Art Investment (1)
Unlike ordinary commodities, paintings were works of art. And works of art sold for prices that had nothing to do with production cost.
The biggest factor affecting the price of a painting wasn’t the size of the canvas or the cost of the paint, but the painter’s reputation.
If a work by an unknown artist was revealed to be by a famous one, the price could leap by thousands, even tens of thousands of times over.
In other words, it was a way to make a fortune as fast as possible without needing much capital!
Painting, huh....
When ordinary people thought of investment products, they usually pictured stocks or real estate. If you knew the field, you might add bonds, commodities, derivatives, and the like.
But there was a market in this world that was far more stable than gold and could generate steady profits.
Art.
After the financial crisis that had nearly collapsed the world, the global economy had begun growing again.
Countries flooded the market with money to keep their economies alive, and as asset values soared relative to labor income, the gap between rich and poor widened even further.
While poor people still struggled in poverty, the rich only got richer.
In that environment, the art market went through an enormous boom.
Silicon Valley founders who had cashed out through IPOs, owners of prestigious sports franchises, Wall Street hedge fund managers, real-estate tycoons—they bought up anything that looked remotely valuable.
Over the past few years, it would have been no exaggeration to say the art market had gone mad. Works by famous painters climbed in value almost daily, and auction prices broke records year after year.
The most expensive painting ever sold went for well over 400 million dollars.
It made sense, too. The painter was famous enough that everyone knew his name, he had died long ago, and he had left behind fewer than twenty paintings.
Wait.
Where is that painting now?
The painting wouldn’t come to auction for another seven years.
Two people involved in the art world bought the work, which had been sleeping in a gallery storage room, and spent millions on restoration and authentication.
As a result, it was confirmed to be an authentic work by a famous master, and they sold it to a Russian billionaire for 100 million dollars.
After that, the billionaire put it back up at Christie's, where it went for the highest price in auction history.
By now, it should still be in a gallery.
What was the name of that gallery again?
I wasn’t some insider in the art world; I’d only seen the article by chance as I passed it.
I remembered the painting and the artist, but not which gallery had sold it.
Wasn’t it some gallery in Chicago?
I booted up my laptop and searched for Chicago gallery listings. There were dozens of famous galleries alone, and if you included the smaller and mid-sized ones, there had to be well over a hundred.
Could I really find it?
Robert Fandel.
With his bulky frame and brown curls, he was a New York gallerist and a well-known figure in the art world.
Robert had agreed to meet his friend and fellow dealer Patrick Walsh at a restaurant in Manhattan. A moment later, Patrick arrived, sat down, and immediately asked in a hurry,
“You heard the news?”
“What news?”
“That Ranksy set up a street stall in Central Park and sold his paintings for sixty dollars. Is that really true?”
Two days earlier, a post had gone up on Twitter.
On the surface, it didn’t seem like anything special.
But the person who had posted it was Ranksy.
Who was Ranksy?
He was, without exaggeration, the biggest star in the art world at the moment. Even among Robert’s clients, there were lines of people who wanted to buy his work.
The internet and social media exploded.
The moment Robert saw the post, he nearly fainted.
He was a New Yorker, and Central Park was the place he loved most. He had taken a walk there that day, and he’d seen a little stall selling paintings.
Under ordinary circumstances, he would have passed it by. But for some reason, the sign hanging over the display—“Fine art at affordable prices. Don’t miss this opportunity!”—had irritated him.
So he’d stopped and looked at the paintings.
At a glance, Robert had realized the works resembled Ranksy’s style.
Now that Ranksy had become famous, imitators were everywhere. So Robert had assumed the painter behind the stall was just another one of them.
There was no way Ranksy paintings were being sold at a street stall in real life.
And then it had actually happened.
Impossible! Those really were Ranksy paintings?
Thousands of New Yorkers who saw Ranksy’s tweet all rushed to Central Park at once, and Robert was no different.
Along with everyone else, he combed through the vast park as if searching for a single needle in a haystack, looking for the old man who had sold the paintings. But by then, both the stall and the old man had vanished without a trace.
People lingered and wandered around, unable to leave in case the stall opened again, and the media came to cover the spectacle.
Just then, Patrick’s phone rang with an alert.
“Hey! Ranksy just posted again.”
Patrick burst out laughing as he read it.
“Pffft! What an absolute lunatic. He looks at a Ranksy painting and says he can’t even draw a line properly? What kind of idiot would say something like that?”
...
Yeah. That idiot was me.
“He said he was a gallerist, though. If he’s a New York gallerist, maybe he’s someone we know? Who the hell was it? If he’s reading this right now, he must want to shoot himself in the head.”
...
Yeah. That was exactly how I felt.
At least he hadn’t revealed his name. That was a huge relief.
If he had, he would have become the laughingstock of the art world for years to come.
While we were talking, another tweet went up.
A Korean traveler?
When I’d looked back for a second after leaving the stall, I thought I’d seen a young Asian man talking to the old man about something.
Don’t tell me that bastard bought all the paintings?
I could feel my insides twisting.
Those paintings you bought? They should have been mine!
If I had only seen this on Twitter like everyone else, I wouldn’t have felt nearly this cheated. But I had seen those paintings with my own eyes right there on the spot!
If I’d known they were Ranksy originals, I would have bought every single one, even if it had cost me a hundred times the asking price.
What would all those paintings be worth?
It was as if dozens of lottery tickets had been ripped out of my hands in front of me.
Patrick, who had no idea what I was feeling, kept going.
“A Korean guy? Man, this guy hit the jackpot.”
My belief had always been that a painting should end up in the hands of someone who truly understood its value.
And in my eyes, the value of a painting was the same thing as its price.
If I’d bought those works, I could have dressed them up beautifully and sold them to clients for the highest possible price.
Would he even know those were authentic Ranksy paintings? If he put them up for auction, they’d fetch at least half a million dollars. Is he just going to hand them out to people around him or hang them in his living room?
The more I thought about it, the hotter my gut burned. My throat felt dry, so I downed the rest of my beer in one shot.
“Shouldn’t we go find this Korean guy?”
“And do what?”
“Tell him to sell the Ranksy paintings, obviously.”
Unless he lived in New York, how was anyone supposed to find a traveling Korean tourist?
I shook my head.
“Let’s stop talking about that.”
“Why? You usually go crazy over anything Ranksy.”
...
He wasn’t wrong.
In fact, even now I felt like I might go crazy.
“Forget it. Let’s talk business.”
Patrick nodded.
“All right. This one’s the real thing?”
“Take a look.”
I showed him a photo on my phone.
What appeared on the screen was a religious painting from the early sixteenth century.
The work was only 45.4 centimeters wide and 65.6 centimeters tall. It had been overpainted several times and badly damaged besides. The artist was unknown. And yet, because of its historical importance, the asking price was already up to 11,000 dollars.
Restoring it would require an investment of at least ten to a hundred times the painting’s price. If you handed it over to a proper restoration specialist, that would cost another ten times on top of that.
Since an unknown artist’s work could hardly be sold for much even after restoration, most of the time nobody bothered to restore such paintings at all.
Patrick took a swig of beer and said,
“You’re not going to strike out again, are you?”
I looked at him with absolute confidence.
“This time feels different. There’s definitely something here.”
The painting we were after was worth something on a completely different scale from a Ranksy piece.
I had only learned where it was a few days ago.
If that gallery hadn’t posted its catalog on its website, I never would have known.
“Where is it?”
“It’s called Eppenfrit Gallery. In Chicago.”
We had searched all over Europe trying to track down the painting’s trail. We had gone back and forth between France, England, and Italy more times than I could count, and more than once we had come back empty-handed.
Along the way, we had picked up a few worthwhile pieces, but none of them were the one we wanted.
And yet it had been in Chicago, practically next door.
Patrick’s eyes lit up.
“If that really is the painting, it’ll blow every auction record in art history out of the water.”
The value of a painting rose when the artist died. The reason was simple: scarcity.
A dead artist’s work could no longer enter the market.
Picasso, Vincent van Gogh, Paul Gauguin, Paul Cézanne, Jackson Pollock, Roy Lichtenstein, Andy Warhol, Amedeo Modigliani, Rembrandt, and so on.
Their paintings were worth anywhere from 100 million dollars to well over 300 million dollars now.
But even if you combined all of their reputations, they still wouldn’t come close to his.
If the man who had painted this work really was him, then a value beyond that would make perfect sense.
“Shouldn’t we call the gallery right away?”
At my friend’s question, I shook my head.
“It’s a painting that’s been forgotten in storage for over ten years. No need to stir up trouble for nothing.”