Jamal Mecklai: Price and value

MARKET MANIC

Many years ago, I was at the [old] Christie's showroom on Park Avenue in New York and found myself strongly drawn to a painting by Jeff Koons, somewhat below his peak at that time, but still one of the stars of the global art scene.

The painting had several basketballs bouncing around and somehow it reminded me exactly of a painting I owned by a little-known Indian artist called Abbas Batliwala. Not how it looked, but how it made me feel""the resemblance in sensitivity was uncanny. I asked the price.

It was $360,000. I gulped. I had bought the Abbas Batliwala painting for Rs 14,000 a few months before that, and, being in the foreign exchange business, I knew immediately that this price did not represent the ruling exchange rate.

It was amazing. To me, the paintings were the same""in fact, identical""certainly in terms of feeling, sense, value, if you will. But the prices were just so far apart. And I hadn't even been drinking.

I thought about this incident again a few weeks ago, when I heard that a Tyeb Mehta painting had sold at Christie's (again) for $1.6 million. And the media blared, "Taali bajao. Indian art has arrived at the million dollar club."

But, wait, I say. Is it Indian art that has arrived? Or is it just Tyeb and Husain (of course) and a few others? Does the fact that someone in New York forked over 1.6 Big Ones (or, in the local idiom, 7 big ones) for the painting confirm that this is the "value" of the Tyeb Mehta painting?

Or is that just the market price at this point in time? And, if it is "just" the market price at this time, who is to say whether it is the right price and whether it will go up or down in the future. Market prices, as we all know, can get quite extreme at various points in time.

Underlining this, I recall a market seminar recently where one of the speakers asked the audience if anyone knew the all-time peak value of Infosys. No one had a clue. On the other hand, when he asked them if they knew the all-time high price, many hands went up""and most of them knew the correct answer. Clearly, most people look at the stock market from a price""and not a value""perspective. Just as clearly, most people also lose money in the stock market. There are exceptions, of course""most notably, Mr Warren Buffett, who pioneered the concept of "value investing". Buy on value, not on price, is the commandment.

But value investing doesn't quite hold in art because most people don't buy art as an investment. They buy art because they love it. ART IS NEVER AN INVESTMENT. Art is about love, about joy, about beauty. Investment is about making money. But money has NOTHING whatsoever to do with love, with joy, with beauty.

Value in art is totally subjective""recall my story about Jeff Koons and Abbas Batliwala. No doubt, the guy who bought the Tyeb painting for $1.6 million sees it as value for money. Obviously, he could afford it, and it brought him more pleasure than alternative ways of spending $1.6 million. On the other side, let's celebrate the good fortune of whoever was able to sell the Tyeb painting""it wasn't Tyeb, by the way. But, let's not get carried away with this art as an investment thing.

In any case, the Indian art market, such as it is, is showing what I would call some classic "chanawala"""no insult intended""signs of value being swamped by price movements.

Value is a complicated word, and, with prices moving up by 300-400 per cent in a few years, who the hell cares about value! In fact, as in the equity market, few in the art world even know what value is.

Let's look at some of the chanawala events. First off, the media buzz about the art market has reached hysterical proportions with several articles on the art market in the press each day""at the same time, there are few, if any, art reviews or criticism to be found anywhere.

As a result of the buzz, dozens of people who have never bought art before are trying to set up art galleries because they believe they can make a lot of money. While I'm all for making money, people seem to believe you can make money in art without knowing anything about it.

The loudest case in point may well be Mr Srivastava, who made news some months ago, when he did a deal with the Master""Mr M F Husain""buying 100 paintings for Rs 100 crore, acknowledging all the while, at least according to press reports, that he knew nothing about [the value of] art. It would be like Narayan Murthy investing Infosys' surpluses in a chain of dance bars!

And now, completing the cycle, we have art funds. Step right up!