Friday, November 30, 2007
While reading the VLM Airlines on-board magazine on my trip back to France the other day, I came across the word 'Behemoth'. Not the kind of word you see everyday! Especially when it comes to give a pretty name to the contemporary art market. If you read ArtView regularly and especially this month, you will see that this term Behemoth is also used in the same way. Whatever, the important is to see the growing interest in Art as a financial investment. The word Behemoth and his recurrence in the Art press, signs the consensus in the contemporary art view."If you're new to the scene, procure an art adviser.
"Know your market; scour the art press, the galleries and the fairs; but most importantly, appreciate the work before making a transaction".Wooow What an advice!!!
Artnews argue that a huge change appeared in the 'art as a financial investment' landscape in the 80's ignited by the Young British Artists group(YBA), promoted by Mr. Saatchi...
I do not know if you are familiar with economy concepts. For this reason I will try to explain briefly and as clearly as possible what led investors to turn their wallets in the direction of Jeff Koons, Pollock et al.
Let’s start with a bit of history: After the war, the developed world had been investing in industry for '30 glorious years'. In fact so glorious that these industries were generating surpluses and were so enormous that further it became hard to see how further investments could improve earnings. The solution was rather in the need of downsizing. The investors then turned their attention to the Russia, Asia, Dot.com companies, but the money was made on the sale and resale of shares rather than from any notional future income these companies might earn. Then it was the house market helped by restrictions on Land use and the limitation for constructions in Britain... So why Art? ArtView says that an artwork is unique and so, a good store of value. Although internal movements pushed new generations of artists in front of the stage, sharing the big chair with old masters, the boom in the market came from the need to store the excess of capital generated by the same prosperous companies mentioned before.
What can lead the financial artworld to collapse? Art prices could rise so high that people would not be confident anymore in buying artworks, perceiving a too big difference between intrinsic value (linked with the quality of the artworks) and financial value (The price we are willing to pay to get a artwork). But another investment opportunity offering better appreciation could also arise.
In both scenario, prices would obviously fall... This is why having a regular look on the top end of the market is important. I planned to keep you in touch anyway!
What can lead the financial artworld to collapse? Art prices could rise so high that people would not be confident anymore in buying artworks, perceiving a too big difference between intrinsic value (linked with the quality of the artworks) and financial value (The price we are willing to pay to get a artwork). But another investment opportunity offering better appreciation could also arise.In both scenario, prices would obviously fall... This is why having a regular look on the top end of the market is important. I planned to keep you in touch anyway!
Photos:
Andy warhol at the Hamburger Bahnhoff in Berlin.
Jake and Dino Chapman at the Frieze art fair. London.
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