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The Future Is Handmade

The Future Is Handmade

As we boldly move into the 21st century, it is becoming apparent that mass manufactured goods will continue to become cheaper and more plentiful.  The rise of computer AI, robotics and globalization is all converging to create an environment where most items can be produced quickly and in large volume.  The future will feature ever less expensive consumer electronics, appliances and clothing.  It will also feature many fewer human workers.  So how will people make money and what will they do for work?

Since the beginning of the 19th century people have been trained for the industrial economy, a dystopia of gigantic factories and high speed machinery.  Workers stood on long assembly lines dutifully cramming the same widget into the same appliance again and again.  Then, in the mid 20th century, came the rise of the office economy.  This system relied on vast cube farms populated by armies of college-educated workers mindlessly entering data into spreadsheets.  Now we are rapidly transitioning into the information age, where individuals are often self-employed or contract workers.  A typical workspace for these intrepid pioneers may consist of sitting in a Starbucks with a MacBook Pro and an espresso.

But many of us will still long to use our hands just as much as our minds in the information age.  For those people, the obvious solution is handcrafting one-of-a-kind goods for direct sale to the public.  We can already see how this new style of production is spreading quickly.  Online distribution platforms like Etsy, eBay and even Amazon are providing today’s entrepreneurial craftsmen with powerful retail outlets that have a truly global reach.  It is now possible to sell your unique creations almost anywhere, to almost anyone.

And as the global marketplace inevitably becomes flooded with commoditized manufactured goods, handmade alternatives will become increasingly desirable.  No mass-produced cell phone or coffee mug can possibly compare to the warm, personalized touch of a handcrafted sterling silver keychain or a handmade monogrammed leather wallet.  The care, expertise and skill that goes into the creation of handcrafted goods is immediately and viscerally apparent to even the casual observer.  Handmade will eventually become a byword for luxury and refinement in a world awash in mass produced clutter.

In the end, the profound changes the world is currently experiencing will resolve positively.  People cannot be truly happy in life unless they feel they are doing something meaningful.  Working on an assembly line or in an office cubical might have put food on the table in decades past, but I think few people found it fulfilling.  Today we stand on the precipice of perhaps the most radical change since the industrial revolution – a world where many traditional white collar and blue collar workers retool to produce handcrafted luxury goods.

Investing in Contemporary Art Direct from the Artist

Investing in Contemporary Art Direct from the Artist

If you’ve spent any time reading AntiqueSage.com, you know that I have a strong preference towards antiques as investments.  Antiques are works of art that have stood the test of time, having been seasoned over decades, if not centuries.

This process tends to weed out specimens constructed of inferior materials as well as fad-based items, leaving a higher percentage of investment-grade examples.  So when I’ve occasionally wondered to myself if successfully investing in contemporary art or new luxury goods by buying them directly from the artist or craftsman is possible, the answer has always been “No”.

But then I had an experience on Etsy that changed my mind. I was perusing the online, peer-to-peer, handmade/vintage centric website for antique jewelry when I stumbled across something rather astonishing: a new piece of jewelry that was investment grade and sensibly priced!

This was something I didn’t expect.  Normally, luxury goods are far too expensive when new to make reasonable, much less good, investments.  The average markup over cost normally runs 100% or even higher.  It is easy to see under these circumstances why buying new luxury goods for investment purposes is a fool’s errand.  It is far better to buy them in the secondary market for discounts of 50% or greater.

And yet here I was, staring at a beautiful investment grade, abstract modernist pendant that was selling for only $365.  In cases like this, calculating an estimate of the item’s intrinsic value can be a useful starting point.  I immediately began to crunch the numbers.

The jewelry had modest intrinsic value from its precious metal content – about $30 or so.  It was also set with two natural sapphires: a small, round-cut, beryllium-diffused orange sapphire and another, much larger natural, purple-pink, marquise-cut sapphire.  The beryllium diffused stone was only worth $8 or $10.

The 1.27 carat purple-pink sapphire was the real treasure here.  Even at a lowball price of $200 a carat, the stone was still worth over $250 by itself.  Altogether, the intrinsic value of the piece was around $300 using fairly conservative assumptions.  As an added bonus, the jewelry had been cast in a cuttlebone mold, an ancient technique that destroys the mold in the casting process.  As a consequence, this pendant was one-of-a-kind, a factor that significantly enhanced its desirability.

The aggregate material value of $300 meant that the piece was only selling for about $65 in excess of its intrinsic value.  This modest $65 premium reflected both the item’s considerable artistic merit as well as its undeniable usefulness as a piece of jewelry.  I was very interested.

But another question quickly popped into my head.  How could the selling artist afford to let the piece go for so little money, especially after Etsy takes its cut?  He must have spent a minimum of several hours designing and crafting this pendant, and a wage of no more than $15 or $20 an hour at best for his considerable skills seemed unrealistically low.

So I read up on his background, discovering that he was more or less an old hippy from Southern California.  He had started out in the mid 1970s cutting gemstones, eventually stumbling into gold working and then full-fledged jewelry making.  I surmised that he probably had low expenses – no million dollar mortgage or $1,000 a month student loan payments here.  It is also possible that he scored a deal on the sapphires used in the pendant, given his extensive background with gemstones.

In any case, I was satisfied that the jewelry was as represented and a bargain at $365.  I wasn’t disappointed either.  After purchasing it, the pendant I received was a wonder of modernist design – at once sleek, organic and, above all, stunningly beautiful.  It was a remarkable find.

This pendant changed my thinking about the viability of investing in contemporary art direct from the artist.  I now think it is possible, although still very difficult.

New art is disadvantaged versus antiques in several ways.  First, it lacks seasoning, which helps reduce undesirable specimens.  Second, it is often overpriced, rendering future investment returns poor, or even negative.  Finally, when scrutinizing contemporary art I believe it is imperative to de-emphasize the artist and focus very intently on the quality and materials of the work itself.

Ultimately artists – especially new, unproven artists – don’t sell art.  Beauty and fine workmanship do.  In spite of these drawbacks, buying contemporary works direct from the artist may be one of the most overlooked ways to invest in art today.

Japan – Land of the Rising Investment Grade Art

Japan - Land of the Rising Investment Grade Art

I’m constantly challenging myself to discover new types of investment grade art and antiques.  But this search isn’t an easy one.  The ideal investable antique should possess five different attributes: durability, portability, scarcity, and quality of materials and construction.  In addition, an item should reflect the era or culture in which it was created – an attribute I term zeitgeist.  These five elements together form the delightfully zany acronym DPSQZ.  They are also the basis of universal desirability which is ultimately the foundation of investability.

However, following these five principles naturally tends to lead in certain directions.  For example, high quality materials and durability are joined at the hip.  Precious metals and precious gemstones are some of the most lasting, stable materials known to man.  Therefore it is only natural that antiques that incorporate them frequently appear on the list of investment grade art and antiques.  And yet I strongly believe that art does not have to possess significant intrinsic value in order to be desirable and investable.

This has prompted me to exhaustively search at the periphery of the art world for possible investment grade art.  Why the periphery?  Well, the major arts – painting and sculpture – are well trodden asset classes by this time.  The luminaries and great artists of these fields are well known.  Even an expert in the field is rather unlikely to suddenly “discover” a previously unrecognized or unappreciated artist.  There is a great deal of reference material about paintings and sculpture in existence, and, as a corollary, decidedly few bargains available to the collector.  This doesn’t necessarily make them bad investments, but it does make them less interesting from an investment standpoint.

What I have noticed time and time again in my endless search for unconventional, investment-worthy art is the amazing artistic talents of the Japanese people.  Historically eschewing personal adornment and conspicuous displays of wealth, the Japanese instead turned everyday functional objects into glorious works of art.  The list of their artistic accomplishments is truly impressive.  Expertly crafted samurai swords, delicately carved netsuke, intricately decorated tsuba, beautifully embellished lacquerware and alluringly modern shin-hanga woodblock prints are all examples of conventional antiques elevated into art forms by the Japanese.  These traditional Japanese crafts may have little to no intrinsic value, but are all solidly investment worthy.

Perhaps it isn’t surprising, but the Japanese still produce luxury goods of unparalleled beauty today.  Obsessive attention to detail and dedication to their chosen craft are truly admirable traits that shine through in many Japanese luxury products.  And while I don’t normally advocate buying new luxury goods for investment purposes, some Japanese items are so superlative in terms of quality that I may be willing to bend my own rules.

I don’t intentionally target Japanese art when looking for unrecognized, investment grade art.  In fact, I go out of my way to try to find unknown art and antiques from a variety of regions and cultures.  And yet I continually find myself drawn toward Japanese works again and again.  The Japanese people’s artistic skill – particularly with highly-detailed, miniature work – is the stuff of legends.  Their aesthetic reputation for both graceful simplicity and delicate naturalism is unrivaled.  When searching for aesthetically pleasing work that is universally desirable, I believe you must go where the fundamentals lead.  All too often, the final destination is Japan – the land of the rising investment grade art.  And that isn’t necessarily a bad thing.

How Much Money Do You Need to Start Investing in Art?

How Much Money Do You Need to Start Investing in Art

When most of us imagine investing in art we normally think of multi-million dollar paintings by Picasso, Van Gogh or Gauguin hanging in the secluded, highly secure mansion of some eccentric billionaire who may or may not be plotting to take over the world.  The concept of the fabulously wealthy art connoisseur has been reinforced for decades via movies, novels and countless other works of fiction.  An unfortunate side effect of this myth is for art – particularly art for investment purposes – to seem distant and inaccessible.  It gives the illusion of art investing as a hobby of the rich and powerful – the sort of hobby an average person could never hope to pursue.

This long-held idea of art belonging solely to the realm of the obscenely wealthy is a complete lie, though.  Yes, there are ultra rare and desirable artworks in the world that you and I will never be able to afford.  But the vast majority of art and antiques are surprisingly affordable.  In fact, one can start investing in art for only a few hundred dollars – and sometimes even less!  So how much money does a prudent investor really need to start a serious art or antique collection?

While art can be hideously expensive, this is not the norm.  In fact, I would argue that vanishingly few pieces exceed the $10,000 (USD) price point.  The bread and butter range, where many dealers and artists do the majority of their business, typically rests in the $250 to $2,500 area.  However, even these more modest values might appear intimidating to the aspiring novice collector.  Happily, there is fine art available at even lower prices, and I don’t mean junk collectibles either.  Very high quality antiques that are artistically interesting and sometimes centuries old can be purchased for remarkably little money.

For example, many series of beautiful medieval and ancient coins can be started for a shockingly small investment.  Indian Mughal silver rupees are impressively large and seductively exotic silver coins from the 16th and 17th centuries that are often available in excellent condition for less than $100 each.  Struck before the birth of Christ, good quality ancient silver denarii of the Roman Republic can be bought for $200 a piece – and occasionally even less!

Vintage fountain pens are another area where a decidedly modest investment can net choice specimens.  Many fine examples of World War II or Mid-Century era Parker, Sheaffer and Wahl-Eversharp fountain pens are commonly less than $100 each.  These stunning pens prominently display the characteristic zeitgeist and style of their age – a must for any desirable work of art.  Some of them even come with their original cases, a factor that greatly enhances desirability.

Silver liquor labels – indispensable for a well appointed liquor cabinet – are another great example of antiques that can be surprisingly inexpensive.  During the 18th, 19th and 20th centuries, wealthy British families hung these solid sterling silver objets d’art on wine, rum, sherry and whiskey bottles (among others) for identification purposes.  Prices are modest, given their tremendous beauty and history, with wonderful specimens readily available for just over $100 a piece.

While I’ve only touched on a few different examples, there are many more artworks available for only $100 or a bit more.  There is no need to be intimidated by the world of fine art and antiques.  There are styles, sizes and price ranges to fit every imaginable palate.  The only requirements before you start investing in art are to have a few hundred extra dollars and the desire to learn about the most gorgeous and overlooked parts of the art market.  There really is something for everyone in the world of art and antiques and the price of admission is oftentimes only a $100 bill.