ARTS
Sale-rooms
New York
number-
Peter Watson
A►l this fuss about the EMS. What about the SMS — the Sotheby's Monetary System? There is no doubt about its efficiency and, given the way prices have been rising, it is more of a ladder than a snake.
Even so, a week from now the art world may have shifted on its axis yet again. I have mentioned before the fact that in New York, on Tuesday and Wednesday of the coming week, six pictures may well change hands each for $20 million or more. Out of 74 lots in the Sotheby's sale, all but ten of the pictures are now valued at $1 million or thereabouts. That is the price of admission these days to the top sales. Dubuffet, Bourdelle, Marino Marini, Magritte, Giacometti and Kokoschka are all in this bracket now. If everything in the Sotheby's sale were to fetch its high estimate, the evening's tally would be $254 million. The SMS would surely please M. Delors and Mrs Thatcher.
The star of the week, indeed of the year and just conceivably of all time, is Picasso's 'Au Lapin Agile', painted in 1904 and in fact a portrait of himself dressed as harle- quin, and of Germaine Pichot, a model whom he believed had provoked the suicide of a friend. Sotheby's hope that this picture will match in price his other self- portrait, 'Yo Picasso', which fetched $47.85 million last May. In their heart of hearts they are even hoping to see it outstrip Van Gogh's 'Irises' which, at $53.9 million, is still the all7time world heavyweight champion in the auction ring.
But if 'Au Lapin Agile' will attract the heavy numbers, the smart money is on another Picasso a little earlier in the same sale. This is `Le Miroir', a much later picture painted in 1932 when the great man had just turned 50 and was in full command of his powers. He had recently acquired the Chateau de Boisgeloup, an hour from Paris, and was at his most relaxed. Both bold and tender, 'Le Miroir' is by an artist who is very different from either the anxious young man in the earlier years of the century or the angry and perhaps self-disgusted old man of the 1960s. Esti- mated at $20-30 million, its price is as out of reach for most of us as is that for 'Au Lapin Agile'. But in many ways it is the better investment.
The other picture in the sale which will be of intense financial interest to the trade is Manet's `La Promenade'. Showing a woman dressed in black, with very red lips, this picture at present belongs to Alan Bond and for all these reasons its nickname at Sotheby's has become 'Kiss of Death'.
That may not be entirely fair because, by a strange coincidence, this picture appeared at auction in 1958 at the legen- dary Goldschmidt sale, as did Manet's other work, 'Rue Mosnier aux Drapeaux', which also comes up for sale this week, at Christie's on Tuesday. At the 1958 sale the two Manets were sold for sums within 30 Picasso's 'Le Miroir', 1932, to be sold by Sotheby's in New York next week per cent of each other, yet this week the 'Rue Mosnier' is reckoned to be worth 420-30 million whereas Bond's picture is estimated at a 'mere' $10-14 million. The 30 per cent gap has widened to at least 50 per cent and perhaps as much as 100 per cent. Either Bond's picture is seriously underpriced, and he is in for a pleasant surprise, or the saga of 'Irises' really has made his name the kiss of death.
While the microphones and cameras are trained on these number-crunching can- vases, evidence continues to grow that, when the lens sinks to the bottom line, the art business isn't as accountant-friendly as it is made to appear. The experience of the British Rail Pension Fund has been well documented, in these pages and elsewhere, and shows that their investment was hardly worth the effort, in the sense that they could have made just as much money on the stock market without going to all the trouble of learning something new. Now comes evidence from America that another collection, much trumpeted by Sotheby's at the time, did rather worse than that.
This was the Guterman collection, put together by Gerald Guterman in the years 1981-86 and consisting of 47 Dutch and Flemish old masters. They were sold in January of last year amid the usual hoopla, as if New York were seeing a royal wedding, a Brian Walden interview and the privatisation of water all at once. Yet in an article in the Southern Economic Jour- nal, a bunch of economists from the University of Zurich point out that in this case 17 of the works failed to sell. Furth- ermore, they have tracked down the purch- ase price of 14 of the paintings that did sell and calculated the return on investment. They conclude that the pictures were bought for a total of $2.7 million and sold for $4.8 million. That produced a net real return (after inflation) of 3.2 per cent per year. If Guterman had put his money in US government bonds he would have got 6.9 per cent and if he had put it into industrial shares he would have got 7.7 per cent, in both cases more than double what the art world gave him.
It may be argued that Guterman did not buy his pictures for investment — though he went to auction fairly soon after he acquired them. But in any case this study reinforces the BRPF experience that, even at the very top, investing in art, as invest- ment, is as reliable as a Lebanon ceasefire.
Which brings me to the latest Art Market Bulletin put out by Sotheby's. This is edited by two trained statisticians, and journalists are always warned by them about misuse of the material. This is fair enough but it then comes as a hit much to see, in this current issue, the misuse of lay- out in the Bulletin from which readers could readily draw the wrong conclusions about the material presented. For example, under the heading 'Impressionist paintings' we find the line: 'Annual Compound Growth Rate of 44.4 per cent', with an impressive-looking graph beneath it. It is only on closer inspection that it becomes clear that this fantastic figure of 44.4 per cent applies only to one painting. The same misleading layout is used for silver, mod- ern paintings, old master prints and Chinese ceramics. A casual perusal of this `statistical' document appears to suggest that these areas of the market are impro- ving at the rate of at least seven and as much as 44 per cent, when in fact the document is only talking about seven works in toto.
This really will not do. Sotheby's are sensitive to accusations of hype and always ask for chapter and verse because, they argue, it never happens. So let's spell it out: THIS IS HYPE.
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