Don’t Collect the Artist

Don't Collect the Artist

Those of us familiar with the art world constantly hear the names of famous artists thrown around.  Andy Warhol, Jasper Johns, Roy Lichtenstein and Willem de Kooning are just a few of the modern artists whispered about in hushed, reverent tones – almost as if their names invoke a supernatural power.  These artists and their many contemporaries usually have their works breathlessly described with words like ground-breaking, powerful, avant-garde and unique.  Their works also often sell for astonishingly high sums of money.  10 million dollars – 20 million dollars – 30 million dollars – it almost seems as if there is no limit to the prices some works of modern art can command.  And yet, these artists’ works are rarely good investments.  Why?

To be blunt, they are fads.  The people paying outrageous sums of money for non-representational blobs of brightly colored paint on a white canvas are not really art connoisseurs.  They wish to be perceived this way, but wishing doesn’t make it so.  Today’s modern art collectors are largely nouveau riche financial services executives or wealthy technology entrepreneurs who want to be recognized by their peers as cultured individuals.  Collecting art is a good way for them to appear as urbane sophisticates.  And no art serves this purpose better than abstract works from well-known modern artists.  Most modern art can be simultaneously opaque, unapproachable and sometimes, quite frankly, unconscionably ugly.  But these works are popular right now and make for great conversation pieces.  So out comes the checkbook and before too long another record price is set.

And now we’ve arrived at the heart of the matter.  Most of these hedge fund manager and Silicon Valley CEO collectors don’t know the first thing about art.  They are just parroting what they hear their jet-setting friends and business associates say.  Instead of understanding and appreciating the art itself, they are “collecting the artist”.  In some ways this is a very human reaction to what can be a very intimidating field of study.  Art is often complicated; meaningful commentary on a work can rarely be distilled into a glib, dinner-party sound bite.  And if you don’t really care about art – but only about impressing your very wealthy colleagues – then collecting the artist (especially modern artist) might seem like a reasonable move.

All of this focus on artists instead of art creates an opportunity for those investors who are willing to educate themselves properly and not be deluded by the latest craze.  Real art is instantly, undeniably beautiful.  It stands on its own merits, never relying upon a famous artist for its desirability.  When reasonably priced, authentic, high quality art tends to appreciate in monetary terms far into the future, regardless of who created it.  Don’t be caught chasing a hot artist in a fad that you don’t understand.  Always collect art for the beauty and allure of work itself; never just blindly “collect the artist”.

14K White Gold Vintage 17 Jewels Waltham Pocket Watch 58.5g Perfect Condition

14K White Gold Vintage 17 Jewels Waltham Pocket Watch 58.5g Perfect Condition
Photo Credit: gallotreasures

14K White Gold Vintage 17 Jewels Waltham Pocket Watch 58.5g Perfect Condition

Buy It Now Price: $599.99 (price as of 2016; item no longer available)

Pros:

-This is an antique Waltham pocket watch from the late 1920s.  It is a set in a solid 14 karat white gold, Art Deco style, open face case.  It weighs 58.5 grams and measures 1.75 inches (44.5 mm) in diameter.

-Old mechanical watches manufactured by American companies like Elgin, Hamilton and Waltham were made to very high standards and are significantly undervalued in today’s vintage watch market.

-The movement for this Waltham pocket watch is a grade 225, size 12 with 17 jewels.  A size 12 was the smallest movement that was typically used for men’s pocket watches during the early 20th century.

-The movement looks like it is in reasonable condition, with no areas of rust visible.  If an antique mechanical watch movement shows significant signs of rust, it is often not worthwhile or cost effective to try to restore it.

-The chic, Arabic numeral watch dial is completely original and in great shape, with only very minor blemishes.  Original dials are extremely desirable on European mechanical watches, but buyers of American mechanical watches seem to be somewhat indifferent between original and refinished dials.  In any case, an original dial in good condition can’t be bad for either the aspiring collector or investor.

-The watch’s octagonal shape exudes classic 1920s Art Deco linear style.  The white gold case is also encrusted with an attractive diamond and cross pattern on the reverse.  The serial number on the movement (26677807) indicates it was manufactured in 1928, which is consistent with the watch’s magnificent Art Deco look.

-Although the seller does not give us the weight of the case alone, we can (imprecisely) estimate a lower bound by multiplying the total weight of the watch by 30%.  This gives us an estimated pure gold weight of very, very roughly 0.329 troy ounces (10.23 grams).  With gold trading at $1,230 a troy ounce, this gives us an approximate bullion value of $404.  So about 2/3rds of the $600 purchase price is intrinsic value, give or take.  This provides a reasonable safety net under our investment, limiting the possibility of loss.

 

Cons:

-Although the seller claims the watch runs and keeps good time, it would be wise to have the watch cleaned and serviced by a professional.  This will generally cost between $100 and $300, assuming no major repair work is necessary.

-Pocket watches from European luxury houses that are still manufactured and sold today like Rolex, Omega and Patek Philippe are very popular (and also expensive) right now.  Because it is from a defunct American manufacturer, this Waltham pocket watch is less desirable.  However, its price already reflects this fact.

-During the early 20th century, truly high end mechanical watches usually had 19, 21 or 23 jewels.  Watches with 15 or 17 jewel movements – like our featured Waltham pocket watch – were considered good, but not top tier.  It is not advisable to purchase a mechanical watch with less than 15 jewels for investment purposes unless it has some other compelling attribute.

The Five Aspects That Influence Art’s Desirability

The Five Aspects That Influence Art's Desirability

It is often said that beauty is in the eye of the beholder.  And nowhere is this statement repeated more often than in the world of fine art.  However, upon close examination there are actually some attributes that are effectively universally desirable.  And while any two individuals’ opinion of the same work of art can vary wildly, just five universal characteristics ultimately determine desirability.  These five qualities are: portability, quality materials and construction, durability, scarcity and stylistic zeitgeist.

Size matters, as the old saying goes, and bigger is better.  This is true regardless of whether the item in question is an old mine cut diamond set in a Victorian yellow-gold ring, an ancient Egyptian Ptolemaic bronze coin or an illuminated leaf of a French medieval manuscript.  Larger art works are visually impressive, more easily displayed and more readily appreciated by both connoisseurs and amateurs alike.  Therefore, when two items only differ in size, the larger example will be more desirable with collectors, all else being equal.  But this trend is only true as long as portability is preserved.  Once an antique exceeds approximately 12 inches (30 centimeters) on any axis it loses portability and is thus no longer investment grade for our purposes.  Objects above this size can certainly still be desirable – and many are – but it is no longer a given that larger automatically equates to more desirable.

Quality materials and construction are to fine antiques as top-notch ingredients prepared by a celebrated chef are to great cooking.  Use of the finest materials by the best craftsmen is a trait common to all outstanding antiques.  There is a reason that glittering precious metals, exotic tropical hardwoods and alluring semi-precious stones are recurring themes in the world of upscale antiques.  It is because the finest materials, when skillfully assembled, produce the most stunning works of art – the sort of masterpieces that are visually impressive and widely coveted.

Another aspect inexorably bound up with material quality is durability.  A well made antique will exhibit surprising durability, weathering the passing centuries with tremendous grace.  It will continue to look stunning even as more mundane items crumble to dust under time’s relentless assault.  Simply put, the finer things in life are invariably better made and, consequently, inherently more durable.  This holds true regardless of whether it’s an ancient Roman hardstone intaglio or a 1950’s era Omega Seamaster wristwatch.

When most of us think of expensive antiques or art, scarcity is often the first thing that comes to mind.  There is a good reason for that.  Truly fine art is rare.  Wars, natural disasters and neglect have, over the centuries, gradually whittled down the surviving pool of quality art and antiques.  Those works that remain are not only renowned for their aesthetic beauty and cultural importance, but also for their great rarity.

The final aspect that impacts desirability is what I call stylistic zeitgeist.  This concept deals with how purely a work of art reflects the cultural milieu of its time period.  For example, an Edwardian diamond choker that is stylistically focused will be much more desirable than a similar Edwardian diamond necklace that awkwardly incorporates transitional elements from the emerging Art Deco design language.  Connoisseurs simply assign more value to art that better embodies the characteristic qualities of a movement or time period.  In short, collectors wish their Georgian antiques to reflect Georgian style, their Art Nouveau works to exude Art Nouveau form and their Mid Century American art to epitomize Mid Century American design.

Antiques and fine art can be a fundamentally sound allocation decision in a sophisticated investment portfolio, but it is important to understand the elements that drive universal desirability before buying.  Adhering to the five attributes of portability, quality materials and construction, durability, scarcity and stylistic zeitgeist will help ensure good returns on your art investments.  Some items will have the right stuff while others won’t.  By using the five characteristics mentioned above you can more easily sort the good from the bad.

What an Amazing…Brown Diamond?

What an Amazing…Brown Diamond

It was a hot August day and I was trolling the antique stores on Charles Street in Boston for a deal.  The state of Massachusetts had declared a sales tax free weekend and I was looking to take advantage of it by investing some excess cash in antique jewelry or loose diamonds.  I had one antique store in particular that I favored for this sort of expedition.  I won’t name the shop, but it was a hole in the wall that had a good selection of antique jewelry and loose diamonds at reasonable prices.  After entering, I asked the proprietor behind the counter to show me everything he had.  After searching through his vintage jewelry with no luck I quickly moved onto his stock of loose diamonds.

I don’t know what his sources were, but he did brisk sales in loose stones.  Business was traditionally slow in August though, when a lot of dealers and customers went on vacation.  I think that is how I got lucky, finding a stone that I not only liked, but adored.  It was an off-color, old mine cut diamond of around 1.71 carats with good clarity.  It was a very fine stone in spite of its brown color, with superb fire and a great deal of warmth and charisma.  The diamond was undoubtedly at least a century old and possessed an ethereal charm that was difficult to put into words.

The price was almost too high for me to consider though, even without sales tax – about $2,000.  I asked the proprietor if his store would be open the next day and he answered affirmatively.  I then told him I might return tomorrow to buy the stone.  He peered at me suspiciously over his glasses and commented skeptically, “Sure, if you come back.”

Later, after I returned home, I told my wife I had found something absolutely amazing during my antiquing expedition.  Our exchange went something like this:

“What did you find?” asked my wife curiously.

I fumbled desperately in my mind as to how to reply before I resigned myself to reluctantly telling her the unpleasant truth.  “It’s a brown diamond,” I said sheepishly.

“A brown diamond?” echoed my wife incredulously.  “Why in the world would we want a brown diamond?”

“Well, brown isn’t quite the right word for it,” I protested weakly.  “You really have to see it to truly appreciate it,” I continued undeterred.  “Why don’t you come with me to the antique store tomorrow and we’ll look at it together.  If you aren’t impressed with the diamond, then we won’t buy it,” I offered timidly.

To my great relief at the time, my wife agreed to my proposal.  The next day I withdrew some money from the ATM and off we went to the antique store.  As we set foot inside the venerable establishment I realized just what a terrible bargain I had made with my wife.  The interior of the shop was not exactly conducive to selling…well…anything.

Pieces of dusty antique furniture were haphazardly stacked on top each other to form narrow aisles that forced customers to carefully navigate the store in single file.  The lighting was absolutely awful.  The cathedral ceilings were set with distant, tube-style florescent lights that cast a dim, clinical and solemn pallor over everything in the store.  The only natural light shown faintly from some extremely dirty plate glass windows on the far side of the store, partially obscured by mountains of old furniture and jumbles of miscellaneous antiques.  There wasn’t even a small table lamp to use as a makeshift spotlight on the store’s counter.  I immediately broke out into a cold sweat.  No gemstone, regardless of how amazing it might be, could possibly look good in this charnel lighting.

After quick introductions with the shopkeeper, he pulled out the paper parcel containing the stone and handed it over to me for examination.  I carefully unwrapped the color-challenged gem with much trepidation.  My spousal reputation was on the line here, not to mention the possibility of acquiring the coveted stone.  And then the diamond tumbled out in front of us, sparkling, sublime and supremely confident in its own immutable beauty.

My initial thought upon seeing the stone again was “Koh-i-noor,” referencing the famous Indian diamond now residing in the British Crown Jewels whose name translates from Persian as “Mountain of Light”.  The diamond in front of us was one of the most gorgeous stones I had ever laid eyes on.  It possessed an intense fire that is almost never seen in modern-cut stones.  Even in those drab surroundings, with the worst lighting imaginable, its facets sparkled seductively with delicate flashes of peach, pink, and salmon.  The diamond’s questionable brown hue was really closer to a light golden color than I had remembered as well.  Under normal circumstances, any tinge of color decreases the value of a white diamond, but this stone was intense enough that it could potentially be graded “light fancy” according to the GIA color scale – a very desirable trait.

Words truly did not do the gem justice, especially the word “brown.”  To my great relief, my very sensible wife was equally impressed.  After 15 minutes of negotiations we walked out of the antique store as proud owners of a fine, 1.71 carat, old mine cut, brown diamond.  It was one of the best antique purchases I ever made.  The stone is today undoubtedly worth substantially more than I paid for it, but I have no plans to sell anytime soon.  I think the lesson of the brown diamond is clear.  Sometime you just have to see an antique in person before you make a definitive judgment on it.  Sometimes brown isn’t as ugly as it sounds.