Rich Dupre of the Motley Fool investment group predicts long term potential and future growth in Sotheby's stock. We at the AW Blog are not giving investment advice, but the Motley Fool considers Sotheby's one of 5 Stocks Worth Searching For.Dupre is right, the rich typically start to spend money when the economy starts looking better, and thus, his rationale for purchasing Sotheby's while the price and markets are low may in fact be sound advice. Many times in recessions there is pent up demand, and when the economic engine starts turning, the wealthy look for ways to spend money.
To read the Motley Fool article, click HERE.
The section on Sotheby's follows.
Even with auctions down 11% year over year for Sotheby's, it was still able to sell more than $4.8 billion worth of fine and decorative art, albeit most came in the first half of the year. Yet it also points out that perhaps the rich aren't all that different from us after all, whatever Gatsby said. It just takes a bit longer during a recession to hit their pocketbooks.
That's part of the reason CAPS member DFNmoney suggested back in October that the auction house would be a tough play in the current market, but that it was worthy of a bid if and when the economy turned again.
The wealthy will begin throwing money around again eventually. [Sotheby's] will suffer greatly throughout the recession-it's not a stock I'm buying that will be strong while times are bad. But I'm banking on the inevitable eventual rebound. $10 will be a steal in 3+ years.
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