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Taking a Stand on the Art Market
Since the very days when townfolk traded a peck of corn for a pair of shoes, it has been the object, rather than a representation of an object, that has value.  You can eat the corn and wear the shoes, but you can't eat a dollar bill... nor can a $20 note strapped to your feet take you very far.  In the art market, the values of artworks has skyrocketed to unprecedented heights over the centuries, but the value is and always will be in the intrinsic value of what we see.

It's in the heart of man to create, and the driving force of creativity is what has brought us to our state of human development as a nation and a world system.  The art market has also developed as a reflection of this driving force of creativity.  It's a force that demands of us more than mere existance and basic biological needs.  It goes beyond the material, into a realm strictly reserved for mankind and his gifts and talents to write, compose, play or create.  Creativity, fully expressed, creates value... and money will always flow to value.  The art market is the one place, completely unique among all the capital ventures of the world, where creativity and its intrinsic value can be measured in terms of dollars and sense (or nonsense).


Granted, certain specific artworks have proven that they are much overvalued, as seen in recent settlements in the marketplace.  However, it's not because the art doesn't have value, but rather the glorification of the value has generated its own misgivings in the minds of buyers.  So, the question is... where can a buyer put his funds so that he can reasonably expect an honest return?

If you look at it with stark frankness, the owner of that $10 Mil Picasso that just sold already has his money in his pocket.  Good for him.  But the buyer just made a purchase at the top of the market, one that will not return him a profit in the current economy.  What does he have to look forward to?... I'd say, in all honesty, that he may see a return in five to ten years, but even that is uncertain if we look at how the future of the world is unfolding.  If he loves the art and can wait, all the better for him.  If he is looking for a return, where can he go to buy an equivilent artwork for a bargain, hoping there might be a pigeon out there who needs money now?  Maybe somewhere, but I doubt it.

In today's economy (and the help of the world wide web), a buyer has to do his homework.  Rather than take the word of any dealer or auction house, a smart buyer these days will put in his time to study his area of interest.  Just like he would study his favorite stocks or precious metal, the smart buyer will track his favorite artists and how they fare in the marketplace.  Some are easy to track, others are not.  However, if the buyer can develop good taste, his purchases should always have a bright future.  If he has no taste and no discernment for quality craftsmanship, he will probably stumble along with little more than a closet full of mediocre mercandise that will never offer a return, no matter how long he waits... especially if he is always going to someone else to tell him what is good or bad.

There are some Picasso paintings (yes, even the great Picasso) that do not have the kind of intrinsic value to ever return a buyer a profit.  On the other hand, there are some fabulous artworks by relatively minor artists with enough mojo that they will hold fast and grow in value through millennia of ups and downs of the marketplace.  Can we expect to find such pots of gold nearby to our own rainbows?... most certainly, the answer is "yes!".  Many times, the perfect investment lies right under our noses, if we will only take a moment to look.  And then another moment to study and compare.

So... study what you like.  Make your own discoveries on the road to discernment on why one artwork has a greater intrinsic value than others.  Find the key to that artist that attracts you, and then use it to unlock the world of real art investment... that is defined by both the sheer enjoyment of the art as well as the lasting value it has.  That's the one that will pay for your children's education when the time comes.

Enjoy the journey...

(Mr.) Gayle B. Tate
President, G. B. Tate & Sons Fine Art

If you have any questions or would like to pursue a line of discussion,
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