Mr Market visits Art Basel

For the past seven years, I worked in contemporary art. Four months ago, I left galleries for a financial institution. I expected to discover a world governed by fundamentals rather than stories. Instead, I found different stories being told with greater precision.

Many people classify art as "speculation" while assuming publicly traded securities are "investments." But numerous financial assets—meme stocks, cryptocurrencies, SPACs, and even highly sought-after private companies like SpaceX—derive a substantial portion of their value from narrative, scarcity, expectations, and social coordination rather than discounted cash flows. The distinction between investing and speculation is often much blurrier than people admit.

It’s far from my conviction here to state that art as an alternative asset may prove to be safer than any of the aforementioned vehicles, although I’ve been curious about the practicality of collecting, in juxtaposition with contemporary methodologies of investment. In a nutshell–risk does not always come from whether something hangs on a wall or trades on an exchange. More likely, risk tends to be related to how prices are formed. So, if markets are irregular, and each of them follow an underlying set of logics, then why is collecting as an investment such a niche?

To provide a bit more context, in terms of the moment we’re all inhabiting to varying degrees, it’s hard to argue with the idea that everything in the planet has never moved as quick as it does now. Accelerationist philosophy (such as writing by Nick Land, Laboria Kuboniks and Armen Avenessian) feels almost like a set of predictions that continue materializing more and more every day, and markets are just a few of the examples of how speed directly influences value – and whatever might fail to catch up, will eventually dissolve.

This matter on quickness, is quite palpable in how the prices of things – from groceries to stocks – become so irregular, and adequately explains volatility in markets. The phenomenon of acceleration might – for instance – make it more difficult to follow a value-investment methodology. Benjamin Graham famously described the stock market as a business partner named Mr. Market, who offers you a different price every day. His lesson wasn't that Mr. Market was intelligent. Quite the opposite. Investors succeed by ignoring his emotional swings. But today's Mr. Market isn't merely emotional. He's algorithmically amplified. He reads Reddit before breakfast, watches TikTok during lunch, and by dinner he's repriced an entire asset class. If Mr. Market was riding a car, he’d be speeding down the highway while riding a cybertruck, rushing, because he’s late on his way to board a rocket to the moon.

If it was already difficult to beat the market, by finding securities with value and real opportunities since Graham’s time, today it might be even more complex.

As an investment vehicle – and more generally as a whole industry – art is experiencing the same thing, albeit in different ways. To make my point in the simplest way possible, let’s look at Art Fairs. You’ve probably heard of Art Basel in Miami, Frieze in London, or New York. A few years ago, these were marquee events that happened sparsely every year, and had interesting ties to the fiscal calendar of collectors who needed to liquidate some cash in order to deduce more of their income. Twenty years ago, a collector might have waited months before encountering another major opportunity to buy. Today, Basel ends, and Seoul begins. Seoul ends, and Mexico City opens. Hong Kong follows. The market scarcely pauses. Like financial markets, art has become continuous. To a lesser degree, auctions are experiencing similar things, as there used to be a couple of evening sales every year in the same cities, with new houses opening, and more “democratizing” models appearing all over.

Which takes me to a couple of interesting aspects of artworld inclusion, which are: social advantages of attending events and the potential to improve critical thinking. Unlike a corporate office, which may force one to mold his or her human individuality into a preconceived version of a worker bee, working at a museum or a gallery can deeply foster one’s sense of self. In that sense, anyone who belongs to a creative field can testify to feeling proud of their differences and reject any urgency to be part of “the crowd”. This is why social events for someone new to the field may feel so jarring, because art professionals get rewarded for being different, or at least they used to. Strangely though, the tacit advantage that attending art events may generate, are financial opportunities. If artistic events used to be more experimental and rebellious, they are starting to feel more like any other sort of corporate event.

Is finance becoming more like art, and is art trying to become more financially structured? Perhaps this is more perennial– it's often said that when bankers go to lunch, they talk about art. When artists go to lunch, they talk about money. If art as an investment continues to crystalize as a less liquid, yet alternative vehicle, how long will it take for it to gain more traction? Perhaps this is already happening, and if everything is moving quick, then maybe it’ll happen sooner rather than later.

The big advantage of acceleration, and given the amount of things happening, means that there are several artworlds, just as there are several investment vehicles. If in finance there are banks, brokerage houses, mutual funds, ETFs, Venture Capitals, and Private funds – all with their corresponding dinners and social occasions; the artworld has auction houses, galleries, public and private collections, museums biennales, fairs. Each parallel following it’s particular logic.

Just as the financial world continues to digitize and democratize, so do the arts and its markets mechanics. Think of a digital broker, a notably easier vehicle than a corporate, physical outpost in terms of inclusion and minimal investment.

Art possesses something almost no financial asset can offer: utility independent of price.You can’t hang the purchase of a stock in a wall in your house, or commission a company to build a beautiful sculpture that may appreciate in value in the hallway. Investors often ask whether art belongs in a portfolio. Perhaps the better question is why we've become comfortable allocating money to assets whose value depends on narrative, momentum, and collective belief—provided they happen to trade on an exchange—but remain skeptical of an object that can enrich our daily lives even if its market price never changes.

One analyst estimated that SpaceX's IPO implied a forward price-to-earnings ratio exceeding one hundred. Investors accepted that valuation because they believed future growth would eventually justify today's price. A Jackson Pollock purchased for $181 million (which happened this year in the May auctions in New York) makes no such promise. It produces neither earnings nor dividends. Yet the collector is making a remarkably similar judgment. He is betting that scarcity, institutional recognition, historical importance, and cultural demand will continue to compound over time. One investment discounts future cash flows. The other discounts future cultural significance. Both attempt to put a present price on an unknowable future.

Finally, there is one last big merit to which art in general deserves immense recognition, and that is, it’s ability to predict the future. I learned about AI, by reading Philip K Dick. First heard of Quantum Computing, from an artist I met during my MFA (Master’s in Fine Art), who did his dissertation on non-binary computing. Could it be possible to get ahead of greater market trends, by paying attention to artists, philosophers, and thinkers? Could it be a way to anticipate Mr. Market?

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