By E.B. Tucker, editor, Strategic Investor
Yesterday, I talked about the purpose of art. If you missed it, you can catch up here.
Now, we’ll talk about how to buy it without losing your shirt.
Art is one of life’s most subjective pleasures. “Good” art is something you enjoy looking at. “Great” art is something you’d like to hang on your own wall and see every day.
On top of being expensive, the art world is confusing. Take, for instance, the $450 million paid for Leonardo da Vinci’s Salvator Mundi in 2017.
A New York art dealer paid $10,000 for the painting in 2005 at an estate sale. He had it repaired and authenticated, and then he sold it for around $75 million in a Sotheby’s private sale in 2013. The buyer flipped it to a Russian billionaire for $127.5 million six months later. Rumor has it the $450 million buyer acted on behalf of Saudi crown prince Mohammad bin Salman.
There is no quantifiable reason Salvator Mundi sold for $450 million. That’s just what the buyer decided he’d pay. Therefore, that’s the price. Rumors now swirling allege da Vinci didn’t actually complete the picture himself. If true, it could be worth very little.
Then there’s the dream of buying a nice painting from a starving artist who later becomes the next Andy Warhol.
Warhol himself was once a starving artist. I know because a grandfather of a close friend of mine gave Andy kitchen appliances in exchange for a bunch of his paintings. He held on to those paintings and others because he liked them. When he died, he left his hoard to a fine art museum along with a large donation sufficient to construct a wing now housing them.
The odds of finding the next Warhol are close to zero. They’re worse than picking the next junior gold stock that will make a blockbuster discovery. Essentially, forget about it.
How I Bought Art Profitably
Take a look at the piece below. It’s called Triangular Yellows by Richard Anuszkiewicz. I picked it up from the framing shop recently.
Richard Anuszkiewicz, Triangular Yellows
I like this piece because it’s mathematical. When you look at the arms and base of the triangle closely, they appear curved, almost tubular. If you zoom in, you’ll have to excuse the glare from the gallery lights reflecting off the glass.
Anuszkiewicz made the two-dimensional piece appear three-dimensional by narrowing the distance between the soft blue lines running down the triangle’s arms and base. This piece is not a painting. It’s six colored lithographic prints carefully assembled on top of each other.
I almost bought this last year, but I hesitated. When I saw it this year, the price was 12.5% higher. I bought it anyway because I like looking at it.
Anuszkiewicz produced 40 prints of the piece I bought. He personally signed and numbered each of them. There’s also a small watermark imprint from the studio where I bought it. If I want to sell it, they’d prefer I let them do it. I have four pieces from this studio, and I could sell any of them fairly quickly if I needed to.
I Got Some Advice Along the Way
A few years ago, a friend introduced me to an older couple in town. She told the couple I was interested in art and thought we should meet. They’re in their 80s. Out of respect, it’s better I not mention them by name.
They invited me to their home one afternoon. It’s a winding ranch-style house with a 180-degree westward view of the bay. They see the sun set on the water 365 days a year.
Every room in the house had beautiful art covering the walls, even the bathrooms. Some pieces I recognized. Many I didn’t. They even had a storage closet filled with unframed pieces. I quickly realized this was a hobby, a passion, and an investment.
My host began to tell me that his wife found art when their four kids moved out. Like many housewives, she struggled with the abrupt change that comes after two decades of purpose vanishes overnight. He encouraged her to find a hobby. She found art.
She stumbled on a burgeoning program at the local college. It built an over-equipped art studio on campus. It then lured up-and-coming professional artists into spending one month of residency on-site creating anything they wanted to. The only catch was they’d have to leave behind a signed, numbered series of their best piece.
The college’s studio director then went to the local community looking for donations. He promised key donors they’d get the right to buy signed, numbered, limited edition prints several times per year in exchange for supporting his radical workshop. He called it Graphicstudio.
That was in the 1960s. Over the ensuing years, artists like Roy Lichtenstein, Robert Mapplethorpe, Alex Katz, Jim Dine, and dozens of others spent time at the studio. They all left behind a signed, numbered series of prints for donors and the college.
The studio is full of incredible art produced by notable artists. Some, like pop artist Christian Marclay, are up-and-coming now. One of his pieces is for sale right now for $72,000. Just a few years ago, it was $5,000. Between then and now, Marclay’s work ended up in notable museums around the world, boosting demand for his work.
The college sells pieces slowly, which to some degree controls the price. It’s rare to see more than one of a series available for sale.
Take this piece, for example. It’s by Alex Katz. The material used in this print is cyanotype, also used in blueprints.
In blueprints, the background is cyanotype and the structure is white. In this case, Katz did the opposite, using cyanotype as the medium.
I bought this piece last year. In May, another donor had his for sale. The asking price was 11% higher than what I paid.
Alex Katz, White Hat and Sunglasses
There are 25 of these prints in total. I found one other for sale in Europe for €10,000. Alex Katz is a notable artist. He’s also 91 years old. I’m optimistic this piece will appreciate in value over time.
Price appreciation is good. Having a way to unload the art if needed is even more important. I doubt the crown prince could find a buyer willing to pay $500 million or $1 billion for his Salvator Mundi. That’s of course assuming it’s a real da Vinci.
On the other hand, I feel fairly certain I could sell my Katz, though I can’t imagine wanting to. The piece is a pleasure to look at every day.
If you want to build your own collection of art, the first step is the most fun. Get out and see as much art as you can. Find interesting pieces, artists, and venues, and visit them. Sit on a bench and look at the pictures that speak to you. When you find something you want to look at every day, buy it. Buy it because you like it, not because you think you’ll make a quick buck selling it.
Remember, art is one of life’s most selfish pleasures. All you have to do is enjoy it. Best of all, it’s completely subjective. Only you get to decide the difference between good and great art.
Editor, Strategic Investor
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