The most difficult aspect of sensual investment is the cross current of culture – the pervasive influence of public attitudes and accumulated status that has greater effect on markets than does the fundamental factor of supply and demand. This phenomenon is best illustrated by comparison between stamps and paintings, where the value of one, the stamp, is entirely dictated by its rarity, not by its aesthetic appeal, whilst that of the painting is entirely due to its cultural status, not its rarity, nor in large part, its aesthetic appeal.
Cultural status is an elusive thing to grasp, especially in the context of time. It is easy to know now that the paintings of Colin McCahon are extremely valuable on the local auction market because they have high cultural status when measured against such things as their use as diplomatic gifts, their selection for retrospective exhibition in highly credible foreign venues, and in consequence, the prices they achieve at auction.
But for those investing in McCahon’s work 25 years ago, the momentum of cultural credibility had not yet reached the point where he could be assumed to be sound investment. Credibility founded on critical, academic and peer support gives currency in the high art areas of public culture.
Supply and demand does influence the art market, as can be seen when prices start to climb when top artist dies, effectively defining the scale of supply. But this only comes after the cultural momentum has already begun to build for specific artists during their careers, as dying is not good career move by itself.
So how do you pick the trend in an artist’s work, or indeed, in anything with strong cultural dimension such as wine? Yes, wine must be included here, as the cultural aspect is particularly strong in wine, best illustrated by the value of Champagne. Sure, this is especially fine sparkling wine, but no better in qualitative terms than number of others produced in various parts of the world. What sets Champagne apart is that it is produced in the very heart of France: where the French state was originally formed; where it was fought for in pan-European wars dating back almost 2000 years; where the French language was established and where its Kings were crowned up until the time of the revolution. An English equivalent would be brewery out the back of Westminster Abbey, with Stratford-upon-Avon branch.
Back to the question – the first thing to measure when looking for cultural capacity in any sensual investment is to consider the object [the investment] in these specifically cultural terms rather than its general popularity. It is best to start with what the critics say – agree with them or not, the good ones are litmus test of the general perception of an artist or winery, well informed on both public and intellectual aspects of their value.
Not that critics make the decision, of course, and often the best way to measure the long-term value of something is to take particular note of the poor critics – those who always get it wrong. In the wine world in the early ’80s there was one critic who in startling expression of incompetent taste managed to bag Penfolds Grange, Te Mata Estate Coleraine, Goldwater Cabernet/Merlot and Stonyridge Larose in one year. Someone investing in that critic’s impeccable incompetence would have cellar full of treasures today.
This was critic ‘on the make’ – trying to advance his particular career by slamming what other critics were exalting, and was an obvious poseur because he stood meticulously apart from the trend. So what you need is to measure the trend, and within that, find critic whose opinions you tend to agree with, and who has sharp eye, or nose, for the ‘real thing’.
It also pays to listen to insiders – artists who are always aware of where the competition lies. Keep asking them, painters, sculptors, winemakers, who the bright young things are if you want to get an advance murmur on who the future movers will be, then run your own ruler over them, read what the critics think, and also see what the artists themselves are investing in.
By this I mean you should look at their careers. Do they plan to build their future out of the art you are thinking about investing in? If not, then no point in you doing it, but if they are obviously in for the long haul, prepared to make sacrifices to make their art, then you are halfway there to making sound investment yourself.
None of this is foolproof, of course, but it does refine your search and limit the risks of bad investment. On the other hand, if you always buy only what you like, then whatever (value increase) you get is bonus – so long as you will always like it. Now that is another issue entirely.
Keith Stewart is well-known New Zealand wine writer and art critic.
