May - comments

In my last post I commented;
This prompts me to comment on something I have been pondering recently. That is we may see solid increases in the market value of quality miniature portraits over the next few years. We have seen the price of both gold and silver rise a great deal in the last few years, also agricultural commodities. While they are somewhat opposite in nature, I sense there will be an element of profit taking if professional investors sense the markets are approaching any high point.

That then provides investors with a dilemma as to what to reinvest in.  Interest rates are very low, and major Western currencies and economies have been under pressure, hence recent sharemarket rises. There will however be a resistance to following the market to the excessive PE ratios of several years ago. Hence, high quality art and antique items seem likely to become attractive for defensive investment purposes.

I did not expect to be proved correct so soon! They may rise again, but in the week since I wrote the above comment, the value of silver has fallen by 25%, to under $35, gold is down close to 10%, and oil has also fallen back. This is due to various factors, including profit taking.

The Federal Reserve deserves a lot of blame for these Bubble Type price fluctuations. With the QE2 policy and low interest rates, money is available, virtually for free to major investors. There is literally "gold on the streets" for the picking up. But once picked up, there is the question of how to invest it? Interest is a charge for risk, but with minimal interest costs, the perception of risk is also lessened and speculators have used the "free money" to buy commodities, causing a bubble and rapid food inflation around the world.

I also suggested in my previous post that profit taking gains from commodities might be reinvested in quality miniature portraits. Sothebys obviously have come to the same conclusion, as during the week, I also received prior notice of the auction of a miniature portrait as follows;
A locket-size self-portrait by Mexican artist Frida Kahlo is displayed in this undated photograph released April 27, 2011. The self-portrait and a historical sweep of works by Fernando Botero will be sold next month at Sotheby's in its 20th century Latin American auction. Sotheby's said "Autorretrato en Miniatura," or self-portrait in miniature, which sold for $225,750 in 2000, could fetch up to $1.2 million.
It is Kahlo's smallest work, measuring just 2 inches by 1-5/8 inches, the auction house said. In the oval portrait, she appears youthful and serene and wears chandelier-like earrings that emit a muted sparkle.   REUTERS/Sotheby's.

To me, this example shows that Modern Art is another "investment bubble." A distant echo of the South Seas Bubble and the Dutch Tulip Bubble, and a more current echo of the 2000 Dot Com Bubble, also, sadly, the 2006 Dow Index Bubble, and the Housing Bubble.

Using a crude measure, at $1,200,000 the Kahlo represents about $400,000 per square inch, whereas the record for a large Kahlo is $5.61m achieved in 2005. If that was say, 20 inches by 20 inches, and a comparable value per square inch, it would be "worth" $160,000,000. Which is plain daft!

There are in this collection about half a dozen self-portraits in miniature, mainly by American artists, showing a great more artistic skill, and acquired for about $500 on average. Thus, (tongue in cheek), I am willing to consider offers of $1,200,000 each for them, or say a special bulk deal, of all six for $6,000,000!!

Restoration of Miniatures
Purchasers of miniatures can encounter damaged miniatures. It can be expensive to have these restored, as it is time consuming and requires a great deal of skill on the part of a restorer.  Although, the commentary is not in English, a number of very careful and clever restorations by one collector can be seen at

As can be seen in the opening image, this collection is very impressive. The prime focus is on Spanish miniatures, but the before and after images of miniature portraits requiring restoration are very interesting. It shows how apparently ruined miniatures can be restored to their former appearance. The collector concerned deserves a great deal of credit for his efforts.

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