My friend told me he was going to buy a new watch.

This one-liner cleverly plays on words, using the phrase "good time" in two very different ways. When we usually talk about "having a good time," we mean enjoying ourselves or experiencing something pleasant. However, in the context of buying a watch, "a good time" takes on a literal meaning, referring to the watch's ability to accurately tell the time. It's a classic example of a pun, where a single phrase holds a double meaning, creating an unexpected twist.

The humor comes from this unexpected shift in interpretation. We initially anticipate the conversation to be about the friend's enjoyment of the watch, but the punchline redirects us to the watch's fundamental purpose: keeping accurate time. Historically, watches, from sundials to intricate mechanical devices, have always been valued for their precision. The phrase "telling good time" was, and still is, a direct compliment to a watch's functionality.

This joke finds its fun in the listener's mental switch from the common social idiom to the precise technical function of a timepiece. It's a quick, lighthearted linguistic trick that relies on our familiarity with both expressions, making us chuckle at the simple yet effective cleverness of the wordplay.