For many months now, I’ve been seeing advertisements for a company called Masterworks. Here, for instance, is an ad from my Twitter feed:
The company describes themselves as follows: “Masterworks is the first company to allow investors to buy and trade shares in multi-million dollar masterpieces created by world-renowned artists. By strategically purchasing investment-grade works of art, Masterworks is democratizing the art world by making high-end art investment accessible to everyone.”
Now, considering the ungodly number of ads I’ve seen, I figured these guys must have cash up the wazoo. And, you betcha, they sure do. $110,000,000 of it, less whatever they’ve burned up so far on ads, office parties, and travel to various junkets.
My view is that this is example 3,859 of the Biggest Bubble in History. Because, listen, people, all they’ve done here is securitize one of the most obscure, illiquid, and subjective “markets’ on the place on the planet.
The idea that Joe and Jane Average can be profitable high-end art investors is an absolute joke. Yes, people WILL make money, but I seriously doubt it’s going to be the hapless rubes that “invest” in – – whatever this thing is.
Personally, I know a fellow – Halsey Minor – who was one of the richest high-tech entrepreneurs in the world. He discovered fine art over a decade ago, and it played a big part in BANKRUPTING him by 2013. And he is WAYYYYYYYYYY more sophisticated and intelligent than the target market of Masterworks, I daresay.
The bottom line for me is that I seriously doubt in five years people will be gathering at cocktail parties sharing stories about their sweet, sweet profits from their Masterworks investment. I think it’s far more likely people will mentioned the word Masterworks preceded by the question “Hey, whatever happened to……..?“
