Speculation As A Fine Art: An Early Trend Follower

Do we appreciate and acquire art because of our aesthetic agreements with a particular artist or because we wish to take part in an aristocracy? Are we able to distinguish when the media has tainted our judgements? Anybody who takes part in any civilization or consumes any form of media cannot avoid the power of mass culture. The impact it has on our daily activities is unavoidable.
The hierarchy of fine art appreciation is based on the idea that the elite are introspective and make selections based upon the knowledge of the past and the progression of the future. Current fine art should reveal a cultural advancement. This principle forces us to quarantine other groups of society from placing value on contemporary art. As a result, fine art is dedicated to the elitists who bolster their snobbery by attending exhibitions and acquiring art. Similar to the elitist art aficionados, artists with dreams of financial success, depend on tactics to create value. Artist's battle for grants, awards, famous collectors, positive reviews, scholarships, and publications all for the sake of building artwork value. Artists with a history of awards, high education, and famous collectors tend to be in higher demand than a self-taught artist absent of the basics of art history. The formulaic entourage of the fine art industry machine continues as the idea of a linear art history reaches its end. Less and less people are able to separate with mass culture and find comfort in challenging the elitists. As a result, the dichotomy between the elite and the masses becomes even more apparent.
Speculation As A Fine Art: An Early Trend Follower
Source: Speculation as A Fine Art by Dickson G. Watts.
Mr. Watts was President of the New York Cotton Exchange between 1878 and 1880.
What is Speculation?
Before entering on our inquiry, before considering the rules of our art, we will examine the subject in the abstract. Is speculation right? It may be questioned, tried by the highest standards, whether any trade where an exact equivalent is not given can be right. But as society is now organized speculation seems a necessity.
Is there any difference between speculation and gambling? The terms are often used interchangeably, but speculation presupposes intellectual effort; gambling, blind chance. Accurately to define the two is difficult; all definitions are difficult. Wit and humor, for instance, can be defined; but notwithstanding the most subtle distinction, wit and humor blend, run into each other. This is true of speculation and gambling. The former has some of the elements of chance; the latter some of the elements of reason. We define as best we can. Speculation is a venture based upon calculation. Gambling is a venture without calculation. The law makes this distinction; it sustains speculation and condemns gambling.
All business is more or less speculation. The term speculation, however, is commonly restricted to business of exceptional uncertainty. The uninitiated believe that chance is so large a part of speculation that it is subject to no rules, is governed by no laws. This is a serious error. We propose in this article to point out some of the laws in this realm.
There is no royal road to success in speculation. We do not undertake, and it would be worse than folly to undertake, to show how money can be made. Those who make for themselves or others an infallible plan delude themselves and others. Our effort will be to set for the great underlying principles of the "art" the application of which must depend on circumstances, the time and the man.
Let us first consider the qualities essential to the equipment of a speculator. We name them: Self-reliance, judgment, courage, prudence, and pliability.
1. Self-reliance. A man must think for himself, must follow his own convictions. George MacDonald says: "A man cannot have another man's ideas any more than he can have another man's soul or another man's body." Self-trust is the foundation of successful effort.
2. Judgment. That equipoise, that nice adjustment of the facilities one to the other, which is called good judgment, is an essential to the speculator.
3. Courage. That is, confidence to act on the decisions of the mind. In speculation there is value in Mirabeau's dictum: Be bold, still be bold; always be bold."
4. Prudence. The power of measuring the danger, together with a certain alertness and watchfulness, is very important. There should be a balance of these two, Prudence and Courage; Prudence in contemplation, Courage in execution. Lord Bacon says: "In meditation all dangers should be seen; in execution one, unless very formidable." Connected with these qualities, properly an outgrowth of them is a third, viz: promptness. The mind convinced, the act should follow. In the words of Macbeth: "Henceforth the very firstlings of my heart shall be the firstlings of my hand." Think, act, promptly.
5. Pliability. The ability to change an opinion, the power of revision. "He who observes," says Emerson, "and observes again, is always formidable."
The qualifications named are necessary to the makeup of a speculator, but they must be in well-balanced combination. A deficiency or an overplus of one quality will destroy the effectiveness of all. The possession of such faculties, in a proper adjustment is, of course, uncommon. In speculation, as in life, few succeed, many fail.
Source: Speculation as A Fine Art by Dickson G. Watts.
Immediate Desires Ruin Success
It is not truly realistic or scientific to take short views, to sacrifice the future to immediate pressure, to ignore facts and forces that are disagreeable and to magnify the enduring quality of whatever falls in with immediate desire. It is false that the evils of the situation arise from absence of ideals; they spring from wrong ideals.
John Dewey

Art and Antiques as Investments
by C. Birdsong and N.H. Drennen1

Quick Facts...
 Art and antiques are extremely vulnerable to fluctuations in public tastes and other factors, so they are considered high-risk, speculative investments.
 Most authorities agree that you should buy art and antiques primarily because you like them, and only secondarily because they may return a profit.
 Avoid putting more than 10 to 15 percent of the value of your investment portfolio into art and antiques.
You've seen newspaper headlines about someone who bought a painting or piece of furniture for $100, only to discover they've actually purchased a masterpiece or rare antique. Examples abound. Sir Kenneth Clark, the noted art critic and TV personality, made a fortune in the art market, turning an investment of a few thousand dollars into millions of dollars in less than 50 years. Collectors conduct tours of their homes, pointing out paintings, sculptures, antiques and even duck decoys that are now worth two, four or 20 times their purchase price.
Such tales of success often encourage emulation. Realistically, for most of us, how promising is investing in art and antiques?
Investment vs. Speculation
To answer that question, consider the terms "investing" and "speculating." The difference in the two activities involves time and degree of risk.
In speculating, potential risks and rewards are high and the time span is short. The prerequisites are in-depth knowledge of the investment, quick mental reflexes, considerable cash on hand, nerves of steel, and the ability to sleep at night when everything could collapse in the morning.
In contrast, investing takes place over a longer time span at a more moderate level of risk. Because art and antique prices are extremely vulnerable to fluctuations in public tastes (in addition to other factors associated with most investments), they are considered high-risk, speculative investments.
Most authorities agree that you should buy art and antiques primarily because you like them, you feel comfortable living with them, and because they are a statement of your tastes. Their profit potential should be a secondary consideration.
Investment-quality art and antiques are expensive and usually not an option for the small investor. Art and antiques are not a "liquid" investment. This means that they generally cannot be resold quickly for a profit. One reason is that the market for these items fluctuates. If you need to sell your items quickly and the market is down, you could lose money. Also, while you will pay retail price when you buy, you probably will sell at a wholesale price or lower. To make a profit, you need to keep your items until their value increases enough to make up the difference. In the art and antiques markets, this usually is a very long time.
On a positive note, art and antiques have an immediate and practical advantage over other types of investments. They can be used to furnish a home or office. To some, art and antiques provide an aesthetic element or simple comfort to an interior. For others, art and antiques offer an instant pedigree (in the home) or instant credibility (in the office).
While art and antiques can be utilitarian, they also can be cumbersome and costly. Often they are fragile, requiring proper environmental conditions, regular maintenance, adequate insurance and security, and frequent appraisals. Transportation, marketing and selling also may be costly and time consuming.
Basic Rules for Investing
Before buying art and antiques for investment purposes, keep the following basic rules in mind:
 Limit the field of your investment collection. Risk is reduced by information. It's not so important what you collect but that you like it and want to learn about it. Read everything you can about your specific area of interest. Consult museums, design centres, universities, other collectors or dealers in your specialty, trade journals, magazines, books and related associations.
 Find a reputable dealer who has been in the business for many years -- long enough to know about quality, market trends and pricing practices in the field in which you want to collect/invest.
 Buy top quality. Top-quality items are expensive; however, they tend to appreciate even in poorer market times. Medium-quality items often do little more than keep pace with inflation. Limit yourself to a field in which top quality is within your budget.
 Obtain a written appraisal or certificate from a leading appraiser or certifier in your field attesting to the quality and authenticity of the item.
 Maintain the item properly with appropriate environmental conditions and regular maintenance. If repairs are required, only well-trained experts should make them.
 Insure the item adequately. Most homeowner policies allow for fire and theft but not natural disasters, such as floods, or accidents. Have your works included on a scheduled form of all risks for coverage in the event of theft, fire or breakage.
 Make a detailed plan for disposal. Your attorney or estate manager may not be sensitive to the value or importance of your investment collection.
 Avoid putting more than 10 to 15 percent of the value of your investment portfolio into art and antiques. Most authorities agree that exceeding this limit may subject your entire investment program to a high level of risk.
Quality
Top quality is the best investment. The following generalized guidelines should be helpful in identifying quality. Reputable dealers will have years of experience to offer, and most are willing educators. However, dealers and galleries generally operate at retail, often resulting in a 50 to 100 percent markup to the buyer.
Major auction houses may not offer educational resources for a special field and generally are not places for a beginning investor to buy. However, once you have developed a level of expertise, auction houses can be excellent sources of art and antiques. Two major advantages are the sheer volume and variety of items offered, and the lack of retail markups, resulting in lower prices.
To locate dealers, ask other collectors or officials of your local or regional art museum for names and addresses of those specializing in your area of interest. Some of the leading auction houses are listed below. Find out which ones hold special sales for your area of interest and get on their mailing lists for future sales. Most publish pre-sale exhibition catalogs describing the items to be sold.
Antiques
 The particular school of the artist or craftsman and that person's degree of skill.
 A traditional, classical form produced in limited number.
 Good proportion and choice selection of materials.
 State of preservation -- excellent condition and original finish.
Fine Art
 The artist's technical skill in handling the chosen medium.
 The strength of the message conveyed by the artist.
 The condition and degree of restoration.
Sources of Information
In addition to other collectors, dealers, museums, universities, art centers and specific associations, many books and periodicals are helpful to the art and antiques investor. Check with your local public or university library to see if they subscribe to any of the following publications:
Antiques
 Antiques Magazine
 Antiques Quarterly
 Antiques World
 Art and Antiques
 Art and Auction
 Auction catalogues from various auction houses
Art
 Art in America
 ARTnews
 The Complete Guide to Collecting Art, by Lee Rosenbaum (Knopf)
 Auction catalogues from various auction houses
Summary
Art and antiques can be useful and beautiful investments. If you decide they should be part of your investment plan, narrow and know your field. Know the market for the field you've chosen. Decide how much speculation your total investment program can withstand. Recognize the long-term nature of the art or antique investment. Estimate the costs associated with ownership. Provide for your general liquidity needs as a prerequisite to deciding what funds are available for investment.