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May 04, 2006
Like the NASDAQ in 1998?
The art auctions started in New York on Tuesday, with Picasso's Dora Maar au Chat the biggest item to go on the block. It has been interesting to watch speculation that the art market is in bubble, with some arguing that it's crazy that a painting of Maar of moderate importance would get a pre-auction estimate of $50M.
Maar was a Paris-based photographer with whom Picasso had a stormy affair from 1936 to 1945. She often photographed him, and he painted her extensively. Much of the memorabilia from their romance was kept private by Maar until her death in 1997, and it is the subject of a fascinating exhibit at Paris's Picasso Museum.
With that pre-auction estimate of $50M, it was all the more surprising when Dora Maar au Chat sold for $95.2M yesterday. That makes it the second most expensive artwork ever sold, behind only Picaso's Garçon à la Pipe, an ugly painting of minor significance that fetched $104M last year.
Although there is widespread concern of an overheated art market, I am bullish on art, wine, and virtually any other luxury item of limited supply. Over the long term, the many new wealthy people in the world--in China, in India, in the Middle East--will push up demand for Picassos, fine Bordeaux wines, coastal real estate, etc. Meanwhile, the supply of these sort of things is fixed. There will never be more Picassos made, Bordeaux only has so many vines, and it's very expensive to make new tropical islands. If I had $100M, I'd consider art by big names to be a good long-term investment.
Posted by adrianjo at May 4, 2006 07:00 PM