The Texas Masterpiece : ............................................ Fine Art Gallery & Art Cafe'

Art Article I

March, 2008

Should your wife be an artist, you probably take art for granted and just enjoy what your wife has created.  Some times you look at it more closely when you are waiting for others to go to church.

You see art at all levels from grade school to the fine museums.  Why, you ask, do people buy art?  Allow us to present to you a plausible answer.

Well, for the same reason that people buy anything beautiful.  Because they like it.

It doesn’t have to be the most beautiful in the world.  It just needs to fit the individual’s need.  The need may be decorative/thought provoking or for investment or some of both.

It has been that way for centuries.   And by the way if the art piece is an original and well done, the purchase represents a sideward transaction that simply replaces cash in the bank with a valuable product that is equally valuable and can last hundreds of years if cared for.

Quality that lasts hundreds of years is the difference.  If an asset lasts only a short time the value diminishes.  For example a Lexus we all know is a quality product.  However to justify the added cost from a Volkswagen many luxuries come into play.  Never the less the Lexus of yesteryear has little value.  The pleasure in between times must be great to justify the cost.  The same occurs with a bass boat or a luxury yacht.  Fine art is different.  Since it lasts hundreds of years and retains its relative value, the $70,000 art piece has a better chance of being worth $100,000 or more than the Lexus after ten years.  Meanwhile the art lover has enjoyed the art greatly as has the Lexus owner.  A quality lake home takes on more of the characteristics of the art piece than the Lexus.  The lake house costs more initially and requires maintenance and taxes.  If you move to another part of the country you would normally sell the lake house and the market may not be advantageous. For the art piece you simply ask the mover to put it in the truck and take it to your next address.  For art lovers in unstable countries this “portable “ feature is of great importance.

Like any non-liquid asset, art and real estate depend on quality.  The greater the quality the greater the demand, the faster the resale and that usually impacts the price.  Unlike real estate, that is limited to local purchasers the art is sold to a worldwide market now that the Internet has entered the dynamic.  And that has magnified the desire for quality art.  There is more money for quality international art than there are artists that produce at that level.  It is not unlike the demand for sports superstars whose performance value is magnified now that they can be seen on world wide television.  Only a few talented people can reach that level. 

This is an interesting twist.  For example, a recent purchase of an art piece amounted to $138,000,000 (Million).  Unlike the artist that produced the valuable painting, a sports superstar receives all of his reward as the star gets better and in greater demand.  Then the sports star gets older and the rewards end.  The artist sells his art as he goes along just as the athlete but the painting remains.  The performance of an athletic star is one event.  Maybe it is two hours then it is over.  The performance of an artist is maybe several weeks but it continues. The artist sells his effort in the form of a painting, to some one else, a buyer, and the buyer receives the future reward when the buyer resells the painting.  It is an interesting dynamic.  In the above case of the Gustav Klimt painting the artist received the initial commission for the work but not the future reward.  The grand daughter of the purchaser received the huge reward. In that way the participation of future rewards for art is not unlike the future rewards for real estate and corporate stocks

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The point is that there were and are quality artists past and present that have produced very valuable paintings.  Most important to underscore is that there are quality artists in Texas just like there are world-class scientists and sports stars.  I encourage you to seek out the accomplished artists and support them and participate in the rewards of the future of art.  There is a lot to it and much pleasure along the way including numerous wonderful gatherings of interesting people from wide educational backgrounds and different interests discussing agreeable subject matters with possibly a little fine wine, cheese and pleasant music.  Art will add a wonderful extra to your life.

Of course there are thousands of quality paintings and few are sold in the millions of dollars.  Quality paintings do change in value just like the millions of different pieces of real estate.  With real estate investments you need to know a little about the product before you buy.  With art, it is the same and in future articles we will endeavor to tell you something about the technical part of art as well as the “players” that seem to be the most talented and the way an individual can buy and sell art to the world market.  See you again soon.