“Art market bubbles occur ‘whenever income inequality rises quickly.’”
— Somebody who claims he knew Andy Warhol personally
Dear Rick,
“We don’t publicize any upcoming offerings,” says our contact at MasterWorks, frustrating my hopes to whet your appetite for Scott Lynn’s next offering.
I get it.
But let’s back up a moment…
This week we continued our series on alternative investments — things whose value can increase regardless of what’s happening in the stock market.
Over the past few days, Scott has been sharing his thoughts on artwork as an asset class… and how his company offers an easy and affordable way to diversify into fine art. Along the way, we discussed the life and work of Jean-Michel Basquiat, “one of the top-selling artists in the world right now.”
MasterWorks owns six of his paintings — and you can own a share of them through their platform. Imagine the chance to tell your friends that you co-own a multimillion-dollar piece of art.
To learn why it’s a good idea, don’t lollygag and take a look at how our conversation has unfolded…
NFTs? Nah… PSAs, Take a Look
Today you’ll occasionally hear about some non-fungible token (NFT) fetching a ridiculous price… like the $180,000 basketball superstar Steph Curry paid for a rendition of a snooty-looking blue ape. Companies are still getting in the game, too… with clothing designer DKNY offering its new logo for sale as an NFT. And according to The Block, a website dedicated to digital assets, spending on NFTs topped $300 million last month… and is currently topping $2.3 billion this month. That’s a lot of cash for what are effectively ones and zeroes that can be replicated with the press of a button. Sure, an NFT’s blockchain means someone can “claim” ownership over the image… but so what? If you own a beach that must allow the public free and unfettered access, what does your ownership mean?
The Deal of the Art
After working at home for a few weeks, I returned to our still-empty office to discover a priceless piece of artwork laying haphazardly on our conference table. Priceless to me, at least, because it was one of my mother’s paintings. Up until recently, it had been adorning the walls of an apartment we used for corporate guests. Thanks to the pandemic, we’ve decided it’s an unnecessary expense… I guess I’m lucky it wasn’t just tossed when the staff cleaned the place out. Don’t get the wrong idea, though…
The Difference Between Vandalism and Valuable Art
Our Baltimore headquarters backs into a small alleyway. A large brick wall runs alongside its far side. For the past few months, it has been emblazoned with a single name in large bubble letters: “Kobe.” Presumably it’s a tribute to Kobe Bryant, the basketball superstar who died in a helicopter crash in January 2020. We’re not sure why it hasn’t been scrubbed off yet. We’re even less sure why someone took the time to do this in the first place. Its out-of-the-way location means very few people will ever see it. And if anyone happens to walk by, what are they supposed to think? Can this be considered art?
Removing Mystery From Art
Edgar Allen Poe died in 1849, here on the charmed streets of Baltimore. Sometime in the 1930s, a man dressed in black broke into the cemetery, drank from a bottle of cognac, then left three roses on Poe’s gravestone. He repeated the tradition every year on Poe’s birthday, Jan. 19. Sometimes the “Toaster,” as he came to be known, would leave a note. In the 1990s, he left a card indicating that a new Toaster would be taking over. Whoever the replacement was kept up the annual visits to Poe’s grave until 2009, when they suddenly stopped. But despite appearing in the same place at the same date for over 80 years, there hasn’t been a credible claim to the Toaster’s identity.
Securitized Art
Our new acquaintance Scott Lynn’s MasterWorks has made investing in fine art as easy as buying a stock. “We securitize a painting by filing it as a public offering with the SEC,” Scott Lynn says, “and then we sell shares as individual artworks.” It’s an interesting idea. And a place to park some of your cash for a decade or so. I’ll let Scott explain how his platform works.
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You can catch our full interview with Scott Lynn, right here.
As you’ll see, Scott is a sharp guy… and the idea behind MasterWorks really fits well into what we’re trying to do — bringing you novel ways to preserve and grow your wealth.
Just click on the picture above to learn how artwork can play a role in achieving those goals.
Regards,
Addison Wiggin
Founder, The Financial Reserve
P.S. On Monday we’ll be taking a break for Labor Day. Heh. Labor day: The American edition of May 1st. Expect your next Forecast update on Tuesday.
We’ll also be taking a break from our look at alternative investments… because the U.S. withdrawal from Afghanistan is a much bigger deal than Wall Street is making it out to be.
We’ve seen this movie before, haven’t we? Mcnamara’s War was a bitch. The Fog of War, a documentary, covered it in a very eerie way. It was released in 2003, just a few years before IOUSA.
