How to invest in art
Originally posted at dailyreckoning.co.uk.
Six months ago, an Andy Warhol painting, “Green Car Crash,” sold for $72 million at Christie’s New York. The pre-auction price estimate was a mere $25 to $35 million.
As art consultant Sandy Heller told ABC News, “It’s hard to put an image of an impaled figure in a burning car in a home where you have little kids.”
The Warhol image (I don’t think we should really it a painting) was a photograph with a little bit of colour added afterwards. You could say he was ahead of his time, in that digital photography, one of the most wonderful new technologies of recent years, had not been invented in the 1960s. I like to play on Adobe Photoshop CS2 and fix family photos. Sitting at the desktop at home, it’s not too hard to turn out a fake “Andy Warhol” of my kids.
A neighbour admired a 1970’s painting on my wall called “Evening on Mount Olympus …” Not any old neighbour. She was a painter, someone whose work has been exhibited at the Tate, and whose husband is a Royal Academician.
“Evening on Mount Olympus” is a picture of unshakeable provenance. It’s even signed by the artist. How do I know the signature is genuine – let’s face it, signatures are the easiest thing of all to forge?
It says, “… by Jim Parton, form 12a,” you see. I did it, when I was 11. It was probably one of my very last paintings before the world of art lost me forever to football and, later on, girls.
My neighbour said she couldn’t believe I’d done it. I can’t believe she couldn’t believe, because, believe me, I’m being honest not modest when I say it’s not very good. (Well, quite good for an eleven year old, possibly. My late grandmother admired it greatly and hung it on her chintz wallpaper for a year or two).
A Warhol or a picture by me?
Aside from the madness of paying $72 million for a photoshop composition, art is a rigged market. Auctioneers like Sotheby’s and Christie’s (who were guilty of charges of market collusion in 2002) bear some responsibility.
But worse is the behaviour of museums. When a benefactor gives a chunk of money to a gallery, he quite often condemns the art it buys never to be seen again. Recently the Seattle Art Museum received $1 billion in gifts of art, helped by the U.S. tax regime, and the lure of “donor recognition”. Donor recognition means the donor gets to show off.
Such recognition doesn’t even last long. All the world’s major art museums have vast collections which no one sees, much of it from donors now long forgotten.
Exquisitely executed paintings from centuries past, if the artist, or period, is out of fashion, may spend fifty years in a vault, seen by no one other than a few crusty art scholars. The Public Catalogue Foundation, a charity, http://www.thepcf.org.uk estimates that 80% of UK collections of oil paintings are never seen by the public.
So art prices remain artificially high. The Metropolitan Museum, for example, has secret warehouses dotted around New York crammed high with stuff that has not been seen for years. Even the Met’s own scholars hardly know what’s there.
If the Met, the Louvre, the National Gallery in London, or The Royal Academy, for that matter, sold the undisplayed 80% of their collections forthwith, art prices would plunge.
The Mona Lisa - currently priceless, but let’s say $250 million - might turn out to be worth “only” $10 million in a market that wasn’t rigged. A $10 million Mona Lisa would be about the right ball park value in term of preserving the world’s cultural heritage.
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