Michael has always been very keen on clocks. He liked the numbers, and the hands and the tick tock were just a bonus. Now he is taking an interest in their time-keeping abilities. He has been repeating overheard comments, with a gradually growing understanding of the meaning, like "The big hand is pointing straight up". I'm pretty sure he now grasps that if the big hand points straight up, its something o'clock, and the little hand tells you what o'clock.
This morning he wanted to wear my watch. It was about 2 minutes to 7, and he said "The hand is straight up. It's seven o'watch". And technically, he was spot on.