Art is a high-risk business

Never before have so many people in so many places collected works of art. In the past decade, the auction houses in particular have made heroic efforts to expand their markets, both by reaching out to emerging economies and by embracing new technologies. Thanks to instant translation by online search engines and live online auction platforms, it is now as easy to buy a work of art offered by an English provincial auction house or a Manhattan dealer while sitting in Guangzhou as it is from Guildford. The international art market has become global, and art is now seen as an asset class for investors.

Given the current performance of the global financial and property markets, it is probably fair to say that more people than ever are tempted to put their money in works of art. Certainly it is an appealing idea. Works of art are more interesting to look at than a safe full of bonds. And, of course, you can hardly lose. That, at least, is what anyone scanning the collecting pages of newspapers or magazines might be forgiven for thinking. Stories of works of art acquired for hundreds and sold for millions are legion, the very stuff of headlines.

As I write, Christie’s has announced the star turn of its Post-War and Contemporary Art evening sale in New York on 10 November: Andy Warhol’s ‘Big Campbell’s Soup Can with Can Opener (Vegetable)’ of 1962. It made its last auction appearance in 1986 when it was acquired by the London dealer James Mayor for $264,000. His client, Barney Ebsworth, is now selling it with an estimate of $30–50 million.

It is in the art trade’s interest to tell punters the good news — and human nature for collectors to dwell on their successes. Who ever heard a Wall Street trader announce to a room that he had bought a Richard Prince ‘Nurse’ painting for $8 million and sold it for less than $3 million? Yet, as veteran London picture dealer Julian Agnew wryly put it, ‘buying art is a high-risk business’.