Friday, 4 July 2014

Bad Investments

From Bristol Post

A BRISTOL woman who invested her life savings in a painting by disgraced celebrity Rolf Harris says she fears it has been devalued by up to 90 per cent.

Sarah Gardiner, 35, bought Horses at the Lights months before the star was arrested to provide some financial security when she retired.

Harris was sentenced to five years and nine months in prison today after he was found guilty of 12 counts of indecent assault.

Apart from the problem that you might be buying art whose value is linked to a TV personality who no-one cares about when it turns out they're a nonce, art in general is a very bad investment. When you factor in the person making commissions when they sell it to you, the person making commissions when you sell, insurance costs and so forth. You also have to consider that art generally goes out of fashion over time. It nearly all decreases in value except a few exceptional works.

One problem is that our media (both news, and the likes of Antiques Roadshow) talks about the winners and gives the impression that antiques are a good investment. Stick your money in a tracker or national savings. Buy the art you like.

22 comments:

A K Haart said...

Years ago an antiques dealer told us his worst idea had been to collect old trouser presses.

He thought they might be the next big thing and he’d bought a shed load – literally. He couldn’t give them away.

Mark Wadsworth said...

But apparently an original Hitler watercolour sells for quite a bit, and his reputation is completely down the toilet.

The Stigler said...

AK,

I know a couple of antique dealers who grabbed stuff thinking it would be big, and then wasn't.

Mark,
About £5K. I guess if you're that notorious, people will pay for it as a piece of history. The last Lord Bath had some at Longleat as he was a fan of Hitler.

Bayard said...

Is £25 to £750 over 25 years a good investment? Mind you, my mother bought the picture because she liked it.

I can't see that a picture by Rolf Harris was ever going to be an "investment", even if he hadn't been done for groping. Antique furniture, on the other hand, whilst not being an investment, has the advantage of being well made (the crap stuff has long since fallen apart) and incredibly cheap if you compare it with the modern equivalent, i.e. handmade individually crafted pieces made from solid wood.

The Stigler said...

B,

Sounds good. Not saying art can't make money. If it does, it might be worth selling it.

And yes, antique wooden furniture of old is often a better deal than new stuff. It's better made, and even if it doesn't give a return on an investment, you get use of it for years and it doesn't fall in value like new stuff does. Even if you sell it back to the antique dealer, you'll get half the value. You don't get that with 2nd hand furniture.

Rich Tee said...

Maybe this person has the right idea:

"a plaque outside his childhood home was stolen before the local authority could remove it"

Perhaps they are wondering if they could get something for it on the black market, and they got it for free.

Or maybe they just wanted the scrap metal and figured nobody would want it anymore.

The Stigler said...

Rich Tee,

A council somewhere in the UK has painted over a mural he did.

Hwfa Morgan said...

TS, imagine the scene 100 years in the future. Rolf Harris has been rehabilitated (stranger things have happened) and his artwork is now incredibly rare and sought after. Then someone discovers an old photograph of this mural, long painted over....

The Stigler said...

Hwfa,

Not going to happen. Rolf is of this era, at one time loved because he entertained people, but his art isn't anything special enough to go beyond generations.

(but then, I think that the art that people will still be enjoying from our era is mostly things like cinema, not paintings).

Hwfa Morgan said...

TS, having read this, http://libertarianalliance.wordpress.com/2014/07/05/rolf-harris-beyond-reasonable-doubt-2-attachments/ his rehabilitation may be sooner than I thought, given the flimsiness of the evidence and the similarity the whole paedophile thing now bears to the C17th witchhunts. So the woman in the post may have the last laugh and the people who self-righteously destroyed their Harris artwork will be left feeling a bit less self-satisfied.

Graeme said...

it's a hell of a gamble...who knew that paintings by a murderer and pederast like Caravaggio would ever be saleable...

DBC Reed said...

@G There's no point in making comparisons with Caravaggio : the greatest; the nonpareil.
Whereas Rolf Harris??Have you seen his portrait of the Queen? Her teeth follow you round the room.

Derek said...

The problem here isn't Rolf Harris. It's lack of diversification. She bought one painting by one artist. That's gambling, not investing.

The Stigler said...

Derek,

No. Art is a bad investment.

Bayard said...

TS, as you point out, not always. I've just discovered my father made quite a good art investment, too: £120 to £2000 in 20 years. It seems that the secret is 1. only to buy art you like, because it's likely that there will be someone else who likes it too and 2. buy from the artist whenever you can: fewer middlemen to pay fees to and, if they are any good, more likelihood that their value will increase.

Bayard said...

DBCR, I've just googled it. Is it just the Australian connection that made me think she looks like Dame Edna without the glasses?

The Stigler said...

B,

Not always, but generally, it is. If you keep adding to the amount of art out there, it's only going to keep devaluing what's already there.

And yes, avoid art dealers as much as possible. Lots of art dealers use websites to promote themselves. What's a dealer adding to them?

Bayard said...

"If you keep adding to the amount of art out there, it's only going to keep devaluing what's already there."

I disagree: quite apart from the fact that nearly all the pictures that are going to keep their value and appreciate are by artists who are now dead, history shows that those artists, like Picasso who became collectable in their lifetime didn't devalue their work by producing more of it.

The reason why so many people fail to make any money when "investing" in art is the same reason why they do the same in the stock market: they buy rubbish because they think it is going to increase in value, not things that have any real value in the first place.

The Stigler said...

I disagree: quite apart from the fact that nearly all the pictures that are going to keep their value and appreciate are by artists who are now dead, history shows that those artists, like Picasso who became collectable in their lifetime didn't devalue their work by producing more of it.

But you've only selected an artist that became world famous. What about all the rest? What about the average artist that did a painting of a landscape in the 18th century that is now selling for £1-2K on eBay? You won't get an oil landscape today for much less than £500.

Bayard said...

I don't understand your point. People don't pay less for an artist's work if there is more to chose from. In fact, they are more likely to buy if they have a good choice: more chance of finding a picture they really like. So more art being produced doesn't depress the price of what's already out there. Art doesn't really respond to supply and demand because each piece is unique and you are buying that piece because you like it, or should be. Agreed, if you are buying it simply because it's by, say, Damien Hurst, then supply and demand would apply, but then buying a piece simply because it's by a famous artist is a quick way to lose money, unless you are buying "old masters".

"You won't get an oil landscape today for much less than £500."

Agreed, but if my father's picture is anything to go by, in twenty years it could be worth £8.5K.

The Stigler said...

People don't pay less for an artist's work if there is more to chose from. In fact, they are more likely to buy if they have a good choice: more chance of finding a picture they really like.

But at a certain point, they might find half a dozen works that they like.

Look at other artforms: there's some really cheap opera recordings because there's a lot of opera recordings nowadays.

Bayard said...

"But at a certain point, they might find half a dozen works that they like."

If they can only afford one, they will only buy one, but it doesn't make that one less valuable.

Music is not really comparable because two recordings of the the same piece of music are almost identical, so long as both are good quality.