Sotheby's Performace Reflects Market - Yazzy at www.williamverdult.com

According to Skates.com, investing in art assets can actually generate significant returns, but it requires a "private-equity" styled approach that includes hands-on involvement. Investments are needed after purchase of art assets, as well as considerable focus on research, public communication and other essential steps aimed at enhancing the value of portfolio artworks. Simply purchasing art and then sitting back and enjoying the acquisition will unlikely generate significant returns; in fact, ownership costs will make such investments look more expensive by the day. Furthermore, the art market’s poor liquidity and exorbitant transaction costs will most likely make passive art investments loss makers in the event that one is forced to sell quickly.

For rational investors seeking exposure to the art market without actually buying art assets, there are two investment strategies to consider. One strategy is investing in art stocks, which are covered below. Another involves a new generation of art funds that we believe will become available to art investors in the near future.

As of March 31, 2007, there were six companies that could be classified as having art stocks on the basis that most of their revenues and profits are generated from providing products and services related to the art market. The art stocks segment turns out to be tiny. With a combined market capitalization of only USD 3.06 billion (as of March 31, 2007) it is dominated by a single company – Sotheby’s. This company contributes to almost 89% of the segment’s total market capitalization and can accurately be considered a good proxy for the art stocks market. The fact that there are very few publicly-traded art businesses is a sure sign that art business skills are very much artisan in nature.

According to Skates Sotheby's Stock mirrows those of what are considered art stocks in general.