Mei Moses Winter Sales Report

Mei Moses/Beautiful Asset Advisors recently released their results for the Jan and Feb Old Master, Impressionist, Modern, Post War and Contemporary sales. They tracked a total of 19 day and evening sales in London and NY with nearly $2 billion in sales.  The general findings is that art is performing below historical levels.

Mei Moses reports

THE NEW YORK AUCTION MARKET OPENED WITH OLD MASTER (OLDM19C) WEEK IN JANUARY WITH WELL BELOW AVERAGE RESULTS. IN FEBRUARY THE MAJOR SALES MOVED TO LONDON WITH IMPRESSIONIST AND MODERN (IMPMOD) WEEK SHOWING SLIGHTLY BELOW AVERAGE RESULTS BUT ENDED WITH THE POST WAR AND CONTEMPORARY (PWC) WEEK WHICH SHOWED STRONG RESULTS ACROSS ALL PRICE POINTS.

ARTS’ PERFORMANCE RELATIVE TO EQUITIES WAS CONSISTENT WITH THESE RESULTS. THE AVERAGE COMPOUND ANNUAL RETURN (CAR) WAS 2.2% FOR THE OLD MASTER SALES. THE IMPMOD SALES PRODUCED AN AVERAGE CAR OF 6.6% AND THE PWC SALES PRODUCED AVERAGE CAR OF 9.8%. ALL BUT OLDM19C RETURNS BEAT THEIR EQUITY COUNTERPART. THE RETURNS ACHIEVED BY INVESTING SIMILAR SUMS IN THE S&P 500 TOTAL RETURN INDEX FOR THE SAME HOLDING PERIOD AS THE ART WORKS WAS 6.6% FOR OLDM19C; 5.6% FOR PWC SALES AND 5.9% FOR THE IMPMOD SALES.©

SUMMARY

There were 19 day and evening sales across these three collecting categories held in New York and London in the first two months of 2013. This is the high point of the winter auction season and the sales generated almost $2 billion dollars in sales at the two auction houses we cover in our analysis;  Sotheby’s and Christie’s.

The sales have been reported in the press as having results for total sales or percent sold that ranged from spectacular to poor. We found 506 lots that sold that had prior auction prices that we could find which allow us to compute a true return for each of these objects. From a financial returns perspective of the holders of the art that sold the results in total were below historical return results. The average of the compound annual returns (CAR) of all of the 506 lots that sold was a weak 5.6% which is about 25% lower than the average CAR for the over 20,000 repeat sale pairs that are in our historical database for these combined collecting categories. These returns were below the returns that would have been achieved if the art purchases had been invested instead in the S&P 500 Total Return index (where dividends are reinvested tax free) for the identical holding periods as the art. The average CAR for the S&P investments would have been 6.1%.

Source: Beautiful Asset Advisors/Mei Moses Art Index