If paintings were stocks

Friday’s Wall Street Journal offers an update on who is hot in the art market, classifying artists into buy, hold, and sell categories. The big winner? Cindy Sherman, art photographer. Why have her prices skyrocketed so much? First, the quality of the work is high. Second, she is a woman and museums feel the need to address the gender gap on their walls. Third, Sotheby’s and Christie’s now sell her under the “Contemporary Art” category, rather than “Photography.” This reclassification automatically boosts her prices.

Here is one of the classic Cindy Sherman images, but not all of them involve beautiful women.

Another big winner was Jeff Koons, former Wall Street commodities broker. Here are some typical Koons pieces, although his style is highly diverse, as NBA fans will attest. His prices have doubled in each of several recent years. Damien Hirst is on the upswing as well, so are some of the late Picassos. Among the classics there is also price strength with Cezanne, Gauguin, and Caillebotte.

Who is falling in price and due to fall more? Julian Schnabel. Some of the works are falling apart, and others are too big for collectors’ walls. Could you hang and maintain this one? Warhol has cooled off after a big run-up and it is opined that Basquiat (scroll down to the images) is due for a fall. Chagall painted too many mediocre pictures. Collectors are bored with Sisley and the sometimes fruity style of Renoir has fallen out of favor, despite its painterly virtues. This one will likely push you off the edge.

My take: The current generation of earners doesn’t care much about uniqueness or the original image. Younger collectors love to buy photographs, and don’t care if they don’t “own the original” or if that phrase has meaning at all. Many prefer that an exact copy of what is on their wall also hangs in the Museum of Modern Art. So look for photography, and painting/photography hybrids to continue their run-up.

I like to tease Robin Hanson that the painting market is a bit like terrorism futures. If you believe in a particular painter or style, you can put your money where your mouth is. The paintings market therefore might reflect new information might efficiently than does, say, the music market, where marketable investment assets are harder to come by. Of course that does not rule out the art market as a classic Keynesian “beauty contest,” in which everyone is guessing at the future opinions of everyone else, rather than at some objective facts.