Buying at auction is very common these days. Auction houses, the important ones, make serious efforts to guarantee the authenticity of any work they sell and represent sellers and buyers in the best way. Unfortunately they make mistakes some times that are indeed hard to overcome in the first place.

This is a case of a work that was genuinely presented, signed properly and of the period, yet, the experts declared it not by the artist.

Was it or not?

Major auctions make cataloguing errors

The likelihood of buying a fake or wrongly ascribed painting privately is high. The chance of that happening at a major auction is limited but one cannot exclude it completely. Even though catalogued paintings are diligently checked and researched for accuracy of description by teams of experts, some escape rigorous authentication and are unfortunately sold erroneously as genuine and by the artist ascribed to them.

I had a couple of lucky escapes in 1985, which included the Jongkind. No fakes and no wrongly ascribed paintings of importance in 1986. By 1987 I had enough money to make several investments, which I was trying to do as if it were an emergency! It is evident to me now, looking back critically that there were several problems in my investment strategy and many lessons had to be taken on board and learned well. In hindsight I was an immature investor because I did not not follow these core principles:

· Wait and be patient in your investments. That is the best policy as there are always new bargains appearing on the market and better opportunities to sell if the investment is given a breathing period of time.

· It is not the number of investments that matter but the quality. I made twenty-five investments in 1987 most of which are not worth mentioning, except a few referred to here.

Christie’s, King Street, 19th Century Paintings sale of secondary paintings in February 1987 included a couple of interesting paintings for me. I was still attached to that kind of art rather than the more profitable modern and impressionist categories. I was thinking with my heart and emotions rather than pure maths and numbers. Should emotions of like or dislike enter the mind of a true entrepreneur? Perhaps not, but art is a different sphere and a different world. Emotions have to play a role, like and dislike has to be part of the trade. Money comes later, or should it come first and before anything else? I suppose it all depends on why you are investing in art – for business, for pleasure, or both?

I researched the Christie’s sale well looking into many possible investments but finally ended up with a Barbizon school painting by Henri Harpignies who was selling very well in New York, and an orientalist work by Eugene Alexis Girardet, a market also doing well across the Atlantic. The idea was to send both paintings to New York immediately aiming to make at least a 50% return.

Asking for the opinion of an expert on an artist is no shame

Henri Harpignies

Another genuine example

(French, [1819-1916], Successful landscape artist of the Barbizon school working in the second half of the 19th century alongside the Impressionists. Auction price range £2000- 30,000)

6th February 1987, Christie’s London

The Henri Harpignies painting was an attractive landscape composition of good size. I was not that familiar with the artist’s work but Christie’s knew better, and so I bought the painting on trust investing £2200 in it. The painting needed attention and framing, so I took it to the best restorer and framer in London at a cost of twelve hundred pounds, an enormous sum of money in those days.

That was a serious mistake. I should not have spent £1200 restoring and framing a painting, which at best was worth about £4000. That was trade suicide. In general the rules are simple:

· Frames should not cost more than 10% of the total selling price of a work of art.

· Spend no more than 20% of the value of any work of art on restorations.

· If you are reselling cheap art it might be better to leave things as they are.

It was ignorance and inexperience that I paid for, but fortunately and soon enough I learned to have paintings restored and frames made at a fraction of that amount. I learned the hard way, the terribly expensive way. There was nobody to advise the amateur investor, no books to refer to and no experience to guide me.

Sotheby’s New York was the destination of both paintings and by May 1987 had been shipped there. All the details of sale had been arranged prior to dispatch of the packet, but there are still a few details that vendors must be aware of when shipping paintings to auction houses:

· There is a danger of damage and loss therefore insurance is a must.

· The opinion expressed on the basis of photos is always with the proviso “upon inspection of the actual painting.”

· The estimate might change once the item arrives at the auction house and the experts examine it closely.

The paintings reached Sotheby’s New York in one piece, but at the back of my mind was the worry of Sotheby’s final expertise. One never knows what they might decide or uncover in their efforts to be accurate and fair to both buyers and sellers. Time passed and I was expecting the good news from New York, the city that had assisted me to survive in the seventies as a young student and in 1986 as a fledgling investor with the Hofmann.

New York was to be the venue of my important sales that autumn with paintings such as the Montezin, Harpignies, Girardet and Choultse. The expectation was a return close to twenty thousand pounds in total. The wait was long and anxiety prolonged as summer was approaching. Sotheby’s have always been prompt in responding to consignment issues. Was there a problem?

The letter from the expert of Sotheby’s was short and to the point. The Girardet is fine and although heavily restored we are still happy with it. By the way that painting sold for £3,800 in November of that year, returning me just over 50% profit, thus verifying my view that New York was a better market than London.

However, “The Harpignies is not up to standard and we have asked the expert’s view on the piece. The advice is that it is not by the artist. We are sorry to give you such bad news.”

Devastating news and the nemesis of a wrong investment visited unexpectedly. I had stepped on the banana skin I was so afraid of. The Harpignies was a fake in spite of its purchase at Christie’s! The news was a major blow and shook me to the core. I expected anything I bought at the most prestigious auction house in the world to be genuine, correct and as described. I was at ease buying with Christie’s as their paintings pass an inspection of two or three experienced experts, but regrettably it was not so in this case, and I was seriously out of pocket.

So readers, caution! Even top auctions can sell wrong paintings!

However in spite of that major setback, I was determined, I was on a one path, one direction mission, and had to carry on. I had made plenty of money in 1986 and I was able to take the knock from the Harpignies painting. Besides, I was hoping other investments would make up the losses incurred.

Guarantees of authenticity at auctions

Christie’s and Sotheby’s have earned the trust and confidence of their customers by offering guarantees of authenticity of five years on art they sell. Guarantees at other auctions can vary from two years at larger auctions, to months, weeks or no guarantees at all at smaller auctions. It is therefore imperative to read the conditions of sale for every auction you intend to buy or sell at.

The five-year guarantee at the major auctions reads as follows:

“ If a purchase is proven not to be genuine and not by the artist stated, then, provided the painting is returned in the same condition as bought, we will refund the purchase sum but not any expenses incurred because of the painting.”

That I already knew well. The Harpignies had cost an additional £1500 in expenses to restore, frame and ship to New York and back to London. That was a hefty loss and a very serious lesson to learn. Knowledge and experience gained cost high sums of money, but unfortunately there was no other way to carry on trading.

The experience gained from the Harpignies trade was invaluable and well worth remembering:

· The value of a painting dictates a proportionate restoration expense that should not exceed 20% of the final selling price.

· Buy from auctions with guarantees of authenticity.

· Major auctions as well as smaller ones make mistakes of attribution, thus great care should be taken when buying to ensure authenticity.

Auction houses honour their guarantees and legal responsibilities. The Harpignies was returned to Christie’s. The verdict of the expert could not be questioned and the investment of £2200 was returned promptly. The expert in charge, who was a good friend by then, apologized for the unfortunate event and promised to help financially with illustrations of paintings in future sales, so that I could recover some of the expenses incurred on the painting. I appreciated this and time and again illustration charges were waived. As a result of this good will and my friendship with the expert in charge, Christie’s were to make some serious money in the future from my business with them.

The expert was actually to help more than that later and when the difference between his opinion and that of others was in the tens of thousands of pounds. For that I am still eternally grateful to him. He was indeed a good businessman, and in helping me he helped Christie’s business too. Well done to him! Major auctions are sympathetic and understanding to their clients’ needs and problems. They try to help as much as they can and within the interests of the business they work for. However exceptions also exist, which will become apparent in later entries.

The most important lesson with the Harpignies purchase was loud and clear and it needs to be repeated and expanded:

· Experts are human and thus can make mistakes. They have an opinion, which at times, even though rare, might be wrong. Nobody is infallible.

It is also important to note that:

· There are experts on individual artists and they should be consulted before works of art are catalogued. Unprofessional cataloguing? No! Careless and quick cataloguing!

· Dealers make mistakes too or at times they gamble on a painting as being authentic or by a certain artist. I did not gamble in the Harpignies case. I made an investment relying heavily on Christie’s attribution, which happened to be wrong.

I concluded that I had to make sure myself that what I invested in was well researched and checked many times before it was purchased. If in doubt, I never paid my hard earned money. Even after I had bought something, I still carried on the checking to make sure everything was in order. Fakes are mushrooming all over the art world and one has to be one million percent sure that what is purchased is the genuine article. Keep your eyes open and tread cautiously as in rare cases such mistakes might be deliberate. Fake is not just banana skins you skid and fall on. The Harpignies case was a small skid by the summer of 1987, but by 1990 things would become much more serious. The Knoedler Gallery case in New York in 2012-13 is a case of millions exchanging hands for possible fakes.

Have I always followed my own advice and learnt from my own mistakes? Are you joking! I am human, I am stubborn and most of all I repeat mistakes, which as the ancient Greeks used to say:

“ To commit the same mistake twice is not a sign of a wise man”

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