Category: media

Lies, damned lies, and investment indices

While researching a piece for the Currensee Blog about contemporary art as an alternative investment, I came upon an excellent piece on the Reuters blog from last year with the excellent title, Artnet’s silly indices.

In this post, Felix Salmon opines that Artnet’s desire to legitimize fine art as an investible asset class has gotten ahead of their ability to build a usable, meaningful index, which is unfortunately the showpiece of said legitimization strategy.  Artnet has released the C50 index of contemporary artists, which they say “combines performance data from 50 leading Contemporary artists, who best represent the Contemporary Art auction market.” They proudly display a chart of this index beating the snot out of the S&P 500 since 1988. Salmon cuts it down to size quickly:

The performance of the C50, then, is largely a function of the fact that hot artists keep on getting added — after they’ve become hot. It’s a classic case of investing with hindsight: if you only bought things which performed extremely well, then you would have made lots of money. Well, thanks for that.

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Finally, it’s no coincidence that Artnet’s first public index is its contemporary art index — the one part of the art world which has been on fire of late. It’s the third level of survivorship bias: if and when Artnet starts publishing its Old Masters index, say, you can be sure the numbers won’t look nearly as impressive.

The whole idea of an index is that it boils down a whole universe of stuff into a single figure that you can use, over time, to compare the performance of that universe to itself, and ideally, to other indices. We all know that the components of the S&P 500 change, but it’s still a petty good benchmark on big business in the USA. In fact, it’s pretty highly correlated with many stock indices around the world. Artnet chooses a new list of top 50 artists every year and adjusts the divisor much like the S&P does. To its credit, Artnet’s selection of artists for the C50 is purely rules-based, while the S&P 500 has some subjectivity that a committee works out.

So what’s the big deal? Salmon says it’s selection bias, and he shows a few layers of it, from the backward-looking selection of artists to the selection of contemporary artists as a period of focus to the weighting of each artist and each kind of work for each artist. For me, the big deal is that you can’t invest in art the way you can invest in markets, so the whole idea of comparing the C50 to the S&P is dangerous.

Artnet’s data come from auction sales (I wonder if the buyer’s premium is taken into account), and that’s not the only way to buy art, especially the art of living (contemporary) artists. Artnet is aggregating (and I’m not saying that their method is good or bad as method) the prices of many works of art by a given artist, each of which could be quite different. By contrast, a share of IBM is a share of IBM, so the market cap or share price of IBM is a figure equally meaningful to all investors. Shares of stock are fungible financial assets, works of art are frequently unique.

Sure, a record-setting auction sale of a piece by a given artist can boost the value of other works by that artist, but the only way you can expect to achieve the chart of the C50 is to buy – and sell – all the works by all the artists in the index at all the auctions.  Maybe the law of averages would be on your side if you could afford just one (properly-weighted) piece by each of the 50 artists, but the easiest way to achieve results very similar to those of the S&P is to buy a share of an index fund or ETF, and you can do that for $160 or so today, plus a modest commission. There is no C50 index security to buy, and while some stocks pay dividends and none have storage costs, buying actual art has substantial transaction, storage and preservation costs, and unless you charge admission to see the work, it will not bring any dividends.

I sure don’t mean to say that the stock market as embodied by the S&P 500 is the best of all possible investments, I just mean to say that somebody with a point to make and a thing to sell can probably craft an “index” that outperforms by using hindsight, selection bias, and an artful disregard for the different mechanics of the markets and assets.

So the next time somebody shows you a chart that shows that contemporary art – or Boston real estate, 2000 vintage Bordeaux, action figures from the 1970s, or any other not so liquid commodity – has outperformed the stock market, think hard about how they figured that out, and just as importantly, how you as an investor could reasonably hope to achieve those returns without either an infinite amount of money or a time machine.

Remaking the world

Because I’m me, people send me stuff like this. Artist Wendy Gold uses “vintage globes” to make works she calls ImagineNations™. Apparently they’re quite popular. She does a similar decoupage treatment on maps, too. I like her warning:

All ImagineNations™ are handmade to order on vintage globes. Remember, they’ve all had prior lives, so expect to see some “character”. Also, because of their age, many of the globes are no longer geographically accurate.

Spring Globes by Wendy Gold

I’m of two minds here. These are charming objects but it’s hard for me to see vintage maps and globes used as raw material – my deep-seated cultural veneration for books as objects seems to have extended to maps and globes. Don’t get me wrong, I do like map-based art, I’m just a little squeamish about destroying old maps - especially those that are “no longer geographically accurate” – even if they are being reborn as new art objects. Maybe I wish the new art had more to do with the “prior lives” of these globes, not just their formal properties.

Enough griping. As long as nobody’s destroying priceless antiques, more globes in more homes makes me more happy. If you feel guilty about using an old globe for art, maybe you could clear your conscience by donating new globes to classrooms that need them.

Glitch will be the next Instagram

I’m calling the peak of the Instagram reto “film” filters thing.  Soon enough that visual language will be dead as cupcakes. Recently I poked fun at Apartment Therapy for calling bathroom home offices a trend, and they had three data points to support that claim. I’ve got exactly none, but I’m going for it anyway.

What’s going to replace Instagram as the way to make a boring photo cool? I say what’s next is glitching. Glitch is a movement – or at least an aesthetic:

Glitch art [via Wikipedia] is the aestheticization of digital or analog errors, such as artifacts and other “bugs”, by either corrupting digital code/data or by physically manipulating electronic devices.

Ordinary digital photos, like the ones we take of our lunches every day, are pretty boring, and generally – at least technically – pretty good. Instagram and its ilk put some noise and quirk into regular shots, adding a tiny bit of what film used to deliver – randomness. Glitch can do that too, and it it’ll do it in a native digital language instead of a folksy but ultimately bogus analog one. It’s the imagery of the DIYer, the Maker and the hardware hacker. Glitch shows you how many things have to work just right to make a digital picture show up, by breaking them just a bit.

I think soon enough there will be glitch camera apps, maybe even glitch filters for Instagram. Somebody will make a digital camera that will be to digital cameras as Holgas and Dianas were to film cameras. As a way of easing the transition, here’s a cat photo that’s been glitched and also instagrammed. You saw it here first, trendspotters.

Lucy controls the horizontal

Three things you can count on in the South End

Great food, such as this plate of paper-thin finocchiona and chunks of pecorino tartufo with some pickled veggies at Cinqocento.

Finocchiona and Pecorino Tartufo at Cinqocento

Great art, such as Replicant Hybrid by Julia Csekö, on view at Laconia Gallery.

Replicant Hybrid by Julia Csekö, on view at Laconia Gallery

Great public trasnit amenities, such as this self-serve heated bus stop shelter on the Silver line.

Press for Heat

 

At Nave Gallery Annex, the door to summer is a jar

I am sitting in a room probably very different from the one you are in now. I am sitting on a metal glider swing in the front parlor of a Somerville home facing two intensely bright lamps and listening to recorded sounds of nature. It’s artist Lyn Nofziger‘s installation, Home, at the Nave Gallery‘s new Annex on Chester Street, part of the group show, Picnic.

I’m too stuffed up to know if there’s an olfactory component, but except for the temperature, Home does in fact deliver on the promise of Picnic, to glorify “the lush serenity, the ripe thriving growth, the vibrant color of what’s living in these sultry days of summer.” In January and February, of course.  It’s a bit like a sunset but maybe even brighter and yet it makes you want to linger.

There’s almost too much going on the four or so rooms of an otherwise typical apartment that the Nave Gallery has taken over. The card lists 16 artists and there are almost certainly more if you count the dozen or so conributors to the open call to “preserve summer” where local artists were asked to “capture the endless and invincible season of summer in a mason jar.” This is at least as cool as when you could seal anything you wanted into a can at the now-gone Museum of Useful Things.

In an awesome three-part sink next to the jars of summer you might notice Sophia Sobers’ installation Abandoned Nature, a series of organic forms whose shape recalls coral or some kind of fungus, but whose location and color also remind you of flora that flourish in the dark corners of some ill-attended kitchen or bathroom.

The lith prints of photographer Adam Gooder are sprinkled around the galleries (and some prints in a bin are for sale at criminally low prices, by the way) and depict flowers in closeup with a delicate sunshiney tonality and delicious grain.  I don’t know if Gooder has a stash of old Kodalith paper or has an alternate chemical or digital method, but it works for me.

There’s a tremendous amount more work in this show, it could take you till summer to digest it all, but since the show closes on February 8 with a reception and mason jar auction, I suggest you get over there soon and join me in welcoming this art space to Davis Square.