“It is a masterpiece by a very important artist in a sector of the market especially popular today with active collectors in great condition and trading in a liquid market“.
In later posts I’ll go through each phrase in bold.
People buy art for two reasons:
- They like it
- They believe it is a good investment
It’s usually more of 1 than 2 which means they usually buy utter rubbish and is a waste of money.
People pay too much for crap art that they buy on holiday and display the works at home to show off how worldly cultured and cosmopolitan they are.
Each work completely contradicts each other (why wouldn’t it? It was made in different countries by different artists belonging to different categories) – making the whole house look confused, pretentious and ironically, uncultured.
They buy from overpriced tourist traps who make all kinds of semi-believable claims about the work up for grabs. People believe them for whatever reason.
As a result, as I go through many people’s houses I’m increasingly aware that there are no themes and no specialty in the art that they are displaying. You need to have these not just for aesthetics but to know how much you should (or shouldn’t) pay for art.
I’m too scared usually to ask them to tell me about a work. Their “narrative” is pretty weak.
Art investing is like any other investing. You need to specialise in specific areas where you have an advantage over other people. Otherwise you’ll not be able to know (and exploit) the underlying facet of successful investing: the difference between price and value.
You need a “narrative” – that is a story of why the art is valuable. Just like buying shares.
The above quote serves as a checklist before you should buy anything – especially if you treat it as an investment (which you should).