The Banker's Guide to Art

This is a film directed at you.

Yes, you. Bankers of Britain.

Now, ladies and gentlemen,

you may have noticed that the art market

has done pretty well in recent years.

Sold, 887 at 450,000.

Better than the stocks and shares,

commodities and those complicated financial products

that you trade in.

BELL CLANGS

If you go back ten years it was worth half of what it's worth today.

It's worth about £40 billion today.

The prices have just gone, in some cases, stupid.

10, 20 times what one originally paid for them.

A work of art is beautiful,

but its...but its value is beyond comprehension.

You shouldn't really be buying into art

with less than, probably, 100,000, or 200,000.

About £100,000.

190, it's still going, ladies and gentlemen. Jump back in.

190. 200,000. And ten I'll take.

And you, dear bankers, are particularly fortunate.

You are living in the gold-rush city of the art market.

London has become an amazing art centre, and, really,

outside of New York it's THE centre of the art world.

And in some ways it's a more interesting centre of the art world,

because it's a more international centre.

Many of you are already buying art.

That's one of the reasons the market's grown.

But not all of you.

Some of you are still shy about

spending your strenuously earned millions on art.

£2 million. £2 million.

You are right to be cautious.

Making money out of art is not as easy as it looks.

Your bid. Don't bid against yourself,

I'll take it once from you, 220, 230.

It's interesting how many collectors regret

their first two or three buys.

The eight paintings of dogs playing poker in my basement

are never going to re-sell!

But there is a way to play and win in this market.

Just like there is in the financial world.

The business may have grown beyond all recognition

in the last two decades,

but the tricks of the trade are as old as time itself.

Look at euros, at 76 million.

-It's cheaper.

-LAUGHTER

Art follows money.

Follow my advice and you too can make a fortune

in the casino of culture.

Being in the art world is like being in the Mafia,

there are things that no-one will talk about.

But I just feel compelled to share the information.

It's a question of how much you have to play.

7,750,000. Eight million.

Last chance, I'm selling it.

You go to Las Vegas, you want to play at the 5 table,

the 50 table or the...10,000 table, or the 20,000 table?

I mean, what's your... pain threshold?

Yes or no?

Then, how close to the bone are you really going to cut this thing?

I'm going to imagine that you have the basics -

over £10 million in the bank, a yacht, luxury London apartment,

a second home in Monaco, an offshore bank account,

and if not a private jet then at least access to one.

Good. Are you sitting comfortably in your designer Italian armchair?

Then we can begin.

The first rule is simple.

Think of art as an asset class.

An investment, like stocks and shares, gold and currency.

Of course, it can be pretty.

But art is better than a vase of flowers or a handbag.

Anybody else now?

At 1,600,000 and selling here.

There are lots of investments you can make these days

in luxury objects - boats, cars -

where the value goes down.

But there are some where you know the value can go up.

8.5, there it is.

2,500,000.

Non? C'est non.

2,700,000. Thank you, sir.

Do you want to come back in?

Excellent.

-Are you definitely out?

-Are you done?

-2,300,000 is here, then.

Catherine. Sold at 8,500,000, and your number's 881.

Francis Outred is one of the masterminds

of the rise of the art market.

So these are our New York highlights.

These are sort of masterpieces of minimalism.

He cut his teeth promoting Young British Artists,

before working at the big auction houses

Sotheby's and then Christie's.

Tonight we had 113 lots.

Of which 99 sold.

Just 14 were unsold, so about 92% overall.

Really incredible. I think that shows the thirst for art,

it shows the desire to collect art.

The growth of value that we've seen over the last 15 years

has encouraged more people to come into the marketplace...

who want to invest in something they can enjoy.

Let us not deny that many of the wealthiest people in the world

buy art for the same reason that they date models.

Because they can. Because they love how they - I mean it - looks.

But there is an army of collectors who quite understandably

expect their art to do more than please their eye and mind.

I think you'll find that almost every major collector is looking at,

"I've bought this great picture, and, by the way, what's it worth?"

I know a lot of collectors now, in New York City particularly,

and it's quite disturbing to me,

they strictly look at the financial aspect.

So they want, you know, sofa art,

meaning if it can't hang over the sofa they won't buy it.

And they want to buy what they think the bourgeoisie of tomorrow

will want, so that they can buy it and sell it to them next year.

You know, someone who buys a screwed-up...

-you know...

-Go on!

-You know...

-LAUGHTER

That. Someone who's prepared to go into a gallery

to buy that for ten grand, or 100 grand, let's be...

-you know, let's be generous about it.

-Yeah?

£100,000 for a screwed-up piece of paper.

Now, we're talking about the kind of person who won't spend 1p

on anything without knowing they're going to make money back.

Jake Chapman, one half of the British artistic duo

the Chapman brothers,

saw his work take off in critical acclaim - and financial value -

in the '90s,

as one of the new generation of British artists known as the YBAs.

There has always been a convergence between the notion of

a beautiful work of art and its speculative figure.

But in today's world art is more useful than it ever was.

It's a financial instrument in the sophisticated global economy.

There are hedge funds investing in art,

and finance companies lending money,

taking the art you own as collateral.

Philip Hoffman runs the world's largest business of this kind,

with over £240 million in assets.

This is an incredibly busy time of the year.

We're involved in an 80 million transaction

that sprung up about a week ago,

we're signing off on deals

of perhaps 10 million or 15 million this week,

and we're arranging various transactions

from low-end to high-end

of many, many millions for clients in multiple countries.

Price rises have been so steep that many veteran collectors

have been priced, almost tragically, out of the market.

I'll make a statement now concerning the buying of pictures

which you have to think about for a few seconds.

I can't afford my own pictures.

If they came on the market, I couldn't afford to buy them.

The prices have just gone, in some cases, stupid.

10, 20 times what one originally paid for them.

Until the 19th century,

the art market was a trade that just trickled,

where aristocrats bought antiquities and Renaissance masters.

The exception was 17th-century Holland.

There the urban middle class drove a bull market in art.

But the European art market only really took off in the mid-1800s,

when all the nouves, the wealthy new entrepreneurs and industrialists,

caught the collecting bug for both Old Masters

and what was then modern art.

Art became a popular passion, too.

Half a million people were attending the Paris Salon

by the end of the century.

Here are the country bumpkins, erm,

amid the town sophisticates,

creeping into the edge of the picture.

This was real middle-class life,

and it was loved and priced into the skies by middle-class people.

It was the first really big price on the Victorian contemporary-art boom.

£1,500 in 1858, which hadn't been seen for a living artist.

The change to seeing art as a form of profit

came in the middle of the 19th century

when the art market fell into the hands of the middle class,

into the new big industrial fortunes.

And the great difference between a king, a prince

and a landed aristo and the new middle-class merchants

is that the former, by and large, bought art to keep,

while the middle class has always kept an eye on a profit.

At 1,450,000.

Today's collectors and dealers tell you that art as an asset

is a recent phenomenon.

So, you might quite reasonably think

this is a craze that will come and go.

Anybody else now?

But the smart guys in the room, across the Channel,

saw the future over a century ago.

Back in 1904, a group of collectors, under the direction, if you want,

of a private collector called Mr Level,

decided to put money in a big pot

and buy works of contemporary artists

during a period of ten years.

And they had decided from the beginning

that after that period of ten years

they would sell the works at auction and hopefully making a profit.

In the end he acquired - they acquired -

145 pictures, drawings, watercolours.

The total of their purchase comes up to almost 27,000 French francs.

Among the works Level bought was a legendary Picasso.

Level had to negotiate to buy it for 1,000 francs with Picasso.

Picasso was not easy to convince to sell at this price.

But Level gave him an advance,

300 francs,

and he caught him like that because Picasso spent the money

and then he had to give him the picture!

It's huge. It's two metres 35 by two metres...40 or something.

It's a very large painting.

In fact, it is so large that...

they never were able to hang it anywhere, so it was...

it always stayed rolled up!

Er, Level bought it in 1908,

and they never really enjoyed this painting,

it was kept stored somewhere.

Because it was too big.

In 1914, Level sent his 145 works of art off to be auctioned,

the Picasso included.

The Picasso is here, Picasso, Les Bateleurs.

It's the first time it comes up for auction

so there is a lot of tension in the room.

People have come to look at that.

There is a battle between two dealers,

and finally a German dealer buys the picture for more than 11,000 francs.

People start clapping their hands and they are so happy.

There was a person there who writes in the paper the next day

that he felt so happy he felt like singing.

In total Level's collection was sold for almost 100,000 francs,

four times what he paid for it.

That was the gratifyingly profitable dawn of art

you bankers could bank on.

If you look at some of the wealthiest families in the world,

the Mellon, the Rothschilds,

the Rockefellers, Steve Cohen the hedge-fund manager,

they have made more money, probably, out of their art investments

over the long term than they ever did out of their businesses.

But there is something new afoot.

Now, you bankers don't just trade in one thing in one country,

and you all lost a packet in the crash,

so that's made art a more desirable,

useful and profitable asset than anyone dreamt possible.

Everybody burned their fingers back in 2008,

where they had all their money in either stocks or in bank deposits

or in bonds, and even real estate, and all of them collapsed.

And people were scrambling around thinking, what the hell do I do?

It's been another tumultuous morning on the markets.

Some of Britain's biggest banks

have seen their share prices plummet again.

The Dow Jones average closed down more than 500 points this afternoon.

Lehman Brothers is now officially...

-GEORGE W BUSH:

-The market is not functioning properly.

Major sectors of America's financial system are at risk of shutting down.

We are a minute from midnight in terms of outright catastrophe.

And, actually, art didn't collapse.

And there were some... and a year later, in 2009,

there were some world-record prices paid for...

Giacometti, Walking Man, that made over 100 million,

new world-record price.

This angular piece was inspired by Giacometti's belief

that the stride symbolised life force.

So what I said is, look back at history

and see in economic downturns

what happens to all the other asset classes, and what happens to art.

Since the financial crisis,

governments have printed trillions of dollars and pounds and euros,

wondering where some of it went.

Is that a bid? 73 million.

Here it is.

Sold at 350. 910.

You've got a situation

where I think art does better during times of income inequality.

We've seen studies on that.

Not just general economic activity.

So that when the rich are getting richer,

you know, after you've bought your three homes and five Ferraris,

art seems to be a natural place to put the rest of your excess cash

looted from your... central-African country.

So...

So, now you know how to think about art,

it's time to turn your attention to what art to buy.

Today many of the world's most influential collectors

have come here to Frieze, one of the world's most important art fairs.

Nowadays, most art is bought at fairs like this,

where galleries from all over the world rent booths

and show a selection of work by the artists they represent.

It's actually quite funny.

If you ask dealers, gallery owners and collectors

what art you should buy, they will always initially say...

It sounds like a cliche, but collect what you like.

Collect because it looks good on your wall,

that every day you walk by it you smile.

These works are all about a kind of fictional archaeology.

Something that appears like it's from now,

right, this figure is wearing Nike shoes.

So this one is made of ash, volcanic ash,

-and steel.

-I have one of his pieces on my desk.

It's a different type of history, forward-looking, looking back now.

I think it's fantastic.

Jim Chanos, estimated net worth 1.5 billion,

is one of the world's most successful hedge-funders,

famous for shorting the market.

Don't do this for the money, it's a bit of a mug's game if you do that.

I think the people who have done the best in terms of collecting or...

are people who actually...

they are the believers, they actually love something,

they're enthusiastic about something.

They believe in it, it excites them, it wakes them up

in the middle of the night, or they're like, "I really want that!"

And then they get it and they feel so good about it.

Adam Lindemann is the son of a multi-billionaire entrepreneur

and is one of the world's most successful collectors.

You know, I have a terrible case of FOMO.

You know what FOMO is?

Fear of missing out. I have the worst FOMO in the world.

So if you don't show up you don't know.

He was an early buyer of YBAs Damien Hirst, Chris Ofili

and Japanese pop artist Takashi Murakami.

And having established himself as a collector and then a dealer,

he went on to open his own art gallery.

From the gallery perspective, from the collector perspective, I mean,

if you don't show up you don't really see what others are doing,

what others are showing, what others are selling or buying.

Market knowledge, and also, there's always something to find.

I mean, this is like a treasure hunt.

If you don't love it, don't think the next person will.

It is true that many of the world's wealthiest people

do buy art because they love it.

But, dear bankers and novice collectors,

that is a terrible idea

if you wish to make a proper return on your equity.

And, whatever they may say at first,

billionaire collectors know it can be a road to ruin.

Any collector's journey will always transform as they buy.

I think it's interesting how many collectors

regret their first two or three buys

but, actually, in the end, come back and say,

"I'd like to keep that, it's part of my history."

When someone tells you, "I buy what I like," that's the kiss of death.

The thing is, you like what you know.

So if you've only had fish and chips

and someone puts a piece of sushi in front of you,

you're not going to like it.

But if you try sushi, and then you get used to it, suddenly,

you feel good, you love sushi.

You love Japanese restaurants, "I can't wait to go to Tokyo!"

But you're the same person who two years ago loved fish and chips.

The more you learn, it's going to change.

The more times you go to the Tate, the more times

you see the galleries, your taste is going to change.

3 million. 3,100,000.

If you wish your art to pay dividends then you need to focus on

the art where other collectors compete to own works.

Thank you, sir.

Because that is where prices rise.

2,300,000, paddle 827, the Richter.

Richter, Warhol, Hirst, Basquiat and Koons,

all the big-name artists have shot up

because their work has been chased by millionaires and billionaires

from Europe, Russia and Asia.

There is a herd mentality

among a certain 0.0.1% of people,

I think they're called the plutocrats,

who don't really come from any particular country,

who fly about in aeroplanes, and they all know each other,

they all want the same interior designer,

they all have the same dentist, they all want the same art.

Trends in contemporary art are set by a few very influential

and affluent collectors, as Charles Saatchi once did.

He established a new movement in art in the 1990s

by heavily collecting a generation of Young British Artists,

whose art scandalised a nation and enthralled the art market.

Saatchi's like Ronald, isn't he? He's the universal pariah.

He's never going to be allowed to be a person

who had any positive influence on the art world.

Every single time I hear, if someone says, "What about Saatchi?",

there's this kind of notion that somehow there's this

malevolent behind-the-scenes character who put together something

which we shouldn't believe is a thing, and that's kind of...

That's quite weird. Because it also sort of presents the notion that,

if you think about the YBA Sensation thing,

that somehow there was someone manipulating things,

which is not to say there's not, but the question is to say,

when are people not manipulating things?

I think there's no doubt

that there's a sort of billionaires' battle going on here.

The desire to have the best works of art,

the most difficult to obtain, the fact that

it is actually quite difficult to get your hands on

a really prime Jeff Koons, in fact virtually impossible,

I think that adds to this sort of... this competition

and this is one of the reasons why

very rich people are vying to bag the best trophies.

But once again, permit me to repeat myself,

don't think that this is a newfangled fad.

In the 19th century,

industrialists in Britain and America

competed to buy the big-name artists of the day.

Just then as now, you had sudden, dramatic,

explosive rises in price.

The best example of all

is the picture known in those days as The Grand Canal,

which changed hands ten times between 1859 and 1885.

And it moved from £2,600 to £20,000 in those 23 years.

But Landseer went up like a rocket, Millais, Holman Hunt.

Then you had the sexy painters of ancient Greece and Rome

who got the nude back into the Victorian household

in the 1870s and '80s.

Anything which looked muddy and dark and oily,

they shot into the sky and stayed high until 1908, 1909, 1910.

Ladies and gentlemen, follow the money,

buy the art liked by people more important than you.

I have absolutely no idea what this is.

So, let's see what our important collectors are looking at today.

-Como esta?

-Voy a hacer un interview en tu booth.

-Adelante.

-Please.

-BBC.

-Excellent. Go ahead.

Any press is good press!

Jimmie Durham is an American-Indian artist.

He's different. He's conceptual.

I think the works are aesthetic and beautiful.

I like the pathos, I like the sadness of it.

You know? It's very poor, but it...

You put that Venetian luxury in it

and there's some sort of a poetic energy in it.

I'm dreaming of doing a show of Jimmie Durham,

because I think he's incredibly timely

and he won't show in the United States.

Maybe I like this one better. Yeah, I like this one better.

I would take this one over that one.

I think that tall thing, that might break or whatever,

but that's a good piece, too.

Let's try and buy this.

It's not that expensive either. That's the other thing.

It's like...I think it's a good deal.

Well, Theaster Gates is a Chicago-based artist and I think

he actually embodies the passionate side of contemporary art.

One of the few artists I think right now

that is sort of saying something beyond his art.

His work really focuses on civil rights in the United States

and the black experience in the South.

His father was a roofer in Mississippi, worked in tar.

And he uses things like tar.

I have a tapestry of his in Miami that's made of fire hoses

from the period of which the demonstrators were hosed down.

I think he's an important artist. I have a number of his works.

So can I buy this one?

I believe he's on hold, but I can check. I can double-check.

Would you let me? I've been wanting to buy a Jimmie Durham for,

-like, two years from you guys!

-I know.

-Why won't you sell me one?

I will. I will sell you one.

No, but tell me why?

-You don't like me?

-Don't say that.

Now, perhaps you are still holding out,

one of those obstinate new collectors who say,

"I am going to buy the art I like, just like Adam Lindemann."

Well, you may find that simply impossible.

As a new collector, to get into the mega galleries,

they're difficult to enter,

and some of the galleries have hot artists they can sell everywhere

and they don't need new collectors for that.

But they also have artists which are not that popular

and in order for you to build a relationship with the gallery

it means that you have to buy some things you don't want

in your collection, but they need to get rid of.

So, who to turn to?

Well, you pay top dollar for advice on the best healthcare,

childcare, interior design -

so too, art.

Even billionaires like Jim Chanos

don't just buy the art they or their friends like.

Oh, no. They hire experts whose job is to identify

the art and artists that are on the up.

We've gotten into this environment

where the advisers are in the middle,

so we're now in this sophisticated art environment

where you don't just buy your art, you buy your adviser

and then your adviser tells you what to do.

When young people come and say, "Where should I start, Jeffrey?"

I say, "For heaven's sake, get a good adviser who you trust."

I got invited as an amateur

to judge the Royal Watercolour Society competition and...

met for the first time - this was 30 years ago - Dr Christopher Beetles,

and we became friends.

And I realised that I knew nothing about art once I'd met him

and he guided me very carefully

and taught me to look more carefully and taught to me how to look.

Somewhat of an irony that the picture I chose

for the winning prize was dismissed by Dr Beetles

and the rest of the snooty people on the panel

and won the People's Prize.

So I suspect I've always had... the people's view,

but he was able to refine that.

Lisa Schiff is an art adviser whose clients include Leonardo DiCaprio.

As there is more product and more supply,

it's also ever more complicated and ever more important,

if you're thinking of things as asset allocation,

to be very selective about the artists that you're looking at,

and the works by those artists that you're looking at.

This is a female painter named Elizabeth Peyton.

She's really a portrait painter but also someone who depicts the people

and friends around her.

This is a drawing of Phoebe Philo, who's an English designer

I believe works for Celine,

and one of the things I love about Elizabeth

is her ability to capture the soul through the eyes.

I mean, she has an unbelievable ability to depict that.

Elizabeth Peyton has been one of the most commercially successful female

artists since the '90s.

Back then, you could buy a painting by her for around 70,000.

Now, they could set you back half a million.

Like this contemplative portrait of Leonardo DiCaprio.

I will make sure that I can disclose what I think the market...

future probability is of any work of art that we're going to buy,

just so there are no surprises.

And I could be completely wrong, by the way.

I'm not a magician, but I can say this is what I SEE happening,

here's the POTENTIAL.

And maybe there's no potential.

Of course, great wealth is not always acquired

by the most elegant means

or made in the most democratic environment or fairest society.

You might have made your fortune mining potash

or betting on the collapse of the property market.

But an art adviser can help you transform your home

into an oasis of culture.

Malek Sukkar runs a waste-management company based in the Middle East.

In London, he and his wife have been collecting art for over a decade,

listening carefully to their art adviser.

She's Viennese. She's sadly since died.

She was actually one of the OWAs, the Older Women Artists

that suddenly trended a couple of years ago.

Prue O'Day has run a consultancy since the 1990s.

Among her clients, accountants Ernst and Young, multinational Unilever,

and the British Treasury.

When I was originally recommended to them,

they really just wanted to fill the house with lovely things.

They were very curious,

but sort of quite apprehensive about the art world.

This corner brings a smile to everyone's face.

That's the quirky side of the collection, right?

It's where we began to have a bit of fun with installing

in a very different way.

'We started off quite gradually,'

and then they really got the bug and could see the huge feedback

they were getting in their personal lives.

Collecting in depth makes you follow the trajectory of the artist,

and you become more acquainted with their work

and...they become your friends, so to speak.

I think what's really interesting is

they're a very engaging couple, they're very well liked.

'And they have a lot of fun.'

This piece is actually part of the naughty side of the collection

that no-one knows about. It's a little teaser.

A beautiful bum painting in the smallest room in the house!

And so appropriate.

But Malek really carries in his soul

all of the troubles that have happened in Lebanon,

which he was directly affected by, and he's quite honest about this

visceral thing that really, really moves him.

Do you remember when we saw that piece the first time?

I'll never forget.

Because this was our first time together.

And within a couple of minutes, Malek said, "I want it."

A lot of people are shocked when they look at it.

I've learnt to love it, to live with it, to appreciate it,

and every single day I discover a little bit more humanity

in that painting.

Here we've got the Pawel Althamer,

which we found at Frieze in about 2011.

-He's quite a spooky artist, I think.

-Yeah.

'I was very impressed from the outset about...

'their bravery, really.'

Because if everyone is saying to you,

"Oh, this is just the most extraordinary work and this is the best one!"

you tend to believe everybody else.

I think it's a step forward in the collection history,

again with this idea of decay and decomposition.

In the end, it's all subjective and no-one knows for sure.

Someone asked me once, "Your house is on fire,

"which piece do you grab and run away with?"

And I think it's this piece by Louise Bourgeois.

It's very minimalistic but has a lot of meaning.

So, you've started your collection, you've got an adviser.

Now it's time to venture out into the wider world.

In the art business, a sales pitch can be all smoke and mirrors.

The dealers will always tell you, like, you know,

three seconds after the doors open, that everything's sold.

But of course what that means is that people have reserved the works.

You know, the art consultants and advisers go through and they go,

"My client's interested in that, that, that and that,"

and thus the work is reserved,

and if you ask about it a day later, they'll say, "Well, it's sold."

But in fact of the matter,

no cash has yet changed hands and may never change hands and so works

that are reserved or taken off the market or off the walls at Frieze

may in fact be back on the market within weeks.

In the world of high finance, as you traders will know,

there are burdensome regulations.

You have to do the best by your clients,

whether you are buying or selling.

If you don't, you can get a hefty and irritating fine.

In the art world,

you'll be pleased to hear that almost none of this applies.

There are frequent instances where conflict of interest could arise

which wouldn't be necessarily the case in other industries.

Kenny Schachter collects, deals and writes about the art market.

If I'm selling a painting for 20 million or 30 million,

which I've done, the fees are typically 2-4%.

But the law is pretty much whatever you can get away with,

for all intents and purposes.

780,000?

Still going at 780,000.

Lady's bid, centre right still, Louis.

Last chance, I'm selling it at £780,000.

The issue is this. If you're a collector,

you're newly wealthy and you'd like to join this private club

that's exclusive and storied

but you're not a member of it yet,

there is a natural tendency not to want to rock the boat

and to want to play by the club's rules.

But the club's rules go like this -

I will tell you how much an object is worth,

I will tell you what is authentic and what isn't

and you will pay however much I tell you this is worth.

You have it, 826 at 300,000.

Unless you have a specific contract for the purpose,

the art dealer will be working in his own interests, naturally.

950 is here.

As one Russian oligarch recently found out to his cost.

For ten years, Dmitry Rybolovlev, the owner of Monaco Football Club,

bought art from this man, Yves Bouvier,

an art dealer who runs the storage facility the Geneva Freeport.

So, Bouvier is in this position of knowing what everybody is storing

in Freeport, which gives him really an upper hand,

and then he turns around and sells it

for extortionate prices to this unsuspecting Russian.

Bouvier was essentially working as an agent on behalf

of this wealthy collector, and was guiding him on what to buy

and also able to acquire things that weren't for sale.

So he felt they had a really symbiotic relationship

and he understood he would take a cut. That's normal,

but a cut that might be a few percentage points

instead of something like 50%.

Bouvier sold Rybolovlev 2 billion worth of art.

What Rybolovlev didn't know was how much Bouvier had marked up his prices.

Bouvier bought a Gustav Klimt for 127.5 million

and sold it to the Russian for 187 million,

making a profit of 60 million.

Bouvier bought Leonardo da Vinci's Salvatore Mundi

for under 80 million

and sold it for a profit of 47 million.

He also made a massive profit on a Modigliani

he bought from the hedge-funder Steve Cohen.

Then one day the Russian oligarch found himself chatting

to Steve Cohen's art adviser.

A friend of mine called Sandy Heller was at a dinner

sitting next to a Russian fellow called Rybolovlev,

as they are prone to be called.

And Sandy Heller said to Rybolovlev, "What's the last thing you bought?",

which is a conversation which typically transpires

amongst collectors and dealers, and it was a Modigliani painting.

And then Rybolovlev asked Sandy, "What was the last painting you sold?"

and it was also a Modigliani,

which turned out to be the very same painting, so of course,

you don't have to be a detective to figure out

what the next question was, and the Russian, Rybolovlev, asked,

"How much did you sell the painting for?"

The wealthy collector may have no idea what the value of a work should be.

They know they want in, they know they want famous names.

They actually like, to a certain extent,

the high price tag that they're expected to pay,

but they also don't want to be screwed over.

Rybolovlev is now suing Bouvier for fraud,

but in a world which runs on word of mouth rather than paperwork,

he is not thought to have a very strong case.

At one point, Rybolovlev turned around to Bouvier and he said,

"You've charged me... Your fee is the price of a Boeing!"

In terms of the collectors and the dealers, this is a rich man's game,

so it's not like eradicating child labour.

1,490 is here.

£1,490,000.

And so there isn't a real moral imperative

to clean this business up, you know?

If a billionaire gets ripped off slightly, there aren't going to be

many people crying about it over their cornflakes.

£1,500,000.

Last chance, selling at...

And it is indeed a murky old game.

We start the bidding at 1.5.

1.6, 1.7 already. 1,700,000.

So, here's my next paradoxical piece of advice.

At 2 million, then, are we all done?

The art that goes up in value

is produced by a small group of artists.

Collectors compete to own them, and so prices rise.

This is a big one.

We have three auctions taking place this week alone.

The Peter Doig is sort of the marquee painting of the week.

It's the one that really defines the kinds of things we're trying to do.

Now, the principle here is the opposite to that which you would

normally follow in capitalism.

Don't look for the bargain.

It often pays to pay over the odds.

The market today where works are most in demand

and where price rises are highest is the so-called trophy market.

This is a big investment at £9 million,

but I personally believe that is a great investment,

because Peter Doig is an artist who is now firmly established in art history.

He's somebody who I think defines his time.

Peter Doig is a great example of how you can go

from being a 1,000 artist to an 11 million artist.

It's completely abstract up close, but when you come further back,

the view comes into reality.

In the past 25 years, he...you know,

getting a good US dealer, having Charles Saatchi interested in him,

selling a work to the Museum of Modern Art in New York,

being in the Whitney Biennial...

I was completely drawn to this.

This one little area of blue here.

The apotheosis of Peter Doig was selling at an auction

full of Russians in 2006,

when the Russians were very much a part of the market,

and suddenly he's worth, you know, 11 million.

Little bits of gloss,

which is created by a medium.

A medium in the paint. Which comes across like the sap in the tree.

I always think it's best to buy quality over quantity.

So if you've got a budget of, say, £15 million,

I'd rather buy two amazing paintings than buy 15 average paintings.

And here, you know you're buying one of the best there is.

The wealth in the world is just beyond our...

I mean, I'm personally not in the league, but I advise people who are.

Would you care for a glass of Champagne, sir?

I mean, I remember somebody in Russia and he said to me, he said,

"Philip, come and have a look in my drawing room,

"I'd like to show you my room," and he said,

"Over there there's a five, a ten, a 20, a five and a three."

And he went, "Look around the room," and I wondered what on earth we were talking about.

And suddenly you are then trying to work out whether it was thousands,

hundreds of thousands or millions.

And then I realised that he liked to describe his pictures by millions.

"That's a five million, that's a 20 million, that's a three million."

And people are buying art because of ego,

because they see their biggest competitor buying art

and they want to spend more and show that they can be more macho.

And that's one of the reasons why some world-record prices are paid.

We will always see that power play come in.

There's been a lot of talk in recent years about how daftly expensive

contemporary art is.

"You can buy a masterpiece from the past for half the price

"of a Basquiat," they say.

"That proves how inflated the market is, rah, rah, rah."

Nonsense. Contemporary art, rest assured,

has been daftly expensive at certain times before.

In their own day, Turners cost as much as Titians.

What he's painting is the Thames at Richmond, from Richmond Hill,

dressed up as a French landscape

with a few dancing figures in the middle ground.

He put a price of 300 guineas on this when it was offered for sale

at the Royal Academy.

Around the same time, the Titian Noli Me Tangere

was sold at auction for 330 guineas,

so the level that Turner seemed to be pricing himself on

is at the level of a huge masterpiece.

Quite extraordinary.

It happened in late Georgian England,

when Benjamin West was priced above Leonardo.

It happened in Victorian London and Victorian Paris.

In Paris, by 1890, Millais and Meissonier

had been priced up to the level of ten Michelangelos,

taking the base price there,

the £2,000 that was paid by the National Gallery in 1868

for Michelangelo's Entombment.

You get what you pay for.

Don't be a cheapskate!

Now, listening to this,

you might think that if you should pay a lot for trophy works of art,

that would mean buying the rarest of masterpieces.

But that is not quite how the art market works.

This is a work of art by the Chinese contemporary artist Ai Weiwei,

perhaps the most famous artist in the world.

It consists of millions of handmade porcelain sunflower seeds

and has been described as a work about craft and individualism.

For this auction, we've tried to bring together a group of Ai Weiweis

and we have a watermelon ceramic,

we have a Coca-Cola vase...

Next, the Coca-Cola vase.

200,000.

Somebody jumping in here?

And we have this, the Grapes.

The price point here is £350,000 to £450,000.

£350,000 for the Ai Weiwei stools, 350,000 I'm selling.

380 will be next.

Ai Weiwei makes what the art world calls "series of works".

These watermelons follow the Chinese tradition

of mimicking organic forms.

The bicycles nostalgically celebrate

the popular form of transport under communism.

Here, he applies principles of geometry and abstraction

to traditional vases and stools.

He has made different kinds of amalgamations of different kinds of

historical furniture and there are four or five pieces in the Royal

Academy show. One that's not dissimilar to this.

Ironically, another one is up the road at Sotheby's.

When Francis says he has "made", that's slightly misleading.

Like other contemporary artists who make series of works,

Ai Weiwei has a large studio with scores of assistants

and sometimes hundreds of craftsmen who make the art for him.

It is an interesting thing, it's sort of the Andy Warhol question,

you know? People always said, so many works, how can they hold their value?

And actually, it's the fact these works have been spread

all over the world now

and collectors can see them everywhere

and in their friends' homes, that's actually made them more valuable.

One misconception you may have about collecting is that you should buy

something unique that has been made by the artist's hand.

Isn't that what makes art so valuable?

Well, art collectors and market analysts say...not necessarily.

One of the strengths of Damien Hirst's series

of dots and spin paintings

is that most self-respecting collectors would expect to hold

at least one of those works in their vestibule

or in their living room, and it would be

almost a rite of passage into the contemporary art world.

Some market analysts foolishly suggest that the repetitive artist

whose assistants make the work is a new and temporary phenomenon.

But once again, plus ca change.

Canaletto set up practice here in Britain in 1746

and was as successful as he had been in his many years at Venice.

It's astonishing how well planned,

what a clever businessman Canaletto was and how popular he was.

During his stay in Britain, Canaletto was very active

and very prolific, coming on to nearly 100 pictures

painted over nine years, which, you know, some of those canvases

are pretty big things.

It was to some extent almost an assembly-line attitude.

Yes, you have a master, in our case, Canaletto, who has the vision,

who creates the ideas behind the picture,

and there is an agenda in every Canaletto picture,

they are not just pretty views.

But to achieve this,

particularly to achieve the vast numbers of canvases that Canaletto

created, of course, you need a studio behind you.

And the same had happened for the past two centuries going back before.

A lot of the characters we see from canvas to canvas

are actually the same people.

He has a stock cast of characters he re-employs in lots of his pictures.

It's not the Hollywood depiction of the great tortured artist

who is creating everything on his or her own.

Really, art practice in the 18th and 19th century,

particularly, say, in the mid 18th century,

was a collaborative one.

Oddly enough, I think we are in certain circumstances in the 20th

and 21st centuries returning to that idea of 18th-century practice.

So the workshops of people like Jeff Koons, Damien Hirst and so forth

are very similar to the workshops of Canaletto.

As a banker, you will recognise a potential problem

with the market which favours production-line art.

It's easy for mass production to become overproduction

and then for supply to outstrip demand.

How do you protect yourself against that?

The advice you usually hear from the art world is to focus

on just a few artists and buy their work in depth.

Sometimes, one...

can have a very big windfall in the sense there will be

one particular artist you bought several years ago

and suddenly the value rises considerably, and you are sitting on

what would potentially be a big profit.

David Roberts is a property developer,

thought to be worth over £150 million.

He has his own private museum in London.

I collect primarily because I like the art and I love the art.

And I very, very rarely sell anything.

There's over 2,000 works of art in the collection.

I can't imagine I've probably sold more than 15 or 20 things

in my life, so it's not a big part of what I do.

But buying art is not so very different

from investing in stocks and shares.

The art market is unpredictable and volatile.

You know, I always tell collectors to figure out

what their throwaway number is.

One million and one, one million and two already...

Is it 25,000, is it 10,000?

At what point are you going to not care if nothing ever happens to it?

For some people, it's 1 million.

Three million, one. Three million, two.

Three million, three.

People look at these auction prices and say,

"Well, if you bought a Picasso,

"it compounded at 12% a year for 80 years."

But if you bought five other paintings by people who are not Picasso,

at that period in 1935,

you wouldn't have earned 12% on the whole group of them.

Only on the Picasso.

Thank you.

Listening to this, you might be thinking, right,

so I have to make sure I buy the Picasso and not the other five guys.

Or girls.

Wrong! The answer is, don't stop at five.

It's random, because I have bought works by many, many artists

that were meant to be the next hot thing.

Or artists who have become the hot thing

and then it's tailed off and gone downhill slightly.

Look, it's the psychology.

If you buy a painting and instead of going

to do something else with your life,

you buy this picture and you hang it on the wall and you're checking the

prices and you see them going down,

going to be hard not to like it less and less.

But as the price goes up, then, you're so smart, "Oh, I'm so great,

"I have a great eye, I've figured it out, I'm so clever!"

7,750,000, 8 million.

8,250,000...

Even the biggest and most experienced art dealers

have lost money - a lot of money -

on some of the work they have collected.

15 million, five. 16 million.

We've been in this market now for 15 years. Of all the deals we've done,

we've made money on 97% of the art, we've lost money on 3%.

To give you an idea of an artist we've lost money on,

it was a Chinese contemporary artist where we thought we were being

very clever and going in alongside two or three of the major

US and UK and Chinese galleries into that particular artist.

We invested into three works of art at around 200,000 each.

One we sold for 220, the other sold for 180, so we lost 20,000,

and the other we sold for 50,000, so we lost 75%.

That is exactly the bid I wanted to see.

And that's 642. Thank you.

So, successful investors,

instead of concentrating on a few artists, spread their risk.

When I go forward in my collecting,

I always try to swing very hard

and I try to hit the ball out of the park.

I might miss, but I have big eyes and big ambition.

And that didn't make me right.

I ended up buying a lot of things that no-one else wanted.

But often in any collection that I've seen, including my own,

of let's say, 50 things, two or three things shoot the moon.

Ultimately that makes up for the rest.

If you throw an enormous fishing net out and you catch everything,

whether you are looking for the good stuff or not,

it's going to be there and the rest you can just chuck back.

It doesn't matter.

Tonight, there is an opening at the Lisson,

one of the world's most revered art galleries.

In the 1970s, it pioneered the new work of minimalists and conceptualists.

It has furthered the careers of million-dollar art stars,

but it has also shown many others who are almost forgotten today.

Some of it's worthless,

some of it has just kept up with inflation

and some of it's priceless.

If you'd been collecting from the Lisson for 50 years and had spread

your risk, you could have an impressive return.

If you put the sum total of all the works the Lisson Gallery has sold

over the last nearly five decades...

..it probably runs to 1 billion or more,

and if you put that all together,

hypothetically, and there was the mother of auctions, of all of it,

you would see probably about 20 or 30 billion back.

One of the newest trends in the art world is the emergence

of a new generation of abstract artists.

Like many other dealers and collectors,

Kenny Schachter has bought into some of them.

I have these paintings by Lucien Smith

and I very much stand behind them and like them as art.

He must have been around 23 or 24 when he was creating

this series of works called Rain Paintings,

of which these two paintings are part of.

What he did was find the way to compress paint

into a fire extinguisher and then literally squirt them out

over canvases.

These are two small iterations of the works.

But let's say he has made about 300 of them of various sizes.

Sometimes the colours vary only slightly to blue, yellow or black,

and his first paintings that came to auction when he was in his 20s

zoomed right up to 400,000.

Since then they've taken a rather precipitous drop

along with many of the other practitioners of this kind of work.

I mean, I think these are attractive.

They pleasantly fit in between these curtains in my house.

I bought them about two years ago.

I paid 130,000 for the pair of these paintings.

And today I would say they are worth around...

8,000-10,000 a painting.

You can't win them all.

But wisely, Lucien Smith was not the only new abstract painter

that Schachter had been buying.

This is a work of a 42-year-old American artist, Joe Bradley.

I began working with him in around 2001-2002,

an abstract painter and he also did some performance work.

He had a band called Cheeseburger,

in which he was as sloppy at singing as this painting looks.

So I can understand as a layperson, or someone not involved

in the day-to-day goings-on of the art world,

and you come and you see a painting like this and it's not even

a situation of someone to say, "Oh, my kid could do a better job than this."

This is worse.

You have to remember, artists constantly have to wrestle

with these issues, how do you address a white canvas?

And how do you do something new that hasn't been done before?

The marks are exquisite, the way the surface of the canvas,

all of these little creases

and the way they are not stretched perfectly,

it's sort of striving for imperfection and finding the beauty

in the ugly-fication of painting.

I remember first seeing his paintings and I was drawn to

what I call "good bad art".

There was something so wrong about them that I felt compelled

to get involved with this artist.

What lurks behind the canvas is something entirely different.

The paintings were all between 1,000-2,000

and I was the only buyer of any of the paintings.

In fact, I bought all of the paintings and still have them.

Over the course of 12 years,

the last major painting of Joe's to come at auction sold for 3 million.

If you are neither a lover or a gambler, carry on.

It's not for you.

Now, let me assume a few things again.

You have become an established collector

with over 50 works of art in your collection.

People know you in the art world and auction rooms.

You have your own storage facility for all the stuff you have bought

that doesn't fit into your luxury penthouse or on your yacht.

It's now time to learn how to minimise the cost

of the art you have bought so far.

£8 million.

At £8 million.

There are certain aspects of today's art market which are new.

50 years ago, the world did not have a global network of tax havens

and collectors could not take advantage of the benefits they offered.

In those early days,

it was difficult to avoid the many ways art is taxed.

Living with art costs money and that price can be anywhere from 7% or 8%

to 50% in South America for value added tax.

So, if you want to import art into your home,

you either pay VAT or, in America,

you are responsible for paying sales tax.

But with the correct offshore financial planning,

you can optimise the tax position of your art collection.

You should begin by moving your art abroad,

to special tax-free lock-ups

known as free ports, located in Geneva, Luxembourg or Singapore.

Free port is a kind of nether world.

It's not really part of any country,

so if you dispatch some art to a free port in Switzerland

or Luxembourg, it hasn't really arrived in those countries,

so import duties and that kind of tax aren't payable.

If you go to the free port in Luxembourg, for example,

it looks like a massive high security prison.

It happens that the back door, or maybe the front door,

is actually in the grounds of the airport, so when goods pass into it,

they don't count as having arrived in the country itself,

so there are no import duties payable,

and it suits a lot of people to keep

their art there for quite a long time.

There is another tax advantage to offshoring your art,

this time when it comes to selling.

To benefit from it, you first need to set up

an offshore shell company or trust.

If you were to sell it to a third party,

you might have a tax bill.

You probably would have a big tax bill to pay on it.

But if you sold it to your shell company

at the price you paid for it,

you could tell the tax authority that you haven't actually made

any money, and then when the shell company sells it on...

erm, it would make the gain

and it wouldn't have to tell the tax authority.

Now, that wouldn't...be legal...

but it would be up to you to choose what you reported

to the tax authority.

Zero taxes aren't the only upside.

Holding your art offshore in a free port

means your wealth is highly portable.

The benefits of this rarely come to light, because they're all based on

privacy, but occasionally the attempts of law enforcement officers

to stop these activities shine a light on how it is done.

I mean, there's the man who just put the Picasso on his yacht

and floated away from Spain.

The Spanish police took the Picasso to Madrid under armed guard.

REPORTER SPEAKS SPANISH

It had been found on a yacht belonging to Jaime Botin,

scion of the Spanish Santander banking dynasty.

The police say Botin was trying to smuggle the picture out of Spain.

Botin says he only owned it indirectly

through a company located in the tax haven of Panama.

It seems to me like he's in his right, but they're trying to bring

it back, so the Picasso was worth, I guess,

according to the art newspaper, 30 million. Maybe more.

It's worth more than the boat.

The little thing that's hanging on this 150-foot yacht is worth more

than the boat and all the people on it.

Kind of funny. And he's trying to get the hell out of Spain

and they're trying to bring him back.

So...what was the question?

I daresay that if the authorities clamped down on money laundering

or elusive capital flows,

that would have as big an impact on the art market

as the stock market crash.

At 76 million.

Minimising the tax exposure of your collection is one side of the coin.

The other is maximising its resale value.

At 77 million. Thank you.

APPLAUSE

MUSIC: The Blue Danube by Johann Strauss II

There's a pass, so we'll break for just two minutes,

ladies and gentlemen.

The key to making your art worth totally implausible sums

is the art market's absence of rules.

There has always been a code of silence and a gentleman's agreement

within the art trade and it actually has a cultural history dating back

to the 18th century.

The feudal system was over.

The aristocracy had to figure out how to make a living,

so they started to sell off their art collections, titles and castles.

But they didn't want to make public their financial strengths,

so Christie's and Sotheby's developed a system in which

they would list a work of art as property of a lady

or property of a gentleman, but that code of secrecy was important

early on and is still maintained to this day.

Here it is. Lady's bid, she has it now.

Would you like to come in, sir?

Are you sure? Thank you for the bidding. 360 is here.

The first lot of tonight's sale, selling, then, at 360.

It is, for me, the last of the, sort of, unregulated markets out there.

In a way, it's what makes the industry exciting.

This is an industry that attracts the good, the bad and the ugly.

'I think the art market is the most opaque market of all.'

I think it suits a lot of people to keep it opaque.

I think a lot of money has been made in the art market because one person

knows something that someone else doesn't know.

We'll start the bidding at 500. 550 already. 550. 600,000 is bid.

650 in the room. That's 650 already. That's 700,000. 750.

£800,000. 850.

At 950,000.

At one million already.

APPLAUSE

You would not be able to use many of the techniques I will teach you here

on your trading floors without risking ending up in court.

But in the art market, they're common practice,

and their invention can be traced back to a handful of art dealers

of the 19th century.

Among them, Paul Durand-Ruel,

who invented the market in Impressionism.

This is Paul Durand-Ruel, who was my great-grandfather.

He was the first dealer who bought paintings on a regular basis

from the Impressionist painters,

to an extent that he went nearly bankrupt twice in his life.

And after his death, Monet said, "If he had not been there,

"we, the Impressionists, would have starved to death."

In the late 19th and early 20th centuries,

Durand-Ruel bought and sold 12,000 works of art.

His focus was on the young Impressionists,

in whose work he wisely built up a semi-monopoly.

And since this was art, not copper or oil, no-one objected.

During his life, he purchased 2,000 paintings from Renoir,

1,000 from Monet, 400 from Pissarro,

400 from Degas, 200 from Manet.

He loved the Street Singer.

Woman With A Parrot.

The Fifer.

And, slowly, he's going to try and bring the prices up

and to find new collectors.

The American James Sutton,

director of the American Art Association in New York,

asked him to organise the 1886 show in New York.

Durand-Ruel comes with more than 300 works of art.

American clients are going to finally pay good prices

for Impressionist pictures, and Europeans are going to have

a better look, or another look, on these artists

they didn't really like at first.

Pictures purchased by Durand-Ruel for a few hundred French francs

from Renoir will be sold, for example, in 1924

for more than 100,000.

Durand-Ruel's massive stake in Impressionism

allowed him to limit supply to the market

and therefore influence prices.

The economics are pretty basic -

more demand, less supply, the price goes up.

Paul Durand-Ruel really focused on a few principles,

which were quite innovative at the time.

First, he wanted to have the exclusivity of the productions

of the artists. In exchange, he would give monthly payments

so that the artists could create without the worry of finance,

but would also give all their creation to the dealer.

In that way, he was able to secure the selling prices by having

the whole production.

In today's vast art market, it would be extremely risky

for a new collector to try to follow Durand-Ruel's example

and stockpile new artists no-one else was interested in.

So collectors today have found a safer way to play the game -

by stockpiling already established artists.

Now, there are collectors who...

..are investors.

The Mugrabi family in New York is the best-known example.

They would bid up the price of a Warhol, or of half a dozen other

artists that they have in bulk, to protect the value

of what's in inventory. They're expected to do it.

If you have a small Warhol flower painting...

..it will go for about 1.5 million,

because one of three or four collectors

who have a number of them will bid it up to that amount.

If you own a lot of stuff, it behoves you to keep the prices up

or to support the market that you are so vested in,

so I don't think there's anything wrong with that.

At 720,000. 750 is next.

2 million. 2 million, 1.

Who shouts? Who'd like to bid back there?

Now, before we move on,

there's time for some advanced bidding-up techniques.

8 million, 5. 9 million. 9 million, 5.

10 million. 10 million, 5.

11 million.

Why not try to form alliances - let's not say the word "collude" -

with collectors who are buying the same artist as yourself?

Lady's bid 300,000. Give me 320.

'If a piece is coming up at auction, it's easy enough,

'if I'm selling a painting,'

to have two of my friends in the audience,

bidding up the price of the painting to an artificially high number,

and once you've hit the number of 400,

and if I hold 20 or 30 rain paintings

and the first one goes for 400,

you can understand the notion that everyone piles in

and chucks them into the market and then people participate

on the prices going up.

110 is here. 111. Jump in if you'd like it. 120, 130...

You might not even have to spend your own money

to maintain the value of your art.

Cash doesn't always change hands in apparently expensive deals.

When you have property, you have deed transfers.

You actually have transactions that are set

and you can see where the property traded at.

Your shared transaction, of course, goes on the exchange

and you see a price.

In the art market, you, again, have to take what's told to you

as transaction prices with a large grain of salt,

because there can be financing terms, there can be swaps,

there can be barter. I mean, lots of things can happen

that actually make the economic value of the work

much lower than what's reported.

It's almost always, I can assure you, inflated

to what the reality is.

A market whose prices are inflated by such means is fragile.

It relies on ever-increasing demand and huge confidence in the market.

Neither of these things may last forever.

'One thing I think that people forget

'is that to make money out of art, you don't have to just buy it.

'You have to sell it.'

And that selling at the right time and for the right price

is much, much harder than people believe.

I have, I've...sat next to someone who was selling one of his works

at auction, and he's a very grown-up, very sophisticated,

smart investment banker.

And when this work came up, honestly,

I could almost hear his heart beating.

It's incredibly nerve-racking.

Never forget the risks of buying and selling art.

48,000.

Are you sure?

Publicly, the art world says that a collector should never sell

works of art they buy,

and certainly not within a few years of acquiring them.

Yes? No.

320.

There is a nasty word for this activity - flipping.

'From the collector's point of view,'

they fear to be called an art flipper...

erm, or to be blacklisted.

Selling at £370,000...

-BANGS HAMMER

-Sold.

'Not only art collector, art buyer or art speculator'

buys something in the belief that it's going to double in value.

Young artist, double in value in six months,

and they flip it and double their money,

and they think they can go on doing that again and again and again.

From the point of view of a gallery or from the point of view of the

artist, you get to know those people very fast

and they just go on your blacklist.

'It's not done to talk about it, but everybody sells,'

and I know that as a matter of fact, because I buy from those collections

who publicly say they are not selling.

Even collectors, who sometimes sell the work they have bought,

will say that you should never do it.

You know, a lot of the people who have done the best are not necessarily

going to the parties, not necessarily living the life,

but actually love what they collect,

they keep it for a lifetime and those are the things that are valued by others.

And if you look at the auction market, more and more,

those pieces that have been in private collections for decades,

the fresh material, is what sells the best.

Well...

not quite...

Adam Lindemann is responsible for two of the greatest coups

in the history of the art market.

In 2007, he auctioned this Jeff Koons sculpture

for which he had just paid around 4,000,000.

It sold for 23.

This year, he consigned this Basquiat painting to auction.

He bought it for a record price of 4.5 million in 2004.

It sold this year for 57.

I'm someone who...

You know, I keep some things, I move on with some things.

It's a moving target all the time.

6,500,000.

6,750,000.

Actually, there's no need to be ashamed as a collector of selling art for a profit.

7,000,000.

It is another time-honoured practice.

Even great dealers, like Durand-Ruel,

sold to collectors who they knew might resell the work to someone else.

In 1868, the famous British art critic, John Ruskin,

bought a painting of Napoleon for 1,000 Guineas

and then sold it 14 years later for six times the price.