A Saturday Seminar

The seminar, "The New Asset Class in Malaysia," started with the moderator thanking us for coming out early on a Saturday - it was 10:30 a.m. This is not an early country! Since we again have empty walls we thought this would give us some insights into buying Malaysian artwork. Our first lesson - we don't have the money, time, or knowledge to buy art as an investment.

The seminar in Galeri Petronas in KLCC was well put together - a director of Sotheby's Institute of Art, Singapore, talked about the economics of art as an investment (lesson - once you buy a piece of art,  good luck it liquidating it quickly); the Director of the Art Gallery at USM (just up the street from where I lived at USM) who talked about building a museum's collection; the owner of an art gallery; and a retired diplomat and avid collector. The latter has over 3000 objects of art - confirming that we would never be collectors. Among the problems of buying art other than liquidity included getting bored with a painting (then what do you do with it), running out of wall space (our problem), an artist/style falling out of fashion and how to store and maintain your art. An interesting point - works by Malay artists bring more money in Kuala Lumpur and art by Chinese artists costs more in Penang (arbitrage in the art market).  Indonesian artists are less expensive in Malaysia, Singapore, and Indonesia than in Paris, Amsterdam, London and New York.  But watch out, there are the potential for tremendous bubbles in the market.  To paraphrase Heidi Klum of Project Runway, "what is in one day, may be out the next".

Some of the details we learned, art is a market place, where the artist, gallery owner, auction house and the buyer all have a part.  Artists need to learn to manage their careers (don't spread yourself thin by displaying in multiple galleries or showing in mediocre galleries).  Gallery owners assist the artist in managing their careers.  They play the important function of placement.  Akin to IPO's where stock is allocated to selected clientele, a gallery may work to place the artists work with selected collectors.  Some collectors may support artists early in their careers by sponsoring show, printing catalogues, and purchasing objects.  Once a collector decides to prune his/her collection, auction houses support the market by making it available to a wider audience.  Although appearing to be transparent, pricing can be an interesting practice.  A collector may use both the auction house and galleries to make purchases and sales.  Collectors may make private sales of their collections, bypassing both the gallery and the auction house (the savings can be considerable).  But the final word was "buyer beware." Verify, Verify, and Verify!  Remember, art is an economic activity that is totally unregulated.  You do not make short term profits, and the carrying costs can be considerable.

So what are we going to do.  Go to an art auction, of course.

After the seminar we enjoyed my favorite Malaysian seminar tradition - tea time (here called refreshments) Noodles, poi piah, a donut-type cake, and coffee. We chatted with a retired Malaysian banker - a bit about art, selling property, and musical performance in KL. He pointed out that the RM10 6:30 concerts were created so that office workers could attend an hour concert and spread out the rush hour jam.