Sotheby's (BID)

Sotheby's (BID)

Postby winston » Fri Jun 19, 2015 7:41 pm

not vested

IT'S A BULL MARKET IN EXPENSIVE ART

Over the last couple days, we've shown you the bull market in expensive clothes and expensive movies. You can add expensive art to the list...

Last month, a 1955 Picasso painting sold for a record $179.4 million, setting the record by more than $30 million for the most expensive work of art ever sold at auction. (Check out the video here.)

On the same night, a 1947 sculpture by Alberto Giacometti sold for $141.3 million, setting the record for most expensive sculpture in history.

One company thriving in the expensive-art business is Sotheby's (BID). It's one of the world's largest art dealers, selling $40 million paintings to billionaires.

As you can see in the chart below, selling expensive art is a good business to be in right now.

Yesterday, Sotheby's shares struck a fresh 52-week high. Shares have jumped 30%-plus since October.

If the super-wealthy are shelling for expensive art, things "can't be all that bad" for the U.S. economy.

Source: Daily Wealth
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Sotheby's (BID)

Postby winston » Wed Jun 24, 2015 8:23 pm

Expensive-art business Sotheby's hits a fresh 52-week high.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Sotheby's (BID)

Postby winston » Wed Jun 24, 2015 8:23 pm

Expensive-art business Sotheby's hits a fresh 52-week high.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Sotheby's (BID)

Postby winston » Wed Nov 11, 2015 8:12 am

Auction house Sotheby's falls to a new 52-week low.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Sotheby's (BID)

Postby winston » Fri Nov 13, 2015 6:49 am

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Ominous Habits of the Newly Rich By Adam O’Dell

“Prices have reached The Promised Land. I can’t imagine it going much higher though. Can you?”

EditorThose are the words of art collector Eli Broad, who was quoted in a Bloomberg piece about yet another Chinese billionaire’s record-breaking auction purchase.

This one – a 1917 painting called Nu Couche – fetched $170.4 million, the most ever for a piece by Italian painter Amedeo Modigliani.

In the art world, record-breaking auctions are cause for cork popping.

But to financial market investors, art auctions gone wild are bad omens.

World-famous auction houses, like Christies and Sotheby’s (NYSE: BID), have been riding high atop a euphoric wave of new-money Chinese millionaires (and billionaires)… who flourished amidst the country’s state-sponsored build-and-urbanize program. And these cash-rich buyers just couldn’t satiate their appetite for high-priced art.

Really, though, it’s not about the art. It’s about the prestige. It’s about the aura of wealth: a because-I-can mentality. As art dealer Andrew Kahane put it: “Chinese buyers want to be seen [that’s key] spending a lot of mon­ey. They want to be seen setting world records.”

Of course, there’s a natural correlation between economic growth, wealth creation, disposable income and art collecting. So it’s not that surprising that China’s uber-wealthy property developers are riding the wave of their country’s economic boom… all the way to its bitter end, where a painting is worth something like $200,000 per square inch.

Yet, it’s the “bravado factor” of China’s art buyers that whiffs of bubble-bust eu­phoria – the kind that’s typically reserved for the very tip of a toppy market.

Among China’s elite, uber-wealthy, it’s less about fine art. It’s more about fine art at any cost! And, many times, simply for the show of it!

But these Chinese bravado-buyers aren’t really unique, from an historical perspective.
The Greatest Commodity Shortage in History

It’s no secret the world faces shortages in many commodities. The world’s diminishing supply of everything from cocoa to coffee … lithium to lumber … phosphate to plutonium … silver to sugar … is of great concern. But there’s an even bigger and more imminent commodity shortage at hand that no one is talking about. Details here…

Specifics aside, I can’t help but thinking: “Haven’t we seen this before?”

In fact, there are a number of times when newfound wealth blew bubbles in the fine art market, which thrive on the wealth created during above-average economic boom periods.

One look at Sotheby’s stock price tells the story….

See larger image

The players are different. Yet, the pattern’s the same.

In 1989, it was the Japanese CEOs and corpo­rate titans riding high on the froth of Japan Inc. But when the music stopped… shares of Sotheby’s dropped from $37 to under $9. That’s a 76% loss in just 13 months.

In 1999, it was Silicon Valley’s dot.com wealth that sent Sotheby’s stock just past its 1989 high, to $47 a share. But again, when the euphoria faded … it dropped under $7 by late 2002. 86% of Sotheby’s value vanished in the blink of an eye!

Then, in 2007, as the U.S. property market reached dizzying heights, house-flipping mil­lionaires were pumping air back into Sotheby’s stock, which peaked just above $60 in October 2007. And… once again… the stock plummeted near­ly 88% as that bubble burst during the following 12 months!

The point is this: Sotheby’s stock price has acted as a di­rect link… a finger on the pulse if you will… to the bubbliest pockets of unsustainable wealth cre­ation in the world. And this makes it a great “global collapse” indicator.

I actually began writing about this concept in late 2013. It was featured in our November issue of Boom & Bust. Everything to the right of that red vertical line you see above came after that original publication. And as you can see, Sotheby’s stock never went higher, so we were pretty spot on.

Even so, Chinese collectors have continued buying art. But they’re being more discerning. And that has investors worried.

As such, Sotheby’s stock price has been soft. It’s down nearly 40% since November 2013. And despite the consumer discretionary sector being up 12% year-to-date (the most of any sector), shares of Sotheby’s are down 34% since January 1!

Just days ago, the company announced third-quarter earnings. It wasn’t pretty… with auction revenues falling 9% and a quarterly net loss of $18 million.

This news sent Sotheby’s share price tumbling. It’s down a whopping 16% from last Friday’s close!
More importantly, shares of Sotheby’s now trade under $30. And that means the bearish bet I recommended – against Sotheby’s stock – is beginning to pay out.

Ultimately, though, China’s new-money bubble is still a long way’s away from full deflation. And Sotheby’s stock price, too, has a long way to fall – to as low as $5 a share.

And at that price… my bet against Sotheby’s stock could be worth as much as 400% more than it is today.


Source: Dent Research
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Sotheby's (BID)

Postby winston » Wed Dec 30, 2015 9:44 pm

Auction house Sotheby's drops to a new 52-week low.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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