How to make money in the Art Market

NINE WAYS TO MAKE MONEY IN THE ART MARKET by
Richard Polsky

Source: Artnet

Last week, we looked at the many ways that careless collectors can lose
money when they buy and sell works of art [see "Nine Ways to Lose Money
in the Art Market," July 16, 2009]. Of course, money can also be made in
the art market. It goes without saying that a true passion for art is
the first requirement. That love of art helps you believe that you
possess the sound judgment to pick good artists, and gives you the
discipline to hang on to them -- 15 to 20 years being optimum. The
bottom line is not to be greedy when it’s time to sell. Remember the
sage advice supposedly given by Lord Rothschild when asked the secret of
his success: "I always sold too soon."

1. Buy the program. Imagine if you had bought one work from every show
at the Daniel Weinberg Gallery in Los Angeles during the late 1980s. You
would have ended up with a Robert Gober (and a sink, no less), a John
Chamberlain, an Eric Fischl, and a Robert Ryman. Ingratiate yourself
with a dealer who has picked winners in past eras, such as Paula Cooper,
or more recently David Zwirner, James Cohan, Adam Baumgold and Zach
Feuer, and watch your art portfolio soar.

2. Sacrifice your pawn (to get to the queen). Often, to make the above
strategy viable, a collector finds him- or herself having to buy a work
or two by a gallery’s less celebrated artists. Many years ago, some
believed that a good way to approach the Mary Boone Gallery to obtain a
work by Fischl or Schnabel was to offer to buy a Gary Stephen or a
Michael McClard. Even the great Leo Castelli smiled upon those seeking a
Lichtenstein, Johns or Stella if they asked to buy a Cletus Boyer, Mia
Westerlund Roosen or even a Keith Sonnier.

3. Buy from an artist’s estate. Be it Sam Francis or Andy Warhol, lucky
are the collectors and dealers who can get close to an artist’s estate,
and be able to cherry pick from the trove of paintings the artist has
left behind. Estates often sell work below market for several reasons,
including to avoid speculation. Their strategy is to place pictures with
bona fide collectors who will hold onto the work rather than ship it
off to auction. If you are lucky enough to be able to acquire pictures
from an estate, handle your opportunity responsibly -- there are no
second chances.

4. Buy new release prints. Even though prints are less likely to jump in
value than paintings, they do offer opportunities for appreciation. And
when it comes to prints it’s all about the publisher. Having a
subscription to ULAE, or to a lesser extent to Gemini and Crown Point
Press, insures you of the opportunity of buying prints at their IPO
(initial public offering) price. Once the edition sells out, the
publisher automatically raises the price.

5. Buy items that pass at auction. Risky business but highly lucrative
when it works. When an artwork fails to make its reserve, anyone can
approach the auction house with an offer to buy it after the sale. On
the negative side, the whole art world is aware the thing didn’t sell
and hangs the scarlet letter "B" (for Burned) on it, claiming it was
either inferior, grossly over-estimated, had dubious title or some other
defect. Think independently. If you decide that it’s a quality work, go
for it and make the auction house a lowball offer. If the firm accepts,
not only will you have gotten a bargain, but no one will know what you
paid for it. When you go to sell someday, that will prove extremely
beneficial.

6. Buy directly from an artist’s studio. Some artists are extremely
loyal to their dealers. Then there are those. . . . If you choose to
work with an artist who sells direct, be aware that most of them like to
be paid in cash. You’d be shocked at some of the big names who will
bend the rules to pick up spending money for vacations, greens fees and
fancy restaurants. Remember, I’m not advocating that you do anything
illegal. Just be cool about it so neither the artist or his dealer are
embarrassed. Under certain circumstances, some dealers are willing to
look the other way when an artist makes deals on the side, such as Andy
Warhol’s arrangement with Leo Castelli.

7. Buy pre-retrospective. If you discover that a major art world figure
is about to receive a full-dress retrospective, it’s time to spring into
action. There’s nothing like anticipation of a major show to put an
individual artist’s work in play -- the price of a work of art always
goes up on the come. If you already own a painting by the artist about
to be canonized, do everything in your power to lend your work to that
show -- all the better to have your painting documented, which increases
its value.

8. Buy an artist who is switching galleries. Artists are human. When an
opportunity to exhibit at a more important gallery comes their way,
chances are they’re going to take it. Try and buy a painting before the
changeover becomes official. In one recent example, Robert Bechtle
jettisoned a 30-year relationship with O.K. Harris for greener pastures
at Gladstone Gallery. By exhibiting at a gallery with a stronger
reputation, Bechtle’s work was seen in a fresh context, which helped his
prestige, to say nothing of his prices.

9. Piggyback a purchase on a museum trustee. If you want to make a sharp
investment, just find out which artist your local museum’s trustees are
currently acquiring for their personal collections. You will find that
even though it’s a conflict of interest, a "value-increasing" show of
that particular painter, at that particular museum, is rarely far
behind. Years ago, the San Francisco Museum of Modern Art held a large
survey of Sigmar Polke’s recent work. While reading the wall labels, I
noticed that a good proportion of the show was owned by members of the
board. What a surprise.

RICHARD POLSKY is the author of the forthcoming I Sold Andy Warhol (too
soon). Comments can be directed to Polskyart@msn.co