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I guess you had to be there to actually believe it. The recent series of contemporary auction sales in NYC were nothing short of astonishing. Over the past week I received a number of calls from clients asking: how could this be? How could all that ‘stuff’ bring those prices? As a dealer specializing in 19th century Academic works of art, many times it is hard for me to make sense of certain works … especially those made of ‘found objects’ which are transformed into art just because an ‘artist’ says so … but hey, that is the contemporary art world; or so they say.

I should add that I do have an art history degree from New York University and studied with some of the great historians of our time -- Janson, Rosenblum, Sullivan, Sandler, etc.; many of whom were big fans of the movers and shakers in the art world at that time (Johns, de Kooning, Stella, Bell, Estes, etc.). This left me with a deep understanding of their work, their place in art history and to top it off I like many aspects of Contemporary art.

Today, the contemporary art world, in my opinion, has gone to another level and prices have reached the stratosphere (but hey, there is still outer space). Works by important artists are regularly selling in the 6 figures (for minor pieces) and reach the 7, 8 or even 9 figures for major works. Just last week we saw a Jackson Pollock hit $58.4M (surpassing his previous auction record of $40.4M just last November – but both numbers are far short of a reported $140M paid for his No 5, 1948 in a private transaction back in 2006). A Basquiat hit $48.8M (est. $25-$35M), a Roy Lichtenstein reached $56.1M (purchased by the jeweler Laurence Graff) and a Barnett Newman hit $43.8M (previous auction record was $22.5M in 2012 and prior to that the record was $5.2M in 2008).

Between the two main salerooms, more than $1 Billion worth of art traded hands and auction records were reached for dozens of artists. Now I know it appears that all is hunky dory in the contemporary art world; but it is important to remember that what goes up, can come down … and here is a great example. Just a few short years ago Damien Hirst was all the rage and in September of 2008 Sotheby’s had a single sale devoted to the artist … and the prices made were staggering (as high as $18M for a single piece). Now fast forward to 2013 and we find that not one Hirst was included in the evening sales … hum. On top of that, there were just 4 pieces offered in the day sales and the most important of them did not even break the $1M mark … back in 2008 similar works were selling in the $1.5 - $2.5M range … double hum. Why? Who knows and in the end, who cares? Well, I guess those people who bought them for $2M care!

I truly wish that I could give an accurate answer to the question: why is the contemporary art market at the levels it is? The general answers we hear are: new money loves the new art! Art is a great investment and with so much money on the sidelines some of it is being ‘invested’ in the art market (this make a little sense). With so many wealthy people already ‘invested’ in the market, they will make sure that their investments are protected (this also makes sense … if you have millions and millions of dollars invested you do not want to see those investments go down in value); but then we have to think back to Damien Hirst … there is/was a lot of money invested in his works and prices certainly appear to have leveled to say the least.

In the end the most important thing to remember is that you should buy a work of art because you love it and want to own it since there are really no guarantees that you will Make Money!