The Economist bucks the trend toward viewing art collecting as an investment with a reasoned and well-reported article on what collectors actually say about their experience buying and selling art. The data was collected at ArtBasel, the Mecca of Collectors:
The sociability of the fair contributes to the aversion that collectors have to going home empty-handed. Jay Smith, an investment advisor at CIBC-Wood Gundy and an important donor of art to museums, admits, “When I don’t buy anything, the fair feels dull. Buying makes you feel connected to what is going on.”
Buying art doesn’t just offer a sense of community, it engenders feelings of victory, cultural superiority and social distinction. Some say that it even fills a spiritual void. The term most commonly used by collectors, however, is that buying art gives them a “high”. George Economou, a self-made shipping tycoon whose art collection in Athens is open to the public, bought several works at Basel this year, including a wooden sculpture from 1924 by Hermann Scherer for over €1m. He distinguishes between buying at auction, which he says feels “more exciting, more vibrant, more alive”, and buying at an art fair, which may have a longer-lasting thrill.
However sweet the chase of buying, the Economist points out that selling, even at a massive profit is a fleeting victory:
Joel Mallins, a New York collector,[...] sat at the back of a Sotheby’s auction in London five years ago, watching two telephone-bidders scrap over his Damien Hirst pill cabinet, “Lullaby Spring”. It fetched a record £9.6m ($19.2m) in June 2007. He had paid well less than $1m for the wall sculpture, which dates from 2002. Speaking at a seminar during Art Basel, Mr Mallins admitted that he doesn’t expect ever to repeat the jubilant experience.
Many sellers suffer a measure of remorse when they sell an artwork. They feel “conflicted” and even “guilty”.[...] Several factors fuel the sense of regret. First, selling art has a long association with debt, death and divorce. No one wants to look like they need the money. Second, collectors are exceedingly hesitant about selling works before they have realised their full value, so much so that they often don’t end up selling them at all.
Why Buy Art? (Economist)