Buying Art in the Information Age : Open Thread

I remember it like it was yesterday. Art market articles across the spectrum of the art press spreading the story in sync of how the new boom of the early 2000's was quite different from the previous booms because the collectors buying then were so much better informed than those who had come before them. In 2003, for example, art market guru Richard Polsky wrote:

In this day and age, with information being so readily available, both collectors and dealers are unusually well-informed about what works of art are worth. The good news is that there are no surprises. The bad news is don't expect to steal a deal.

Uh...er....Surprise!

In yesterday's New York Times, in an article titled "Art Prices (and Mood) Inch Back Up," Carol Vogel provided an update on the what it means to be "unusually well-informed" now:

Last fall there was a sense of panic because nobody knew if prices had hit bottom, not just for art but for any asset, and even the richest collectors froze. This season was all about the estimates. “Ultimately that’s what provided buyers with the confidence to bid,” said Tobias Meyer, worldwide head of Sotheby’s contemporary art department, who added that for some artists, prices have dropped more than 40 percent from their high two years ago.

The deliberately low estimates became catnip for bidders. Or so it seemed when Warhol’s 1962 silkscreen painting “200 One Dollar Bills” incited a bidding war among five collectors and ultimately sold for a staggering $43.7 million (including Sotheby’s fees), more than three times its $12 million high estimate.

Would what proved to be the star of the last two weeks have made more at the peak of the market? No, said both Mr. Meyer and Mr. Porter. Mr. Meyer pointed out that during the boom, big money went for highly colorful images like a 1976 triptych by Francis Bacon ($86.3 million in May 2008) and a Rothko canvas, the 1950 “White Center (Yellow, Pink and Lavender on Rose),” from the collection of the retired banker David Rockefeller ($72.8 million in 2007).

“Because this Warhol is black and white, it could have very well been overlooked at the height of the market,” Mr. Meyer said. “Although it is art-historically important, it takes a little knowledge to appreciate.” [emphasis mine]

Taken together (i.e., the sense that collectors were well informed in 2003 and the sense that they were not so well informed a mere four years later), I think you can interpret Mr. Meyer's statement now one of two ways.

1. Either so many new people entered the art market between 2003 and 2007 that they watered down the overall intelligence of the collector base, or
2. Being "well-informed" in 2003 meant knowing what art was worth in terms of cash, but being "well-informed" in 2009 means knowing what art is worth in terms of its importance in art history.

Standing back and thinking about the 2003 and 2009 senses of worth, for just a little bit, one has to wonder when they'll merge and the conventional wisdom will become that being "well-informed" means both: knowing what art is worth in terms of cash AND what it is worth in terms of its importance in art history. That would, obviously, be ideal.

The problem, of course, is that to some degree both constantly shift, with or without a boom market.

The other problem too is the calculus for sorting out a combined sense of worth. If a work is kind of art historically important and the artist has a waiting list, is it worth more than a work that is very art historically imporant but the artist (or his or her estate) has plenty of inventory?

I know. Maybe we need a computer program, like the ones that helped Wall Street come up with all those credit derivatives and credit default swaps, to tell collectors what a work of art is worth. That should boost confidence in the market again, no?

Consider this an open thread on how all the information so readily available either helps or hinders confidence in buying art.