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ART thread: A long term investment? Or short punt?

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ART thread: A long term investment? Or short punt?

What are they cycles? How to choose investment art?

===================================

I have attended two major Sotheby's auctions in Hong Kong, and am fascinated with the potential for investing in Art:

+ Art prices jumped 18% in 2007, according to: http://www.Artprice.com

+ Some paintings have been sold for absolutely fabulous returns, like 100 times or more of the cost.

+ You get tax-free "dividends" through the pleasure you get in having it around you

 

Having said this, there are some drawbacks

- My initial work suggests that we may be at-the-peak or over the top of a long term cycle

- The big money is made by SELLING AT AUCTION, not in buying there

- It is difficult to spot up-and-coming artists, since art investment depends on more that pure talent.

Of greater importance is how good the arts (or his managers) are at promoting art, and how important

and artist becomes in a the "flow of art history"

A fascinating subject (to me), and so I hope others are interested too

== ==

CYCLES...

artindexnmmaaaima0.jpg

Sotheby's (BID) has already experienced the sharpest drop since 1999

Monthly BID Chart ... update : close-up-2008

bigzj2di7.gif

TURNING POINTS:

: 1 : late 1980's stock boom

: A : End of Property downturn in the US& UK

: 2 : Peak of the Dotcom boom

: B : End of the Nasdaq/Tech stock bust

: 3 : Peak of the pre-subprime Stock boom

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Is Trouble coloring the Art world? - article from today's Asian WSJ
Accounts receivable climb at Sotheby's as buyers delay payments
========================

"Wealthy clients at Sotheby's appear to be falling behind on their bills- and that could signal trouble for the auction house and the art market."

Sotheby's (BID) : All-data : Daily chart : weekly / Last: (11/28/17): $48.53

LCPIGQw.gif


Accounts Receivable more than doubled to $835 million in 2007, according to the Sotheby's annual report:
- The largest total in company history
- $520 million of the incraese came in the 4th quarter
- Sotheby's is incraesingly guaranteeing sellers a "minimum payment" in order to win business
. (Guarantees were $902 mn in 2007, double 2006, and up from $131 mn. in 2005
- Sothebys doesnt pay the consigners until they collect from the buyer

Auctions has become "competitions of conspicuous consumption" filled with cekebrities, hedge fund managers, mysterious Russian billionaires. A ticket to the May auction in NY has become highly coveted, since the number was reduced last year. (DB note: it is still free andeasy to attend in HK- they are trying to build the market here.)

Sotheby's says the climb in receivables is not problematic. It has to do with the timing of auctions.
Others disagree, saying that Sothebys is letting buyers wait as long as 3-4 months before paying. This is a dangerous practice, particularly if Sotheby's has a guarantee outstanding against such art. If they are forced to resell the piece, it may come at a lower price, putting a starin on the Sotheby's balance sheet

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BIG BOUNCE DUE soon in Sotheby's stock?

========

 

Here's a close-up of the MONTHLY chart ... update

bigsk7.gif

 

It looks like there is important support at about $22/23.

 

Bigcharts shows:

+ P/E Ratio: 7.61

+ Yield: 2.43%

 

According to that WSJ article: "Sotheby's stock tumbled in November after a pricey Van Gogh, estimated to go for $28 million, failed to sell, and its shares continued to slide." (Perhaps some people "in the know" areaware that they will get hit on some of their big price guarantees. But this "potential bad news" may be in the price already.)

 

The auction that I attended in Hong Kong last week was a record-breaking affair. The art market in the fareast remains healthy, andis still growing, and Sotheby's is working hard to keep it going.

 

If we are going to get Jim Puplava's "oriel cookie- creamy center rally" soon,

might a punt on BID from $22/23 (or lower!) be an interesting way to play it?

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HONG KONG's ART SCENE... (and its reliance on the mainland's CCA)

note's from a article in today's SCMP, C6-Life by Justus Krueger

 

Growing Up Fast

A new gallery in Sheung Wan is taking a refreshing approach

scmfeaturesscmp06apr08fny1.jpg

(Tang Contemporary Art - Zheng Lin, owner)

 

Hong kong is the third largest art market in the world- after New York and London,

when measured by auction sales. But most galleries in Hk tend to focus on "contemporary chinese art" (CCA), produced by artists from mainland China, because that is where the buyers' interest tends to be centered.

 

The "china fever" started in the 1990's when "a few curious expats" started collecting art produced in China. Collectors like the well-known swiss, Uli Sigg, started his collection then. The market for CCA really took off after the 1997 asian crisis, and has reflected growing affluience in the mainland, and the desire of wealthy chinese people to collect their own art. This growth has happened after a 100 year "ice age" in collecting Chinese art.

 

Zheng started his first gallery in Bangkok around the time of the Asian crisis, and survived that downturn to become ever more successful after the market took off again. He also opened a gallery in Beijing, because: "If you're not in Beijing, andytou deal with CCA overseas, you are likely to get marginalised."

 

Zheng wants to help his clients develop "a good eye", and his gallery will not be showcasing just CCA. As he says, "If you give your clients some good guidance anbdgardulaly adjust their views, they are able to turn to serious collecting. Zheng wants to develop a wider audience, and help bring CCA into the global mainstream. And maybe a gallery in HK will be just a stepping stone to more galleries overseas. He knows the scene from years of experience, and is well connected with the artists.

 

The approach taken by the Tang Contemporary gallery is different from most:

 

"We invite independent curators for many of our exhibitions, and i dont interfer with their work... in teh end the curator decides."

 

Currrently, he is showing :

Naked Beyond the Skin, a collection of sculptures by Xiang Jing

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SPACE INVADERS

scmfeaturesscmp09apr08nuq6.jpg

(art lovers: Ronny Leung, Livia Garcia, Stella Tang, and Carl Cheng Chi-ming contributed)

 

Book: OASIS: Artists' Studios in Hong kong :

a visit to 25 artist studios (and 39 artists):

Thru direct mail at hk$388 & from: aopp@asiaone.com.hk

 

Setting out to compile a directory of artists' studios in the city proved a revelation for a team of art lovers, writes Charmaine Carvalho, in article in today's SCMP. Places she mentions:

 

+ Cattle Depot Artists Village :

 

+ Ho-Siu kee's studio, in an indiustrial building in Cheung Sha Wan

 

+ Fo Tan studio, and Mountain Loft, in Fo tan

 

+ Wilson Shieh Ka-ho's studio, in a Sai Wan tenement

 

+ Kwun Tong 1126 studio

 

"Hong kong lacks the history that helps give artists the sense of being part of a tradition... Students tend to cite foreign artists rather than local ones, perhaps because of the lack of documentation and the low profile of artists working in the city." says Stella Tang Ying-chi, an artist and (with Carl Cheng) a co-founder of the Oasis project. "It's important to expand the circle of art lovers, so that local artists have a wider audience."

 

Cheng also sees great potential:

"The more I became involved in this project, the more I began to think about Hong Kong art and the environment that we work in. I realised that the standard or art is quite high, and i'm confident teh best Hong kong art will be fully recognised in the future."

 

asiaone.com.hk : http://www.asiaone.com.hk

 

== ==

 

I have a sense that when a community starts to document its local artists, it may be a good time to start collecting their art. and with HK 'the third largest art market in the world", I find it very strange that HK-based artists are not better known, even in their home city. Is this a great counter cyclical opportunity that i am staring at??

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DECORATE WITH ART- suggests The Standard

 

"whether a living room, bedroom, or bathroom. the existence of art is cerain to add interest to your home and can evoke endless imagination. Displaying art works will not only perform magic for the overall ambience, but it also serves as a way to reflect your personality."

 

(Makes sense to me. To many HK flats have NOTHING ON THE WALLS. That's boring.)

 

Cat street gallery - on hollywood road, is mentioned in the article:

large enough gallery, with 1,000 sf. and nine (!) meter ceilings

Nor running a one-man show called, "Screwed Up heads", by Rupert Shrive

 

Paul Robinson, was another artist shown by the gallery recently.

Robinson's work can be "commssioned through teh gallery", so this seems to eb something

worth inquiriung about from artists, or through galleries

 

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Art is a way of storing wealth.

 

But I would suggest you have to look at what type of art thrives in a recession and what thrives in a boom.

 

Record picture prices signal the end of a boom.

 

Saatchi finds a young artist he likes, buys all his work and then promotes the heck out of him or her. There is a scacity of work and Saatchi's collection soars in value.

 

I've said it before, but comedy thrives most in a recession, as well as certain types of theatre. Look at the 1930s and the 1970s

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Art is a way of storing wealth.

 

But I would suggest you have to look at what type of art thrives in a recession and what thrives in a boom.

 

Record picture prices signal the end of a boom.

 

Saatchi finds a young artist he likes, buys all his work and then promotes the heck out of him or her. There is a scacity of work and Saatchi's collection soars in value.

 

I've said it before, but comedy thrives most in a recession, as well as certain types of theatre. Look at the 1930s and the 1970s

 

 

What an interesting point on the comedy.

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Buyer sought for Warhol's 'Mao' says WSJ

 

Christies is hoping for US$120 million, cashing in on Chinese enthusiasm around the time of the Olympics.

 

1114warhol1_narrowweb__300x375,0.jpg . maowarholchristieschinalau.jpg

- One of Four 4 1/4 meter tall silkscreen paintings. Warhol kept this particular painting for himself,

giving the others to his main backers. (Note; the one above is not the painting for sales. That

is a smaller one. The one being sold has red lipstick and a gray smear below the left shoulder)

 

"Experts believe that the price would set a world record for the American artist, whose popularity has

grown amongst new Asian collectors." Prior record for Warhol was $71.7 million for: Green Car Crash

 

((One of four similar iconic images. Sure.

But let's get serious. This is pure exploitation, of Chinese wealth, and susceptibility for brand names.

And also the timing of the Olympics))

 

HK property tycoon, Joseph Lau, paid $17.4 million for a smaller Mao painting by Warhol two years ago.

Several of the smallest ones (30-by-25 centimenters) have since sold for $2 million each, up from $120,000

two years ago.

 

Warhol_Mao.jpg

 

 

The auction is set for Hong Kong: May 24-25

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In a bizarre twist of circumstances I found myself in the company of two billionaires three years ago, really nice people two arms and legs same as the rest of us.

 

When the left one of their lackies tells me they where off to look at an estate abroad, as they where now so wealthy that they only bought stuff that wasn't being made anymore, i.e. had a finite supply, large tracts of land, Art, gold etc.

 

This was in an effort to cascade wealth through the generations, i.e. a Van Gogh may fall in value but in the next three or four generations there will be bubble opportunities to sell into.

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In a bizarre twist of circumstances I found myself in the company of two billionaires three years ago, really nice people two arms and legs same as the rest of us.

 

They may be billionaires. But buying at/near an important peak...

bigzj2di7.gif

 

...relying on wealth and art advisors sounds like a great way to deplete the family fortune, not to pass it on.

 

No advisor can "go wrong" advising buying the major "brand names" in arts. But now is not the right time.

I reckon that the art market (like physical real estate) probably peaks 6 -12 months after Sotheby stock.

 

My advice: Buy a young artist whose work you like, when it can still be ha at affordable prices.

Maybe after you've made money doing that, you can spread out into brand-name art

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They may be billionaires. But buying at/near an important peak...

bigzj2di7.gif

 

...relying on wealth and art advisors sounds like a great way to deplete the family fortune, not to pass it on.

 

No advisor can "go wrong" advising buying the major "brand names" in arts. But now is not the right time.

I reckon that the art market (like physical real estate) probably peaks 6 -12 months after Sotheby stock.

 

My advice: Buy a young artist whose work you like, when it can still be ha at affordable prices.

Maybe after you've made money doing that, you can spread out into brand-name art

 

Dr Bubb couldn't agree more re height of the bubble etc, perhaps 3 years ago they were a bit lower down the slope, they're counter argument is that in the next hundred years there will be bigger bubbles.

 

It would appear they were more interested in securing their dynasty generations ahead, not the mucky business of making a return today they've already created all the money that they or their family could wish for in the short medium term.

 

The other more ominous thing was the estates they buy were scattered all over the world, were extremely large and remote, these purchases are in some kind of trust with large lump sums in them to fund the estate individually for 75 years without any return required.

 

There is no doubt they are bolt holes where the can relax, defend and store wealth in.

 

 

 

 

 

 

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Dr Bubb couldn't agree more re height of the bubble etc, perhaps 3 years ago they were a bit lower down the slope, they're counter argument is that in the next hundred years there will be bigger bubbles.

 

It would appear they were more interested in securing their dynasty generations ahead, not the mucky business of making a return today they've already created all the money that they or their family could wish for in the short medium term.

 

I get your point, and certainly ypu could be right.

My own "broad guess" is that the price of the work of famous artists, is often ...

 

Directly Related to THE NUMBER OF BILLIONAIRES ...

 

That number has been growing, but if it shrinks in America in a recession, then the price of art that

appeals mostly to Americans should shrink too.

 

Chinese Art prices have risen as the number of Chinese billionaires grew dramatically

 

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MORE ART - is coming to Hong Kong

 

1/

Hong Kong International Art Fair - 14 -18 May 2008

Venue: Hong Kong Conference and Exhibition Centre

 

A new international art fair for HK. See art from 100 galleries

 

http://www.HongKongArtFair.com

 

2/

Tagore Gallery is opening in Hong Kong - soon

 

11Sundaram.jpg

US based arts guru, Sundaram Tagore (46), is soon to open a gallery in HK.

This great-grandson of famous Indian writer, R. Tagore, will be opening his new gallery

in a 2,000 sf venue on Hollywood Road

 

He says "his mission" is: To create a global dialog through art, an he is aiming:

 

+ To be mission and vision-driven, rather than market driven

+ He will take local Chinese artists overseas, (rather than just bringing foreign artists to HK)

 

Fisrt showing will be from Friday to June 14th:

Five artists from the East (India, Japan, Israel, Uzbekehstan) and

five artists from the West (US, Holland, and Italy)

30-odd pieces are valued at: US$50,000 to US$380,000 (HK$390k - $3 million)

 

 

THIS IS A SIGN of the increasing seriousness of the Art scene in HK

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Somehow, I can't help thinking it's all related to credit cyles and the availability of cash and leverage.

Lots of cash = Art auctions very successful.

Credit Crunch = prices ready for a fall?

mire of recession / depression = prices bottom?

 

EDIT: Mega-inflation? dunno!

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Somehow, I can't help thinking it's all related to credit cyles and the availability of cash and leverage.

Lots of cash = Art auctions very successful.

Credit Crunch = prices ready for a fall?

mire of recession / depression = prices bottom?

 

EDIT: Mega-inflation? dunno!

 

Makes sense.

I think Top-quality art would do well in hyperinflation, until towards the very end, when:

 

+ Real wealth is being destroyed by mal-investment, and

 

+ People's investing focus narrows down to certain "preferred investments" (like gold, and the top stocks),

where people remain confident, because these investments stay liquid.

 

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Makes sense.

I think Top-quality art would do well in hyperinflation, until towards the very end, when:

 

+ Real wealth is being destroyed by mal-investment, and

 

+ People's investing focus narrows down to certain "preferred investments" (like gold, and the top stocks),

where people remain confident, because these investments stay liquid.

I think I agree with that, but I'm not sure I understand you when you say "Real wealth is being destroyed by mal-investment"..

:unsure:

 

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Now is a great time to sell art because the super rich are three times richer than they were a decade ago. At the expense of the rest of us..

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Now is a great time to sell art because the super rich are three times richer than they were a decade ago. At the expense of the rest of us..

 

The thing here is maybe to look for undervalued and unappreciated art, that has upwards potential

 

I might put works by local Hong Kong-based artists into that category.

And I will definitely be investing their work in the months to come.

 

Any other similar ideas? ... Tibet? ...South American artists? ...Gulf States?

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From what I've seen, the depressing stuff like much of Van Gogh falls in a recession whereas 'life is wondrous' works like those of Ted Harrison rises.

 

Ted Harrison? Who is that?

 

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The best advice I ever heard abouot buying art is "Buy something you like!".

 

That way, if the price goes down, you don't care, you have a great piece of art you love.

 

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Ted Harrison was a school teacher that emigrated to Canada and fell in love with the Yukon. Mainly primary colours and childlike in simplicity.

 

There is a story about him leaning on the rail of a ferry next to 2 Innuits also watching the sunset.

 

1st Innuit: Look! A Harrison sky.

 

 

Sorry, couldn't figure how to get a larger image posted. Plenty of sites of you google Ted Harrison.

 

post-1793-1210267765_thumb.jpg

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Ooh ! Good thread. I'm an engineer and successfully hide my arty interests under a philistine bushel. Of course, thankfully, this allows me to never understand some of the high priced art out there.

 

I occasionally buy originals and often several of the same artist, so, I'll have a mini collection. I'm currently liking Rosie Scott, have bought a few and will buy some more. I just like them and like the gold coins, I hope I'll never have to sell but pass them on outside of any government claws.

 

What about other art, such as objects, vases etc. Lovely to have around but some of the antique Moorecroft pottery I bought in the late 80's is barely worth any more now - despite high expectations.

 

Got to be careful or we'll end up like the BBC's Antiques Roadshow.

 

edit. spelling

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ART thread: A long term investment? Or short punt?

What are they cycles? How to choose investment art?

===================================

 

I have attended two major Sotheby's auctions in Hong Kong, and am fascinated with the potential for investing in Art:

 

+ Art prices jumped 18% in 2007, according to: http://www.Artprice.com

+ Some paintings have been sold for absolutely fabulous returns, like 100 times or more of the cost.

+ You get tax-free "dividends" through the pleasure you get in having it around you

 

Having said this, there are some drawbacks

 

- My initial work suggests that we may be at-the-peak or over the top of a long term cycle

- The big money is made by SELLING AT AUCTION, not in buying there

- It is difficult to spot up-and-coming artists, since art investment depends on more that pure talent.

Of greater importance is how good the arts (or his managers) are at promoting art, and how important

and artist becomes in a the "flow of art history"

 

A fascinating subject (to me), and so I hope others are interested too

 

== ==

 

CYCLES...

 

Sotheby's (BID) has already experienced the sharpest drop since 1999

 

Monthly BID Chart ... update : close-up-2008

bigzj2di7.gif

TURNING POINTS:

: 1 : late 1980's stock boom

: A : End of Property downturn in the US& UK

: 2 : Peak of the Dotcom boom

: B : End of the Nasdaq/Tech stock bust

: 3 : Peak of the pre-subprime Stock boom

 

It sounds ultra-trite but art is not an investment in monetary terms, when it becomes that it becomes like BTL or buying corn ETFs. Art is all about passion - do you love it? do you understand it? do you resonate? look at the painting and look at the sculpture. drink the wine. eat the food. these "commodities" are human volatile passionate fashionable

 

sure, if you'd "bought a Banksy" (with all the associated fuck-shite inherent in that) then you'd be rich. I have one on my wall. A stencil over graffito that is peeling. Captured in a particular way.

 

Dr B, ur a decent dude but there ain't no charts for art.

 

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