Mei Moses, Beautiful Asset Advisors just posted their press release on the February London art sales for the general public and their full report for subscribers. In general the report shows mixed results for Post-War and Contemporary evening sales with prior auction sales showing a respectable return of 15.9% while Imp/Mod evening sales showed only a 5.3% return for sales with prior auction records. Both returns are noted to be below the historical returns of the categories.
Mei Moses reports
Source: Mei Moses/Beautiful Asset AdvisorsINSIGHTS ON ART MARKET TRUE RETURNS DURING MAJOR SALES IN LONDON DURING FEBRUARY 2015 BASED ON THE UPDATED MEI MOSES® REPEAT SALE DATABASE©
JIANPING MEI & MICHAEL MOSES
MIXED MESSAGE:RECORD SALES BUT SOME WEAK RETURNS
FROM A TRUE RETURNS PERSPECTIVE POST WAR AND CONTEMPORARY SLAES WERE ABOVE AND IMPRESSIONIST AND MODERN EVENING SALES RESULTS WHERE BELOW THEIR HISTORICAL AVERAGES. DAY SALES CONTINUED TO LANGUISH FOR BOTH COLLECTING CATEGORIES AT MAJOR FEBRUARY 2015 LONDON SALES
THE POST WAR AND CONTEMPORARY (PWC) EVENING SALES PRODUCED ABOVE AVERAGE RESULTS WITH AVERAGE COMPOUND ANNUAL RETURN (CAR) OF 15.9% FOR THE 35 LOTS WITH PRIOR AUCTION PURCHASE PRICE DATA. IN COMPARISON THE 46 IMPRESSIONIST AND MODERN (IMPMOD) EVENING LOTS WITH PURCHASE PRICE DATA PRODUCED A WELL BELOW AVERAGE CAR OF 5.3%. THE DAY SALES FOR BOTH CATEGORIES PRODUCED WELL BELOW AVERAGE RESULTS.
IN ADDITION EXCEPT FOR THE PWC EVENING SALES ALL OTHER PWC AND IMPMOD SALES WERE OUTPERFORMED BY EQUITIES. THIS ASSUMES THE EQUITY RETURNS WERE BASED ON INVESTING SIMILAR SUMS IN THE S&P 500 TOTAL RETURN INDEX FOR THE SAME HOLDING PERIOD AS EACH ART OBJECT. ©
SUMMARY
There were twelve day and evening post war and contemporary (PWC) and impressionist and modern (IMPMOD) sales held in London in February. This is the high point of the winter auction season in London and the sales generated almost $1 billion dollars in sales, a record for February, 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 fair. We found 260 lots that sold that had prior auction histories and purchase 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 were substantially below historical return results for these two collecting categories. The average of the compound annual returns (CAR) of all of the 260 lots that sold from their earlier auction sale any place in the world was 6.4% which is about 25% lower than our historical values for these combined collecting categories. In addition on a combined basis these returns were well below the returns that would have been achieved if the value of 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 10.3%.
Please note that prior performance of our repeat sale data and indexes does not guarantee future results. In addition, there is no guarantee that random collections of individual works of art or stocks will yield index returns. We are not financial advisors and we are not in the business of recommending art as an investment. Investment decisions should be based on the risk return tolerance and time horizon of the investor with, if desired the support of a licensed financial advisor. This information is provided "as is" and with no representations or warranties either express or implied of accuracy, merchantability, fitness for a particular purpose or of any other nature are made with respect to this information or to any expressed views presented in this information.
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