Sunday, April 23, 2006

Business and Art ......

ISB has a tradition of inviting eminent speakers from a variety of areas to interact with the students. We hosted Girish Shahene on the campus yesterday. For the uninitiated like me Girish gave useful insights into the different forms of art. We also discussed at length about the huge upsurge in the market for art in India and the demand and valuation of works by Indian artists.

I had the opportunity of meeting with Girish over breakfast and being a CA I could not help but dwell over the commercial aspects and the thought of art as an investment medium. My key take aways :

1. Invest in art only after you begin to appreciate the beauty of the piece and the artists vision. Not all works ,even by the renowned artists, would fetch those astronomical valuations. Most of the people who benefited from investing into art didn’t really “Invest” at the first place. They acquired a piece for the sheer joy of seeing it every day . Another reason why art auctions sells expensive is that collectors are often quite reluctant to let go of their priced possessions. So the demand far outstrips the supply.

2. There is no ready market for art (and there cannot be). Unlike stocks and shares art cannot be bought and sold anytime in the market. So you could be stuck with a piece of canvas for years without finding a buyer.

3. Art Funds : An art fund doesn’t really sound that exciting a concept. Since unlike stocks the value of stock doesn’t correspond to an underlying like profits, EPS etc.. An art fund would be under compulsion to buy and sell regularly to show consistent performance and ROI for the investors, and this might not actually be a good idea.

So the bottomline is enjoy art…. Appreciate it …. A demeterialised form of art doesn’t seem such a great thought.


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