Friday, March 20, 2009
Markets collapsed around the world and many billionaires have lost most of their fortune virtually overnight and they are billionaires no more. The remarkable thing is that even with the decline in the art prices some managed to keep their billionaire status thanks to their valuable original art collections.
So is art really a commodity?
There are many definitions of commodity, but one fits art particularly well - "something useful or valued". Well all art, or at least most of it, is useful for home décor, and all art, or at least most of it, is valued. It doesn’t matter if art is created by armature or well known artist, original paintings are never cheap. The value varies from hundreds of dollars to many million dollars, but none can be obtained for a few bucks unless it is a cheap reproduction.
So is art really a luxury item?
Yes and no. Many original artworks are affordable and simply a good investment, some are excessively expensive and they are luxury items. However, a definition of a luxury item is - something that not many people can afford, but those who can afford it have to actually use it. Unfortunately many famous artworks in private collections are just simply sitting in the volts. They are put away next to cash, gold and other valuables, so at that point art is simply an investment vehicle and not luxury item anymore.
So is art a wall décor?
For the most part it is, but it is kind of difficult to accept the idea that a million dollar painting is on the wall simply for decoration purposes.
It is interesting how the commodity definition fits art best out of the three. In most cases they are always exceptions, and there is no such thing as a definition of art, since everyone seems to have their own way of defining and describing art. Most likely art is little bit of all of those things and more, so that is why it is so hard to define.
Billionaires are probably some of the smartest people in the world, or some of the luckiest ones, and many chose to have large portion of their fortune kept in original art. When economy collapsed and many stocks are now worth less than the paper they are printed on, or less than the fee brokers charge to sell them, art is still standing strong.
This is truly remarkable - original art that used to worth thousands of dollars yesterday still worth thousands of dollars today when everything else that was considered valuable took a big dive.