Comments on: Artnet’s silly indices

By: aAnalytics

aAnalytics — Tue, 29 May 2012 15:20:35 +0000

Over the past twenty years, the group of top performing artists in the Contemporary art Market has changed and any index that aims to accurately track a market must adapt to reflect the shifting composition of that market. This is common practice, and evidenced by the S&P index delisting hundreds of stocks over the same time period covered by our Contemporary Index. Market indicating indices are macro level views, and we urge our customers to consider the more nuanced artist level indices. Indeed, should a collector or investor wish to view only a group of artist that were present at a particular point in time (for example, Felix’s consideration of how the 1988 C50 artists performed), artnet allows for the creation of unique custom indices. artnet’s new product allows users to create reports for a single artist or a group of artists, an extremely useful tool for collectors who want to monitor the performance of their art assets. Ultimately, the reports are very much in line with artnet’s core business philosophy of bringing much needed transparency to the art market. Something we don’t find silly at all.

By: Anonymous

Anonymous — Sun, 27 May 2012 16:02:23 +0000

I gotta say, Felix, I don’t really see what your problem is. I mean, you make several cranky comments about how the Artnet indices are figured, and then what? You got nothing, really. The fact is that lots of people buy art, lots of people think of art as a kind of asset, and lots of art has been steadily increasing in price. Is it so nutty to try to quantify this kind of thing? Not only is it not “silly,” it’s human nature.

By: JKLFA

JKLFA — Sun, 27 May 2012 05:04:55 +0000

Felix Solomon has detailed several key flaws with Artnet’s Indices, including the lack of comparables since S&P dividend reinvestment not factored.

Another key issue is that when it comes to buying art, averages are irrelevant. You need to see Art to buy Art, and buying average Art is never a wise idea. The new Artnet Indice appears to be an unnecessary bell & whistle.

By: Quasimodo3000

Quasimodo3000 — Sat, 26 May 2012 14:57:41 +0000

“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.”

You have index that’s different? That tells the future? Pls advise, woild like to become rich.

“Silly,” indeed.

By: DwDunphy

DwDunphy — Fri, 25 May 2012 16:24:35 +0000

When it comes to art, the best advice has always been buy what you love. If it becomes worthless, you can still love it. If it skyrockets, you might love it more.

But to take something that is so subjective and personal as tastes or preferences and sink into it like a commodity is just asking to be beaten. To be broad, it’s like having a child in hopes he or she will be a huge sports star and bring money back home to papa, and that’s the ONLY reason why you had the kid.

That’s the extreme example of course, but to commoditize a drawing or painting like this is to reduce it to the material sitting on top of the material, encapsulated in another material for presentation, and has no relationship to intent anymore.

By: FabianB

FabianB — Fri, 25 May 2012 16:07:01 +0000

It seems some key elements are missing. I definitely agree with the (obvious) point on survivorship bias, as we all know, it infects all equity indices as well, to different degrees. An important remark is that from what I understand, artnet produces the C50 from auction data, so that it is impossible that an artist not already traded publicly in 1988 could influence the index. This shrinks the survivorship bias relative to the primary market substantially. Second, I think, like for all indices, the survivorship bias is an issue depending on the use of the index. It sure is an issue for economists who want to compare things that people cannot really invest in, maybe less for art dealers and other professionals of the art market who roll their stock of artworks continuously and are permanently exposed to constituents of the C50. Isn’t it natural for dealers to check past market behavior of what they currently own? Finally, thanks to the survivorship bias, the C50 can be considered a best case scenario for contemporary art, and just that information is already very precious for people daring to invest in contemporary art.