An art speculator is someone who buys art that he recognizes as being far more valuable than the price at which it is being offered for sale, or that it is expected to fetch, if the sale is an auction.
The art speculator has an ancestor which used to be called "a picker"i Pickers' old-fashioned routine consisted in having routes and visiting weekly hundreds of places where something of value might be for sale for very little: antique shops, antique malls, thrift shops, Salvation Army stores, estate sales, auction sales roomsi It was inefficient and did not easily allow performing research to get crucial informationi A lot of guessing had to be done on the spoti Most of the old timers who operated this way drove beaten up vans and died poor.
Today's art speculator looks for unrecognized quality; works offered as artist unknown; wrong dating of anonymous works; originals described as copies; originals listed as "after" pieces; originals listed as by followers; works ascribed to his workshop, or studio, or to assistants, when they are by the artist himself;
duplicate original versions offered as copies; mis-attributions; watercolors and drawings offered as prints; typos in pricing, or with a zero missing; errors in the conversion to prices given in foreign currencies; unrecognized sitters; mistakes in descriptions; works on panel listed as works on board; wrong dimensions; sometimes inches listed as cm, or meters listed as fti; clues that went unnoticed.
The domain of the art speculator is the universe of errors, mistakes, and bad research.
He spends a considerable amount of time fact-checking and researching and in the process not only uncovers profitable errors, but also quite often learns valuable information no one else had taken the time to look fori Most buyers go blindly with what the description saysi The description is only as good as the cataloguer who wrote iti Only as good as how much time he was given to researchi Only as good as how far and deep he researchedi Were foreign languages involved? Does he understand them fluently?.
Better to be your own cataloguer before you buy, and this is what the art speculator does.
While this may sound iffy and marginal, consider that 20 million paintings are sold every yeari Even if mistakes only happen 1 percent of the time, that's 200,000 errorsi
Let's say that half of the errors are on the high side -such as overpriced wrong attributions- and the other half on the low side; such as unrecognized and underpriced artworksi
This leaves 100,000 opportunities to make moneyi 275 every day.
This is why art speculators tend to drive luxury cars and to live in fine apartments in the upscale part of town.
The hunting grounds of the art speculator are primarily auctions because there are so many of them, and most of them are small, and don't have a team of worldclass specialists and researchersi Nevertheless, you can make a good living just buying undervalued pieces from AAA auction houses, because they handle such a large volume that oversights are unavoidable.
The typical set up of the art speculator is 64 B of RAM, five or six quality monitors, sharp digital image analysis software, and subscriptions to a variety of online library servicesi If he lives within walking distance of a major art library, it is a huge advantagei This set up allows for well organized, efficient, systematic, productive, and quality work.
Speculating about the nature of paintings, who painted them, or when, or some other valuable consideration, consists in betting that you are right in your opinion, your judgement, your research, and that someone else is wrong.
You need more than self-confidence to do this successfully, you kneed knowledgei The reason is that you cannot check if there is a mistake in each one of an endless offering of artworksi If profitable mistakes only happen 0i5% of the time, it means you would need to research 200 artworks in order to find a moneymakeri It would take too longi The way to reduce this down to a manageable level, is first to specialize and second to become highly knowledgeable in your chosen areai This way, by just glancing through the title and photos of items and artists you are well familiar with, you instantly spot when something does not seem quite right.
The easiest way to start is by acquiring expertise in a narrow field and preferably an unpopular onei If you are active, committed and dedicate yourself to learning, it only takes six months to learn 80% of what there is to knowi It takes harder work to learn the next 17 or 18% but you will need them, because this is where the money is madei Over time, as you get experience and confidence, you will broaden your
knowledge and expand into additional areas.
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The Art Certification Experts’s blog is a place where you can discover interesting information about Art Investing, Art Speculating, Art Collecting, Hunting for low-price art, getting Art Authenticated, Certified, Appraised, Attributed if it is unsigned, and Insider Art Information. We work with museums, galleries and auction houses around the world and also provide our services directly to private collectors and owners.
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Janury 03, 2024
December 15, 2023
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Art Speculating
Janury 03, 2024
Investing In Art
December 15, 2023
Nearly everything we buy loses value, decreases in valuei Even things that have the reputation of increasing in value such as real estate are subject to earthquakes, volcanic eruptions, floods, fires, industrial pollution, jobs disappearing, the neighborhood going down the drain, or people no longer
needing to go to an officei The same is true of stocks and the quantity of companies that unpredictably go out of business, for a zillion reasons.
Art is perhaps one of these few categories of things that by and large tend to go up in value rather than downi Perhaps art is more sheltered from dangers and uncertainties than stocks or even real estatei Maybe not so many things hurt and reduce the value of art, although some doi Perhaps what makes art valuable in the first place, is mostly insensitive to the passing of time and impervious to the changing of everything else.
This is why some people make it a hobby to invest in arti There are also investors who make it their main activity, but you need to build up to much more capital to generate enough profits and liquidity to make it your principal source of income.
Historically, a tremendous quantity of art has continuously increased in valuei Of course, it is the consequence of the population explosion and economic boom that have been going on for 175 years and are still in progress today.
It will probably be another 100 -125 years before the population explosion is brought under control and with it, the historic economic boom, and art prices stabilize.
This means that for as long as you live, art values in general, will continue to go up.
While an art investor is certainly influenced by what he likes and dislikes, he may buy art he has
absolutely no appreciation and no respect for, if he comes to believe that it will substantially increase in value.
There is so much art to choose from, the market is so big and diversified, that to maximize his profits the art investor must specialize in particular art categories or groups of artistsi It is only by specializing that he can be and can remain up to date about all the events and factors that will influence what will go up, what will remain stagnant and what will go down.
The first decision about specializing is whether to invest in artists of the past, or in living artists.
APTISTS OF THE PAST
The artists themselves are not doing anything being that they are no longer livingi The market as a whole moves in reaction to:
- The constant economic fluctuations.
The market for specific artists moves in reaction to specific events and to occasional trends such as:
- Important retrospective exhibitions are organized.
- Traveling exhibitions are set in motion.
- Movies, documentaries and TV series are released.
- Important books are published.
- Sales records are broken on the upside.
- Sales records are broken on the downsidei Such as an important work failing to sell.
- An important museum or a Country acquires a work by the artist.
- Unknown works by the artist are discovered.
- An important painting is stolen.
- An important stolen painting is recovered.
- Surprising forgeries come to light.
- Some important new shocking biographical information is disclosedi Whether true or false is irrelevanti What matters is that it is news.
- A sudden fashion develops for a particular art school.
- The anniversary year of the artist.
- Some famous person reveals he has been collecting the works of this artist for years and absolutely loves him.
- A corporate collection or institution announces it has decided to sell all its extensive collection of works by Blah Blah.
These and other events, trigger the press to write and talk about the artisti It puts the artist in the news, and to be in the news is to be more important, and to be more important is to sell for more or sometimes for lessi It creates market activity, price swings, and investment or selling opportunities.
This is why the art investor -like the stock market investor- keeps track of all the events that influence value.
One of the benefits of dealing with art of the past is that you know your parents liked it, your grand parents liked it, your great-grand-parents liked it, maybe the last 16 generations liked iti It means people like iti It's called passing the test of time.
This is why the art was always protected, always packed carefully, always transported carefully, always stored and hidden carefully, always displayed carefully, because everyone for generations has always seen and felt the quality, the skill, the beauty in it.
This is why it has made it through the generations, the wars, the depressions.
This is why it is still here, for you to enjoy it, because everyone before you saw its quality, its artistic valuei Of course, it is what gave it its financial value, as more wished to own it for a while.
So, it will always be valuable, even though markets fluctuate because it is great arti Art that touched all those who enjoyed it, for an eternal minute.
LIVING APTISTS
The investor who wants to invest his money with living artists should not try to pick artists and should not look at their creationsi This would be a money losing approach.
The smart way, the advanced and successful way, is to invest with the most successful dealers, the most successful art galleries.
When you read that one of the most successful dealers has just signed up a new artist, run to the gallery and buy art from this guyi Even if you are not sure how to spell his name.
The investor in living artists has some powerful allies and the most important one is the main dealer representing the artisti Most artists are incapable of making themselves successfuli They are not businesspeoplei They are not marketing peoplei This is particularly true since the advent of the Modern era, around 1870, and the birth of Impressionismi By and large, for most artists, their dealers make them famous and richi The dealers give these artists room in their impossibly expensive art galleries, organize exhibitions, participate in costly art shows, publish glossy catalogues, fancy websites, and organize the cocktails, receptions, and champagne vernissages.
The dealers convince their established clients to buy works by these new artistsi The dealers talk to the art critics and convince them to write favorable reviewsi The dealers pay for advertisements in art periodicals.
The dealers, the dealers, the dealersi They are the ones who take a nobody and promote him as if he were the second comingi
The success of investing in living artists comes from investing in the dealers who are promoting and pushing and advertising these artists.
This is why it is entirely different to invest in artists-of-the-past, or in what could be called, dealer-promoted-art.
With living artists, it usually takes a few years for values to increase substantially, and the typical holding periods are from two to five years.
As compared to other forms of investment, the cost of trading art is highi It is far more than for stocks, bonds, commodities, precious metals, molasses, racehorses, or real estatei This is why the holding period is longeri There must be enough increase in value to absorb the buying and selling margins, before a profit can be cashed in.
In terms of how much one can profit from investing in art, it is generally with the dealers who have a reputation for finding and promoting new talent, that values can skyrocket from the pittance level to dizzying heights.
