Mei Moses in the Financial Times

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I have long been a proponent of quantative analysis of art market prices, art as an asset and an advocate for the Mei Moses arrt index.  I posted the positive year end results from several of the Mei Moses art indexes and noted how the average for all art was above 10% and outpaced the Standard and Poors 500 for 2011 (click HERE for that post).

The Financial Times has picked up on the results and carried them along with an interview with co-founder Mike Moses. The Financial Times, a leading international financial newspaper called the Mei Moses All Art index, the "leading barometer of art returns" which certainly adds to the reputation of the published returns of the index.  Although the 2011 results are very encouraging, the article does note the future of the art market and financial returns are still rather unpredictable based upon the potential of slowing global economic growth.

A very good article to have for an an appraiser.

The FT reports

The Mei Moses has beaten the S&P 500 in six of the last 10 years, with an average annual return of 7.8 per cent compared with 2.7 per cent for the benchmark US index. The Mei Moses tracks the prices at which individual works of art sell over time using repeat sales data, in a methodology similar to the S&P Case-Shiller property index.

“Art prices are not correlated to sudden swings in stock markets but their prices tend to match changes in wealth creation and destruction. I’m not surprised by this growth as we are not seeing the wealth damage of 2008-2009,” said Michael Moses, creator of the index.
The performance of the index was led by a strong contribution from traditional Chinese works, which rose 20.6 per cent during 2011, as Chinese investors sought to repatriate cultural assets that had been sold to western investors.

“With China there is massive wealth. And the new wealthy want to show off their prized works to friends. It doesn’t take many to cause a surge in prices,” said Philip Hoffman, chief executive of the Fine Art Fund Group, an investment manager specialising in art with about $100m under management.

Elsewhere, there were record auctions for paintings such Roy Lichtenstein’s I Can See the Whole Room . . . and There’s Nobody in It! which sold at Christie’s in November, making gains in excess of $40m for its seller, who bought it for $2m in 1988. Andy Warhol’s Dollar Sign also made big returns when it sold for twice its estimate at $698,500 in 2011, having been bought for $27,000 23 years earlier.

Source: The Financial Times, click HERE to read the complete article.

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