ALL EGGS IN ONE BASKET???

THE BEST ADVICE ANYONE IN INVESTMENT WILL GIVE YOU IS: DIVERSIFY. I WAS NOT DOING THAT AND THE DANGER WAS HUGE. I HAD MY REASONS BUT WAS I RIGHT OR WRONG?

 

Never put all your eggs in one basket! Too risky!

I was at that moment close to penniless because in addition to the Geralis investments I had also bought in Athens and Paris other Greek paintings by artists such as Xenos, Doukas, Kanas, Romanides, Sklavos and Prasinos totalling about £20,000. This did not include the additional payments I had to make to contemporary artists! I had gone mad!
Overnight and within 2003 the portfolio had become unbalanced and heavy on Greek art investments. That was a significant move and investment in one direction. I was at risk of ruining the work of the past twenty years by investing nearly 90% of my money on Greek art! Very dangerous! I could hear the bells of danger ringing in the distance, but I was also sure that Greek art was heading towards much higher and better pastures. The fine edge between success and failure needed a good pilot and I was under the microscope.

My addiction was close to sickness; to me however it was joy and happiness translated into love for art and love for my country’s art. But the flesh-biting question was always there. Was it love for art or was it love for money? I have always wondered and asked myself this one million-dollar question. Which came first? Nevertheless, whenever I invested in something it was because I liked it first, and that was the reason I stretched my finances to breaking point all the time.
I was rich in assets, but cash strapped! Isn’t that the case with all big business people, I kept wondering! Slow, dreamer! Slow!

The sale of all recent acquisitions had already been planned for Sotheby’s Greek sale in London in May 2004, just three months before the Athens Olympics. I felt it was the right time to sell, not only because I desperately needed the funds, but also because I believed the Greek art market would climb even higher that year because of the Olympics. That was the event I was banking on.
The May sale was to be my biggest auction sale in numbers ever. I had made the investments, and in doing so I had put nearly all of my eggs in one basket. If I read the market wrongly, I would have serious financial problems. I would be under a mountain of debt once again with a stock of several hundred paintings, mainly Greek, threatening everything I had built over the past twenty years.
I needed to sell, I had to cash in the investments in order to recover my money and hopefully make some profit. There was no Exter to fall back on any more. No other artist I owned could sell for sixty thousand pounds from the sale of just one painting, nobody, although I had collected hundreds of smaller value paintings, which I hoped would give me a breather whenever I needed a good sum of money.

Desperate to cash in some of my investments

The car was loaded with a dozen paintings plus the Sklavos sculpture. Even though there were no major pieces amongst them, quality art and artists were involved. I was not too concerned about estimates and the opinion of the experts. I was certain that my consignment was what they were looking for and that they would accept my property with open arms. All I needed were reasonable estimates and normal business terms.

The two experts of Sotheby’s were anxiously expecting my consignment. It was a significant part of their May sale. They arrived together as soon as I arrived at the reception on George Street. Happy faces, happy remarks and down to business. There was no hustle, no arguments and no aggravation – everything as smooth as silk. I was an important seller with the goods to attract both major and casual buyers. They had to take into serious consideration my needs, as Sotheby’s wanted a second Greek annual sale.

I consigned thirteen items for the sale, which I listed clearly together with all my requirements. By providing the experts with a list, I had made a statement of needs, forced the issue of reserves and gave them no chance to reject anything I planned for sale. Consigning such a large number of paintings enabled me to demand the best terms and also enabled the experts to afford me the best terms as a trader. In a sale of 172 lots, I owned thirteen lots, in other words, about 8% of the sale.

The experts were impressed by nearly all the consignment, but they particularly liked the Xenos painting of Vouliagmeni, the large Zenetzis canvas of Monastiraki with Acropolis Beyond and the Sklavos sculpture. Encouraging comments for most of the significant art, but how would my splash on Greek art fare in the test arena of auction on 10th May 2004? Would I recover the total investment cost of £19,000 and make a 50% profit too?

The Greek Sale, Sotheby’s London – 10th May 2004

The jitters and worries were aplenty. Hanging from one sale in order to recover invested money and finance the rest of my projects for the Olympics was dangerous. I desperately needed money to keep the operation going, the bankers happy and the artists working for me in Athens employed and content. Hope was my best companion in life and it nearly always supported my efforts and causes. It kept dreams alive!
Two o’clock! Sotheby’s room at Olympia was full. The Greek collectors gathered in their dozens ready to spend and invest in Greek art. Many familiar faces attended, close acquaintances sat nearby ready to bid. Pretending to be in a happy mood was part of the art of doing business, but I was worried, very worried. Thirteen investments for sale, thirteen worries to live through. No exaggeration!
The bidding was brisk from the start and spread well between telephones and audience. Soon enough, it became evident that the sale would be fine, if not very good. Less worried, cool and composed I waited for my turn to celebrate a little. Cool, but for how long?
The little Geralis from Montreal was lot seven and the first to be sold from my property. I sat motionless and waited with great expectation and apprehension. Bidding in the room, phone bidding and soon the beautiful painting had climbed to the reserve of £3000. No worries there! Slowly and gradually it climbed to £4800 and the Geralis from Canada became indeed a good present from IEGOR. That was a very good result that calmed me down a little and made me feel hopeful about the next twelve pieces. I could not be on edge throughout a sale of 172 lots, could I? Well yes, I could, and I was to the last minute, since the Doukas Still Life was lot 170.
I was particularly anxious about the four Zenetzis paintings and the small pair of Kalogeropoulos paintings. Would they sell? Would the price bracket of my contemporary artists improve? My fears were unfounded as all the Zenetzis paintings sold very well with the impressive, ‘View of Monastiraki with the Acropolis Beyond’ selling at £4400, a record for the artist and an impressive percentage profit for me. Kalogeropoulos’ pair of marine paintings, only 30×40 cm each, sold for £2200, which represented a great 500% profit.

                      Leon Kalogeropoulos

How could I worry about the Fassianos minute drawing of a woman in pink, which cost me just five hundred pounds in Paris two years earlier? Punchily estimated at £1000-1500, it sold very well at £2200.
Most paintings sold well and nearly everything sold to expectations. My only disappointment was with the major investments in Xenos and Kanas, purchased in Athens, which returned negligible profits. The sales total of £34,000 minus the commissions and expenses of Sotheby’s was very good. I was left with a net return of £30,000 plus two unsold paintings. I was absolutely thrilled with 100% profit. Years and months of work had paid me handsomely and boosted my confidence and finances. But how long would that situation last? I could not control spending the money on everything I saw and liked. Whether that was for better or worse, I still do not know.

Every sale and every purchase is a page turned and a new lesson in trading. The May sale at Sotheby’s was very didactic:
• The art of Zenetzis and Kalogeropoulos was a sound investment returning me more than 500% on the initial outlay. It justified my strong views on investment in contemporary art at studio prices. The future looked promising for both artists!
• The Internet had contributed significantly to the profits. The brothers Geralis, Apostolos and Lucas, returned 200% and 130% respectively.
• Private purchases in Athens left much to be desired. The disappointing sales of the Xenos, Kanas and Doukas showed that I had paid too much for them. Time to give up that way of investing, or rather be less open-handed.
Twenty years after I had ventured into art and after so many years of experience I was still learning. Life is a never-ending learning experience either you are twenty, forty, eighty or a hundred. The memorable May sales became history with plenty learned. I had no time to relax and enjoy a little the rewards of my hard work as the Olympics in Athens were approaching fast and other purchases were pushed my way. No rest for the high aspiring art investor especially when money was sitting in the bank!

I WAS RIGHT IN RUSHING TO SELL AS THE GREEK MARKET TOOK A DIVE IN 2009 FROM WHICH IT HAS NOT YET RECOVERED. MOVING IN THE RIGHT DIRECTION BUT NOT AT THE LEVEL OF 2004-2008. ART IS PROMISING INVESTMENT ESPECIALLY WHEN THE INVESTOR KNOWS A FEW TINGS ABOUT ART, ARTISTS AND MARKETS OF ART.

PETER CONSTANT

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