Thanks for you all comments - I am actually a pretty savvy traveler (at least I thought) and usually have my guards up. But the guy caught me at an off moment when I was reading something on my phone. Also, I had never expected my watch to be a target of theft. But I am actually glad this happened - though not a cheap lesson, but could be way worst. (And gives me an excuse to upgrade!)
From now on, I am not going to be a nice guy when I travel!
By the way, since race was brought up, these guys are from South America.
Race should have never been brought up, but I hope owk learned something here.