9 APRIL 1977, Page 24


Collecting or investing?

Eugene Victor Thaw

The relationship to works of art of those fortunate enough to possess them has changed radically over the last thirty years. At first sight there appears to have been a great renaissance of the collecting urge, both public and private, since the Second WOrld War. However, if we inspect this seemingly civilised phenomenon more closely, we will see that there has actually been a gradual shift of emphasis away from collecting art towards the very different activity of investing in it.

The aggressive ambitions of the London auction houses with their increasingly strident publicity about ever-higher record prices have played a role in this transformation of attitudes. Tax laws, whether generous or restrictive, play a further role in dictating investment strategies for works of art. The recent instability of currencies has still further entrenched this approach towards the acquisition of art, which an oldfashioned connoisseur would consider a perversion.

For the last twenty years at virtually every well-heeled gathering in London or New York, someone would sooner or later bring up the subject of having a work of art valued, or revalued, so much so that in my career as a New York art dealer, I found I was spending more time 'appraising' pictures than in buying or selling. There seemed to be a constant need on the part of owners for reassurance that their art was `all right,' that it was holding its value or going up. The idea of buying more would seem eccentric in most of the cases I have in mind if the presupposition of the value going up were not supportable.

Concern with monetary value when acquiring art means that the buyer is inevitably poised to sell again. The investor, unlike the collector, is therefore only a temporary and accidental custodian. His very volatility contributes weakness to the market he wishes to see strong. (A painting available for the first time from an old collection is much more enticing than an equivalent work known to have been on the market.) Preoccupation with cash value infects the inheritor of art works as much as the active buyer. No longer can family treasures calmly be passed on to be cherished by ensuing generations. That works of art are 'Property' like land and buildings is a recognised fact of life in most countries. In France, much inherited art is owned in secrecy which frustrates scholarship. There are Chardins and Fragonards once bought by connoisseurs, inherited by nephews and nieces who now bolt the doors of shabby bourgeois apartments, afraid to reveal their ownership to the tax man or the burglar. In both England and America elaborate and lengthy plotting with accountants and attorneys seems as much a part of art collecting as the activities of the scholars, critics and experts who attribute, study or publish the objects themselves (and, incidentally, create or destroy value by their opinions).

Consider, for a moment, the different attitudes inherent in the terms collector and investor. My mind immediately jumps to a situation in which each has possession of a supreme work of art. The collector, badgered with offers, refuses to sell no, matter what the price. The investor, basically interested in a profit, carefully promotes an offer, above the going market, if possible, and sells. Conversely, in studying a purchase the collector, ideally, is concerned with the quality of an object, how he likes it and whether he can accommodate it. The investor is interested, of course, in whether and how soon it will be worth more than he must pay for it. (In the Old Master field, the collector will buy a fine anonymous work, the in ve.st or requires a name.)

Curiously, one syndrome of the art market, especially in America, which somewhat balances or negates the preoccupation with investment has been the possibility of achieving status by owning art. While this might be considered as pernicious and philistine a motive as investing, it has led to the formation and retention of some quite remarkable collections which, to achieve their status-driven apotheoses, have had to be given to the public via the art museums.

Yet, in today's 'Alice in Wonderland' world of art and economics the museum, once the ultimate bastion of the true collecting spirit, systematically acquiring for the 'ages,' contemptuous of momentary market trends, has reversed roles in several publicised cases and has wrapped itself in the mantle of the investor-trader. The 'de-accessioning' scandals in the US were only the tip of a huge iceberg of the artdealing done by collecting institutions. Not all of it was misguided but the change of philosophy is epitomised in the remark of a trustee of the Metropolitan Museum who, in a press interview, compared the works in a museum's collection to a 'portfolio of shares' which should be examined and revised every so often.

Is it, nevertheless, possible to invest in art successfully ? Of course it is—as successfully as in property or in shares. Making a killing is possible and losing a very great deal is also possible. If only one had bought IBM in 1945 . . .! If only one had bought Tiffany lamps in 1945 or Paul Klee watercolours! I dare say the profits would be comparable. except that shares usually pay dividends and art never does. Also, the commission for buying and selling shares is nominal. With art, the dealer or auctioneer takes a big slice of the pie. One could also have bought, in 1945, in New York, any number of paintings hY Louis Eilshemius, a prolific quasi-naive artist who then was the toast of the 57th Street galleries. Everyone bought some, everl the great connoisseur Duncan Phillips for his museum in Washington. Now, thirty years later, one might with luck obtain the same dollar price for an Eilshernius as prevailed then. Do you remember Bernard Buffet, a hot number in the 1950s? PitY, the holder of a large group of Buffets todaY The fever ran so high in the heyday fnr post-war abstract art in Paris that a New York museum curator at a dinner men; tioned a young artist whose work he likeo only to notice two men leave the dinner table to telephone their dealers. Somehow, in deciding what to buy and when to sell, the art investor, as I have come, to know the type, is apt to be clumsy a° inept. I have had to deal over many years with a number of individuals who systematically set out to invest in a particular school of art or work by a single artist,: Almost always, they chose poorly anu while not always financially hurt (since inflation has infected almost everythill)r' they would have done spectacularly bette with other choices. , There is a moral to all of this. 1 carlOt prove it,. but only give it as an impres,n gained from experience. Never consciouslY, invest hinat oart.nlelowbueyves without t a meanpsrcitrii)//aew.rcy concern for profit usually turns out profitable after all. In art, taste and ill:To' ment, not earnings reports, are the guides r, value. The real collector is the win° every time.