitable, unavoidable and quite devastating by itself.  But a secondary negative factor for Mid-Century furniture is that its characteristic streamlined look will eventually fall out of favor as decorating tastes naturally change.

So don’t buy Mid-Century furniture today if future returns are important to you.

And don’t make the mistake of believing that collectible price trends are permanent for items that are currently gaining popularity.  Although some 1990s video games and comic books have done tremendously well over the past several years, their time in the sun isn’t forever.  One day they too will follow in the footsteps of Elvis memorabilia, ending up in trash cans and land-fills.

 

Vintage Super Nintendo Game Cartridges for Sale on eBay

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This is one of the reasons why I invest exclusively in “classic” antiques.  By this I mean items that are made from precious metals, gemstones, exotic woods or other high quality materials.  I also prefer to buy items that were made before 1950 (although this isn’t an absolute necessity).  Price trends for items made before 1950 have already rolled off the demographically-driven wave, meaning that fad-related demand is usually non-existent.  It is also helpful if an item has a well-established collector’s market with a century or more of stable demand.

So the antiques I tend to buy occupy a pretty short list.  I like old coins, vintage wristwatches, antique jewelry and other similarly compact, high-value items.

As always, my humble advice to others is to always buy what you like.  After all, you’re the one collecting it.  Just realize that many collectibles will end up being worth very little after they hit about 60 years in age.  Only the really worthwhile stuff retains value after that.

 

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The History and Romance of World War I Trench Watches

The History and Romance of World War I Trench Watches
Photo Credit: slake25
This beautiful World War I trench watch has a sterling silver case with import hallmarks from the London Assay office (circa 1918) and a 15-jewel Longines movement.  The dial bears the mark of the retailer – J.C. Vickery of London – instead of the watch manufacturer, which was common for the time.

Our story about trench watches begins, oddly enough, back in the mid-1990s when I was still in high school.  Unlike most high school students of my time (or any time for that matter), I loved antiques.  Happily, my grandmother also loved antiques.  So we would often take Saturday expeditions together to the nearest flea market, antique store or junk shop in search of that next great vintage treasure.

One weekend, my grandmother and I visited an antique shop that we both enjoyed frequenting – Three Sisters and Me.  Now long defunct, at the time this antique store was an eclectic mix of country primitives, odd Victorian pieces and vintage kitchenware.  My grandmother and I loved digging through the shop’s nooks and crannies, picking up whatever struck our fancy.

While browsing through its dusty shelves, I came across a plastic Ziploc grab-bag of vintage jewelry with a $5 price tag.  Now most of the items in this lot were costume jewelry or cheap trinkets – exactly what you’d expect for something priced at only a few dollars.  But I saw enough sterling silver items in the grab-bag to pique my interest.  If nothing else, I would be able to scrap the contents and make myself a small profit.

So with my grandmother’s encouragement, I laid down a five dollar bill on the shop counter and became the happy new owner of an odd, if not intriguing bag of junk jewelry.  It was only later on when I was back at my grandmother’s house that I discovered the secret treasure that bag held.

As I dug through my newfound entertainment for the afternoon, I saw it – a World War I era Waltham trench watch.  It featured a sterling silver “Admiral Benson” cushion-shaped case with wire lugs and an onion-style, fluted winding crown.  Despite not keeping time, the watch’s 15-jewel, manual-wind Waltham movement was still a miniature work of art.  The white enamel military dial, although cracked with age, still retained its original skeleton hands – complete with traces of radium lume!  The 6 o’clock sub-seconds and red 12 o’clock marker enhanced the dial’s bold, yet elegant Arabic numerals.  You simply knew that this piece, like so many other trench watches of its era, had been the prized possession of some unnamed Allied soldier on the Western Front.

Unfortunately, this story has a sad ending.  Due to my own ignorance and the folly of youth, I chose to scrap this amazing trench watch for its silver content.  After I carefully inspected the piece, I came to the determination that the watch’s defects were too great to justify the expense of a full restoration.  Its crystal was missing.  The case lugs were slightly bent.  The movement was both rusty and non-functional.  And the enamel dial had significant damage.

I have regretted that decision for the last 25 years of my life.  And I will probably regret it for the next 25 years, as well.

My remorse isn’t due to any financial loss incurred, although that is part of my cautionary tale.  If fully restored (at the cost of perhaps a few hundred dollars), I estimate that my $5 trench watch would be worth between $500 and $1,000 today.  No, I regret it because my poor decision represents the loss of yet another irreplaceable piece of World War I horological history.

 

Antique World War I Era Trench Watches for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

Although made by the millions for the greatest war the world had ever known up until that point, trench watches are incredibly rare today.  Untold numbers were lost or blown up on the battlefield, thrown out when fashions changed or allowed to rust away over the course of the last 100 years.  As proof, a search for the term “trench watch” on the popular online watch site Chrono24 returns just 33 results out of over 474,000 watches for sale in total!

Frankly speaking, it is a wonder that any of these historically important World War I artifacts have survived intact for today’s vintage watch connoisseurs to enjoy.  But before I speak further about the details of trench watches, a short history lesson is in order.

 

The Great War

At the opening of the conflict in August 1914, the British diplomat Sir Edward Grey famously remarked that “The lamps are going out all over Europe; we shall not see them lit again in our lifetime.”  And in their place sprang up the bonfires of war, with all its accompanying horrors: disease, famine and deprivation.

The war split the great European powers into two opposing factions.  On one side was the Entente (also known as the Allied Powers) – Great Britain, France, Russia and, later in the war, Italy and the United States.  On the other side stood the Central Powers – Germany, Austria-Hungary and the Ottoman Empire.  Millions of young men from these countries (and many other smaller belligerents) dutifully marched off to war when called to serve.

But the realities of modern warfare circa 1914 were quite different than anyone had expected.  Military men and politicians on all sides had almost universally predicted a short, glorious war dominated by the Napoleonic cavalry charges of the early 19th century.  However, the invention of the machine gun in the late 19th century had largely invalidated traditional military tactics when no one was looking.

As a result, World War I quickly devolved from dynamic cavalry battles to static trench warfare.  Conditions were almost unbearably awful for all participants.  Soldiers lived in a maze of zig-zagging trench systems intended to provide interlocking fields of fire while also minimizing the concussive force and shrapnel damage from the inevitable lucky artillery round.  Mud, often ankle-deep and ice cold, was an omnipresent problem in these trenches – so much so that the malady known as “trench-foot” quickly entered the popular lexicon of the day.

 

No Man's Land - Flanders Field - Final

The worst part of the war for the average infantryman wasn’t the trenches, as horrid as those could be.  No, it was the death that awaited them outside the trenches when they were ordered “over the top” for a mass charge into the enemy’s waiting machine guns.  In between the two opposing trench systems lay “no man’s land” – a cratered, treeless moonscape filled with barbed wire that could easily be raked by enemy machine gun fire or bombarded with artillery shells.  Snipers, hand grenades and (later in the war) poison gas rounded out the omnipresent dangers on a World War I battlefield.

In spite of these travails most soldiers performed admirably, bravely charging into no man’s land on the orders of their commanding officers.  A common saying at the time about the British army was that it was “lions led by donkeys”.  This refers to how the British generals, like Douglas “Butcher” Haig, repeatedly ordered bloody charges across no man’s land, unmoved by their apparent futility.

 

Every Second Counted on the World War I Battlefield

In this grim new world of trench warfare, timing was paramount.  A handful of seconds might be the only thing separating a soldier from life – and a jubilant homecoming – and death – just another corpse on the battlefield.

For example, if a commander ordered his unit over the top a mere 15 or 20 seconds too early during an infantry assault, the outcome was often total annihilation for the unfortunate group.  Enemy machine gunners would naturally target any isolated unit out in no man’s land and wipe it out.

Seconds also counted for a new artillery strategy introduced during World War I called the creeping barrage.  In this new tactic, a volley of artillery fire was laid down on enemy position.  But instead of being static like artillery fire was early in the war, the creeping barrage methodically “walked” the rounds through no man’s land, then through the enemy’s perimeter defenses before finishing deep in the enemy trench system.

In order for the creeping barrage to be effective, friendly infantry forces had to charge just behind the incoming shells.  This meant that they would arrive at the first line of enemy trenches just as the barrage “walked” further into the enemy lines.  By using this technique, infantry soldiers could (in theory) avoid the murderous volley of machine gun fire that normally cut units to ribbons in no man’s land.

But in order to work, the timing of the creeping barrage had to be absolutely perfect.  If you charged out of your own trench line too soon, you would be torn to shreds by your own artillery fire.  If you waited too long, the enemy infantry that had taken cover during the artillery salvo would have time to come out of their bunkers and man their machine guns nests while you were still traversing no man’s land.

And of course, it wasn’t just the common infantryman who needed to know the time down to the second either.  Everyone from staff officers to pilots were dependant on a reliable watch in order to be able to coordinate the tremendous complexities of a modern war waged on an unprecedented, global scale.

So for a military man during World War I, a good watch was an absolute necessity.  But the old style pocket watches that had dominated fashion up until 1914 were ill-adapted to the demands of this new type of warfare.  A pocket watch required two hands to operate efficiently.  Removing the watch from a pocket occupied one hand, while opening the watch face (if it was a hunter case), winding it, or resetting the time used a second hand.  This situation was unacceptable to fighting men who not only needed to be able to reference the time quickly and easily, but also needed to have their rifles in hand at all times.

 

The Advent of the “Wristlet”

The natural solution to this problem was the wristwatch, or wristlet as it was often called at the time.  Now, wristwatches weren’t invented during World War I.  They had already existed for a number of years, albeit as a relatively uncommon style of timepiece with effeminate connotations.  In other words, wristwatches were widely considered to be a woman’s watch prior to 1914.

World War I trench watches both masculinized and perfected their predecessor wristlets.  Initially, the trench watch took the form of a conventional pocket watch with wire lugs attached at the 6 and 12 o’clock positions (or, alternatively, the 3 and 9 o’clock positions) to allow for the attachment of a leather strap.  This facilitated wearing the watch on the wrist – hence the name wristlet.

But watch manufacturers soon found that certain modifications were needed in order to get the most out of this radical new watch design.  One of the first changes was the relocation of the winding crown from the 12 o’clock position (where it resides on most pocket watches) to 3 o’clock, where it remains to this day on nearly all wristwatches.

The addition of radium lume to the watch hands and numerals on the watch face also proved to be indispensable.  Radium is a naturally radioactive element which, when combined with zinc sulfide, produces a glowing, phosphorescent material that could be applied like paint.  Radium lume enhanced trench watches were a boon on the battlefield, where it was common for soldiers to need to precisely know the time in preparation for night actions.

As an added bonus, although the glow from a radium lume dial was easy to make out for the watch’s owner, it was much too faint to be visible to enemy snipers hundreds of yards away.  This was in stark contrast to lit matches, which gave away the position of many an unfortunate soldier during the war.

Trench watches also had to overcome the rough realities of battlefield conditions.  Dust, mud and water were omnipresent hazards in trench warfare.  As a result, many watch manufacturers dedicated substantial resources to making their trench watches as dust-proof and moisture-resistant as possible.  They soon discovered that screw-back cases were generally superior to hinged-back or snap-back cases in terms of water and dust resistance.  However, plenty of hinged-back and snap-back trench watches were manufactured during the Great War due to their reduced complexity and lower cost.

Borgel Screw-Back Case Exploded

One of the best known and most highly prized of the World War I era, water-resistant trench watch cases is the Borgel case.  First patented by François Borgel in Geneva, Switzerland in 1891, the Borgel case was a screw-back case design that proved to be ideally suited to the rigors of trench warfare.

It should be noted, however, that although Borgel screw-back cases were relatively water-resistant by early 20th century standards, they are not water-proof by modern standards.  Please don’t wear your 100 year old trench watch in the pool, shower or Jacuzzi, as you are likely to ruin a wonderful timepiece!  True water-proof watches didn’t come into existence until the creation of the legendary Rolex Oyster in 1926.

Another issue that trench watches had to overcome was the propensity of their glass crystals to shatter.  This was especially problematic due to the ubiquity of artillery salvos on the battlefield.  Exploding shells would not only send primary shrapnel in all directions, but could also spawn secondary shrapnel – fragments of wood, steel or even bone dislodged from anything sitting close to the initial explosion.  Secondary shrapnel had a lower velocity than primary shrapnel and was, therefore, less likely to cause mortal wounds.  But it could still easily break the glass crystal on a soldier’s trench watch, rendering it inoperable at a critical moment.

Watch manufacturers solved this problem in two ways.  First, they equipped traditional mineral glass crystal watches with shrapnel guards – a cut-out metal grille that protected the watch face while still allowing the user to tell the time.  With their battlefield connotations and iconic styling, trench watches with shrapnel guards are cherished by both militaria collectors and military watch aficionados alike.

The second way that watchmakers improved the survivability of trench watches was through the development of the so-called “unbreakable crystal”.  These were watch crystals made from clear celluloid plastic instead of the normal mineral glass.  Contrary to the name, unbreakable crystals weren’t truly shatter-proof – just much more robust than mineral glass.

Celluloid, the world’s first thermoplastic, was originally commercialized in the 1860s and 1870s.  However, this wonder-material wasn’t patented for use in watch crystals until 1915, coming to market one year later in 1916.  Unfortunately, celluloid is unstable over long periods of time, with a tendency to yellow and warp.  Therefore, as a rule, surviving trench watches don’t retain their original unbreakable celluloid crystals.

 

Trench Watches for the Troops

Trench watches were in huge demand throughout the duration of World War I.  Millions of troops on all sides of the conflict desperately wanted – no, needed – to have a wristwatch in order to be better soldiers.  But with the exception of select signal corps members, wristwatches were not issued as standard military kit – a soldier was expected to buy his own.

Trench Watch Advertisement 1

The problem was that a good trench watch was expensive!  Period advertisements show that the lowest price a British soldier could realistically hope to pay for a wristwatch was somewhere around £2.  Better quality timepieces with more features often retailed for between £4 and £5.  If you wanted something truly extravagant, like a solid karat gold case, you could expect the price to be even higher.

To put these sums in perspective, the average British infantry private received a meager salary of 1 shilling a day during the Great War – only £1.5 per month.  So a trench watch was beyond the reach of most enlisted men.

British officers, on the other hand, were much better paid than their subordinates.  A British infantry lieutenant could expect to draw a princely salary of 8 shillings, 6 pence a day, or £12.75 per month – more than 8 times what a private earned!  So the officer corps – lieutenants, captains, majors and colonels – constituted the main source of demand for trench watches during the conflict.

This didn’t stop average enlisted men from coveting trench watches, though.  Some members of the lower ranks received wristwatches as gifts from friends or family, while others scrimped and saved in order to be able to afford one.  A considerable number of trench watches were also “liberated” from captured enemy soldiers or even looted from corpses strewn about the battlefield.  A wristwatch might also be gambled or bartered away during the exigencies of war.

 

Trench Watch Characteristics

Trench watches were produced by every major watch company of the time and probably all of the minor ones too.  Established Swiss and American firms had the highest production volumes, with other makers contributing smaller numbers.  Some of the brands commonly seen among antique trench watches include modern-day heavyweights like Omega, Rolex and Longines.  The primary American makers were Waltham, Elgin and Illinois.  Other notable manufacturers were Zenith and Cyma.

Because wristwatches were just emerging prior to World War I, watchmakers of the time didn’t use special, wristwatch-specific movements for trench watches.  Instead, they adapted existing pocket watch movements and simply implanted them into wristwatch cases.

Trench Watch Advertisement 2

These movements were usually smaller, women’s-sized pocket watch movements (such as 3/0s, 0s and 6s) out of necessity.  However, larger movements housed in over-sized cases (generally between 36 and 39 mm in diameter) were occasionally used.  15 or 17 jeweled movements were common in higher quality trench watches, while cheaper, more pedestrian examples would typically employ lower-jewel movements.  Seconds functionality was also highly prized in a military-grade trench watch – usually sub-seconds at the 6 o’clock position.

Trench watch cases were generally made from the same materials as pocket watches of the time.  An expensive solid karat gold watch might grace the wrist of a senior officer, while gold-filled or sterling silver examples would be more common among junior officers.  Steel or nickel-alloy base metal cases were also produced for soldiers looking for the cheapest, most utilitarian option available.

Trench watches almost always had either black or white enamel dials, or some combination of the two.  White enamel dials, in particular, were ubiquitous, often with radium outlined or enhanced hour markers and/or numerals.  This allowed maximum contrast between the numerals and the background, which was vital to easily telling the time during the chaos of combat.

While both Roman and Arabic numeral dials can be found on trench watches, the latter tend to dominate.  This is because Arabic numerals are easier to read at a glance under difficult conditions, with little possibility of confusion.  In addition, some watch manufacturers highlighted or outlined the 12 o’clock number (regardless of whether it was Roman or Arabic) in red to help soldiers remained oriented.

 

Trench Watches After the Guns Fell Silent

At the end of World War I in November 1918, blessed peace came once again to Europe.  Workers returned to their factories.  Farmers returned to their land.  And soldiers returned to their wives.  But the world of watches had changed forever.

Old style pocket watches, which had dominated timekeeping for more than a century, looked hopelessly outdated beside the sleek new trench watches.  Wristwatches, with their convenience and forward-looking design language, were in vogue.  And pocket watches, with their ponderous sizes and large movements, were out.  Pocket watch sales declined dramatically throughout the 1920s and 1930s, finally tapering off more or less completely in the 1940s.

The wristwatch was ascendant, albeit demilitarized and reimagined for the Roaring 1920s – a decade of unparalleled wealth, fashion and glamour.  But due to massive over-production during the war years, retailers continued to sell World War I trench watches from old inventory well into the 1920s and even up to the early 1930s.

 

Post Script

A few years before her death at the age of 95, my beloved grandmother, who had been by my side during so many antiquing adventures, confided in me about her very earliest childhood memory.  On November 11, 1918, she distinctly recalled marching around outside her family home banging her mother’s pots and pans together to celebrate the end of World War I.  It was the first Armistice Day and my grandmother was 5 years old.

May she forever fly with the angels, along with all those lost to us in the Great War.

 

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