The myth of the all-seeing collector
Most art buyers are making way simpler decisions than we give them credit for
Welcome back to The Gray Market! In today’s post, I make a wildly uncharacteristic move by arguing that the top of the art market is not, in fact, as complicated as it’s often made out to be.
As a reminder: TGM is a completely solo, twice-weekly project funded entirely by paying subscribers who like their art-business analysis laced with what singer/songwriter/Anna Weyant paramour Jason Isbell would call a vandal’s smile. If you too enjoy a light dusting of mischief with your rigorous “Well, actually…”, consider upgrading your membership for $8/month or $75/year. Every additional paid subscriber prevents me from relearning guitar and busking on the subway platforms where NYPD officers clear annual salaries of $80,000+ playing Candy Crush on their phones.
It’s auction season again, which means I’m once again out here firing annoying questions like “What’s the mood?” and “How has the landscape changed?” at people who spend their careers advising or pitching to the wealthy buyers who keep the art trade churning. But beyond these open-ended questions, another one I’ve been trying to explore is a little more meta: Are market watchers making collectors out to be something they’re not—and might never have been?
So far, the answer I’ve been getting back more often than not is: actually, yes.
Let me explain. Ahead of major art-market events, there’s an impulse within the trade to try to pin down wealthy people’s propensity to buy art using what I’ll call whole-earth calculus: a complex equation of intertwining macroeconomic and geopolitical variables meant to account for the entire present state of the world. Something like…
[(30-day moving average of S&P 500) X (benchmark US federal funds interest rate)] / (number of armed conflicts in Eurasia + Middle East) - (median percentage of all current US tariffs) X (most recent month’s core inflation rate)
It looks ridiculous when you put it in those terms, doesn’t it?
It should, because 99 times out of 100, it is.
Admittedly, I’ve portrayed all of those factors as meaningful to art market performance in the past, and I still think a couple of them matter in certain circumstances. But the longer I’ve reported on and written about this stuff, the more convinced I’ve become that taking this seemingly all-seeing view distorts the market by giving most buyers way too much credit as hyper-rational actors—and at the same time, way too little credit as individuals.
Collectors can be dumb, too
On the first point, it’s true that whether or not to buy a top-tier painting should be weighed with serious financial rigor, because it’s now a decision that will cost tens of millions of dollars even if everything goes right. But “should” is doing a lot of work in that sentence, and it ultimately doesn’t pay off in most cases.
Remember first of all that everything in the art market is relative. Buying a Frida Kahlo painting estimated to go for $40m to $60m sounds like a colossal commitment of resources to me, a guy who works out of a rent-stabilized one-bedroom apartment stocked with Trader Joe’s frozen foods. But we’re talking about a rounding error for anyone in the billionaire class that might actually buy a painting in that price bracket. A trophy work is, as the old adage goes, cheap to those who can afford it, and very expensive to those who can’t. So pretending that we’re all doing the same math—or more accurately, that the math means the same thing to all of us—is counterproductive.
Bundled with that initial fallacy is the tacit assumption that the winners in our economic system must be treating every aspect of their lives as a game of three-dimensional chess informed by whatever ultra-cogent robot calculus brought them to their incredible wealth. I think of this as the Dr. Strangelove Paradox, in honor of the core theme of one of my favorite movies: that people in positions of tremendous power are usually just as fucked up as any of the rest of us, if not even more so—which in turn means they are just as likely to make decisions based on their urges and foibles as any of the rest of us, if not even more so.
Case in point, allow me to resurface this 2018 Bloomberg story featuring an impromptu, unvarnished look into how billionaire hedgie, New York Mets owner, and golden toilet consignor Steve Cohen thinks about the art collection that he’s spent hundreds of millions of dollars to build:
Steve Cohen owns some of the world’s great modern masterpieces, but couldn’t recall what’s hanging in his office at the moment.
“I forget,” Cohen said Thursday night at the Museum of Modern Art’s Party in the Garden, adding that the works change too often to keep track. Also, he’s “way too busy” to look.
One he has to choose from is a Roy Lichtenstein painting he bought for $165 million from Party in the Garden honoree Agnes Gund. She used the proceeds to start the Art for Justice Fund -- just one of the efforts she was toasted for under a tent in the museum’s sculpture garden [...]
The Lichtenstein would probably suit his Point72 employees’ tastes.
“They like the art that’s square or rectangular,” the hedge fund billionaire said. “Anything circular they hate.”
“He’s being cryptic,” art adviser Sandy Heller interjected as they dined on pan-seared chicken with sweet pea pesto. “He means geometric abstraction.”
“No, I’m serious,” Cohen said. “They don’t like circles. I like circular things.”1
“I like circular things”! This, my friends, is one of the most consequential collectors on earth. Right next to him are guys like Jeff Bezos, whose inability to prevent himself from sending dick pics to his crush snowballed into one of the most expensive divorces in recorded history, and George Lucas, who is “close” to spending $1bn to build a sprawling cross-category museum partly because he hates that people in the art world make fun of comic books and Norman Rockwell.2
I’m not saying I’m better than these dudes. But I am saying it’s absurd to think that just because someone is a generational genius about one or two things that have made them colossally rich they are also a generational genius about everything else they do, all the time.
More important, by definition they are unlikely to be cold-blooded efficiency machines when it comes to making choices about the stuff that they’re passionate about—and those of us who work in the art industry should be thankful for it, because this business would be even less sustainable if buyers always, or even usually, made their spending choices based on ruthless logic instead of primal emotions.
One size fits one
On the one hand, there’s the aforementioned tendency to overestimate collectors as omniscient quants. But on the other hand, that grand narrative also tempts us to underestimate them, too, specifically by assuming that all wealthy buyers make choices based on pretty much the same set of financial incentives and the same basic worldview. And this is just as much of a trap.
As an example, let’s go back three years to assess the supposed downward pressure exerted on art deals by the war in Ukraine. There was a lot of talk about this in the trades at the time, and the longer the conflict grinds on, the more disconnected it seems from reality.
Could this particular war have been a problem for certain collectors? Absolutely. Say, for instance, one of your main portfolio positions was to be short grain futures when the invasion began, spiking prices of wheat, barley, and corn to their highest-ever levels for a few months because of Ukraine’s economic importance as the “breadbasket of Europe.” That could’ve really hurt you… but it might also have really helped certain collectors with opposite financial interests—like, say, a large stake in weapons manufacturing, in which case war and social unrest would actually be quite good for business.3
The examples above are niche, and that’s the point: becoming one of the world’s wealthiest humans is a low-probability outcome that’s hard to make broad generalizations about. It’s also a testament to the fact that if business and finance actually proceeded along neatly predictable storylines, there would be no billionaires, because we’d all be doing exactly the same stuff.
That said, there are of course some outside factors that are universally bad for any business and any investment portfolio. And these outside factors definitely can play a role in the results of a major auction cycle or art fair. If it becomes the 2025 equivalent of Black Monday on Wall Street in the hours directly preceding, say, Sotheby’s evening sale of the Leonard Lauder collection because the AI bubble suddenly, catastrophically bursts, that would probably impact bidding. If China invaded Taiwan and the US started shooting to defend it on the first preview day of Art Basel, sales at the fair would probably take a hit.4
Then again, Beautiful Inside My Head Forever, the two-day, direct-to-buyer auction Damien Hirst staged with Sotheby’s in September 2008, did monster sales numbers a few hours after news broke that Lehman Brothers had filed for bankruptcy, pushing the Great Financial Crisis into overdrive. In the depths of the recession that consumed the next year, Christie’s auction of the estate of Yves Saint-Laurent and Pierre Bergé became the most expensive single-owner collection to cross the block to that point in market history.
These examples are anomalous… but also not. Much as I hate to admit it, the old auction cliché that “quality wins” is often true. History has shown that, even during recessions, wealthy buyers have been willing to compete hard for genuinely fresh, genuinely great material, a phenomenon that runs counter to the most rigorous macro analysis. It’s not that these larger factors are irrelevant. It’s just that they usually don’t matter anywhere near as much as we think.
That means we’re mostly kidding ourselves (and each other) when we try to handicap how world events will affect art trade dealmaking. Most of the time, we’re really just retrofitting a sensible-sounding explanation onto largely irrational decisions made by a small group of people as riddled with quirks and susceptible to emotions as the rest of us.
In other words, buying art is not a calculus problem to most collectors. It’s more like an all-volunteer experiment on impulsive behavior—and by pretending otherwise, the rest of us risk misdiagnosing the aftermath.
In fairness, I can’t rule out that Cohen was just messing with the journalist who buttonholed him here.
The Lucas Museum of Narrative Art is co-founded by Mellody Hobson, an investment guru who also happens to be Lucas’s wife—and whose influence seems like it’s saving him from some of his brashest impulses on the museum project.
I don’t know at all whether products made by Warren Kanders’s defense and munitions companies are or were actually used in the Russia-Ukraine war. I’m just bringing him up as a reminder that arms moguls do, in fact, play a role in the art trade.
I will say that I think October 7 created a meaningful rupture in the art business, but that’s another post entirely.