OPEN STUDIOS POSTSCRIPT

THE ANNUAL 52 O STREET Open Studios event was a riveting success for the building. if not specifically in terms of sales for some of us. However, the electric energy and upbeat response both days from the visiting public of record turnout was shared by all.

Commented one artist in the building just this morning, "I am still so jazzed about the turnout and having so many new faces in my studio. I am grateful for the new interest in my work, compliments of your friends and collectors. There was a general feeling from the visitors that 'O' Street is a happening place. I couldn't agree more."

I was initially thrilled by the response to my own work, having sold a few smaller prints and tiny paintings, and was inspired by the idea that I had finally found comfort among the breeds and was no longer working against the winds that were always changing. One of my six large drawings on paper from 1984 elicited lots of positive attention. More smaller pieces from that same period were lauded far beyond any expectations of the day when they were created. Several larger canvases are still potential sales.

But it seems I have created somewhat of a scandal with a recently completed large piece. I now realize I must step back, and bring my theories of both art in general and those influencing my own work into clear focus. And I must also revisit an earlier idea of mine. Since we have inherited the observation that a picture is worth a thousand words, and the art consumer, dealer, and critic all seem to require in this DIY Age that the artist nee businessman must dance to a requisite tune, while weaving a charming story for their entertainment and edification, I feel the composition might as well be politely considered, committed to media and presented in a fine light persuasive to the work. So be it. By the will of the people, I will tighten up my affairs before I again open myself up to whatever the world seems fit to do with me.

My populist notions have seen better days. So now is not the time to return to half-measures. I have a few thoughts I'm just itching to implement.

INVESTING IN THE ART MARKET

Looking out from Bertha's in Fells Point, Baltimore

By Deborah Brewster of The Financial Times. The article was originally published on July 13, 2007.

ART HAS EMERGED as a serious alternative asset class in the past few years, in spite of the disdain of art lovers and the scepticism of many dealers and collectors.

Randall Willette, who advises collectors, says: "There are increasingly two types of buyer in the market. The idea that you should buy purely because of your passion is becoming less common. More buyers are coming from a financial background and people want to support their buying decisions with financial information. Increasingly, art is part of the balance sheet of private clients."

There are two questions for investors to consider before treating art as part of their financial portfolio. The broader one is whether the art world can be considered a true market in the same way as the stock market is. The second is whether the price boom is cyclical, or part of a longer-term trend that will see prices move higher permanently. The answers may not be conclusive, but it is important to bear them in mind before following the legions of new buyers with the idea of making a killing.

Artworks are bought and sold at prices reflecting perceptions of their value, and these can change sharply. In that sense, it is a market, but many are unconvinced that it can ever operate according to the rules that govern other asset classes.

"I love art, and I love a bargain, but the fact is you cannot apply any kind of valuation analysis to artworks," says one longstanding collector who is prominent in the financial world.

"When I analyse a stock, I look at future income stream, how it is priced in relation to its competitors and the quality of management, and other criteria that can be measured quantitatively. The sole measure of an artwork is the cultural perception of value attributed to it. That is not something you can make any reasonable prediction about in relation to its future value."

This has not stopped an avalanche of financial analysis on the art market. Much of it sheds light on which types of works command value and how that value has changed over time.

Some of it bears out what dealers might intuitively understand. Research has shown that figurative works are valued more highly than landscapes; that the larger any given painting is, the higher the price per square inch; and that middle-tier works are likely to rise in value further than top-priced masterpieces. However, most people who have built up collections that have risen in value did not pay a great deal of attention to price, but rather to a unifying aesthetic.

As records topple at each auction, the stories of profits are encouraging more buyers into the market.

Adam Sender, a New York hedge fund manager, has said he had made more money from his art collection than his hedge fund.

Art market cycles usually last six to seven years, and the present upswing has been going for six. By that measure, a correction can be expected soon. The most recent Impressionist and contemporary auctions surpassed the price and volumes of the peak of the last boom in 1990.

However, the market is not monolithic. It spans collectables such as stamps, fountain pens and teddy bears (which have rocketed in value), to contemporary sculpture and photography, to decorative arts, to paintings by Picasso.

Each cycle has its favourites. Last time round, in the late 1980s, the Impressionists had their day. Japanese property tycoons formed a passion for works by Van Gogh and Rembrandt. A few years later, the value of such works had plummeted. The latest cycle has seen a huge rise in the value of contemporary works. However, another new aspect to the present cycle is the global nature of demand. It is not just one group of people buying one type of painting.

Newly wealthy people in Russia, China and India are buying works by indigenous artists as well as by western artists. US and European hedge fund managers are buying Chinese contemporary art as well as Andy Warhol. Demand is lifting prices across a range of categories. Michael Moses, who, with Jianping Mei, devised an Impressionist and contemporary art market index, has launched a Latin American index. But even the most optimistic believe some sectors, such as contemporary art, are due for a drop in prices.