Sotheby’s relies on wealthy people to buy various forms of art in a hyper-competitive market. Fortunately there is more art than wealth and art has appreciated rather nicely. In many cases you can admire the object at home. Most wealthy people do not post their bank statements on the wall. Which is why they buy art, you see.
Humour aside the fundamental business model of auction has withstood the test of time and auctioneer’s have thrived. So if you can withstand some short-term fluctuations caused by weak players a good auctioneer is a sound investment. If you follow closely you may be able to pick up a few clues about the state of the economy.
Sotheby’s recently announced a hook up with eBay to stream live auctions. EBay needs something like a Sotheby’s to help solidify their status as an online auction house. Watch for eBay acquiring Sotheby’s and paying some nice premiums.
George Gutowski writes from a caveat emptor perspective.