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Investing in art?

At Venture Club, we strive to bring interesting projects and unusual experiences to our members. We learned about how the art market works, when to include art in our portfolio, and how we can influence the price of a piece of art from a visit to Joe Muczka Jr.’s painting studio from his brother, Mark Muczka.

While the name Muczka may be new to you, don’t be fooled. They are an ideal duo, with Marek Muczka handling sales and marketing, while his brother Joe Muczka Jr. paints in his studio the works that now adorn interior walls, gold bricks, and office building floors. Both brothers do what they do best. Their entire project deals successfully with only one artist. Mark Muczka has become an art dealer, or as he puts it, a motif dealer. He gives a new dimension to his brother’s paintings and thanks to him you can see the motifs of Joe’s paintings on sofas, cars or aquatics. But let’s get down to the subject itself.

When and how to invest in art?

If you only look at art as an investment, don’t look at whether or not you like the work. As in any other business, emotions should not influence your rational reasons. Normally, people consider whether they like an item, figure out the price, and judge whether they can afford it. Decide whether you are buying the painting for its appearance and are comfortable with its possible loss of value, or if you expect to make a profit in the future. Why? Imagine time travel. The beginning of the century – you are in Paris and a young artist is painting very strange canvases for his time: distorted figures with each eye placed elsewhere, still lifes with broken objects. Would you buy his work? With today’s knowledge, probably yes, but without it? If we answer no, no wonder, we would still make a mistake. Picasso’s painting Algerian Women was auctioned at Christie’s in New York in May 2015 for $179.4 million, or about $4.4 billion. Emotions don’t really mix well with business. People also don’t choose conservative funds or building societies because they think of it as an emotional investment. But they are looking for reliability and believe in their value. They make decisions rationally, not based on emotion.

How to sell art

Art investing, otherwise known as Art investment, is simply a craft like any other. It’s an investment in value, where we consider first who the artist is, how they used to create, when the work was created. Unfortunately, this is not enough. If the artist were to give up being an artist and start working as a waiter, for example, the value of his work would very likely only diminish. With the right investment, the artist should continue to work and continue to create. This is one of the things that builds his value.
Another important aspect is who sells the artist. Does the artist also take care of the sale, or does he have an agent or gallery? How does it usually work? Usually the gallery represents several artists and who makes the money is mainly the gallerist. Most galleries don’t work and have multiple artists, they cover their costs better. However, it is certainly not realistic to cater for all 20 artists equally. So the brothers thought: we want to build value faster and find a way to appreciate the investment sooner than decades from now. It turns out that a monothematic concept is better for everyone: the investors, the painter and his impresario (painting dealer). So an agency was created, building on the past, working on the present and planning the future of a single artist: AuroGenio.

Where “values” are created in art

One of the criteria is notoriety. Is it already the whole city or perhaps everyone in the country? A few hundred people are certainly not enough, which is why artists also need to worry about PR and advertising. Even the artist and his work are products that need their own communication. It is best if the investor himself helps to spread the knowledge about his painting. Another aspect that creates the value of a painting is the number of exhibitions and the number of sales of the work, in whatever form. The more people know the artist, the more it rises in value. Of course, an important criterion is what the artist has done, is doing today, and what his plans are for the future. If we know all this and are satisfied with the answers, we can invest.

Communication is essential. Today, thanks to Mark’s work, thousands of people in the Czech Republic, Germany, Slovakia, Russia and other countries know Joe Muczek Jr. Although almost any artist can be pulled off artificially by good marketing, it has always been and still is true: if a good story and a talented artist (as here) is caught and promoted, his value grows and, more importantly, he is retained. The investment is further helped by the state of free pricing in the arts. If there is interest, the agency can help drive the price up. Whoever owns the rights and licenses can promote the artist’s story – ideally while the artist is still alive. Ideally, they should do it with their heart too, not just as a business, and they should have your trust.

A drawing, a limited edition, a print or an original canvas?

The smaller the number of pieces in the work and the higher the uniqueness of the motif, the higher the price. But is that the whole truth? As all versions and price ranges sell, the familiarity of the work increases. Both the owner of the original (there is only one) and the owner of the motif who has acquired an affordable alternative are satisfied. And it can be in the form of a mintage on precious metal, an investment coin, or the execution of the motif on the wall or floor of a representative space.
The investment, whatever it may be, must not be too large to destroy your portfolio. You should be advised by an expert, when buying and, more importantly, later, when selling. Moreover, the same rule applies here as with stocks: there are suitable opportunities to sell and “less” suitable ones. Those who rush too much may end up losing a significant part of their investment. Art is a long-term affair.

What to say in conclusion?

It all starts with information – go to events. Having information is the most important thing. Only then can you responsibly and competently move a portion of your portfolio into art. If you want to, get in touch. The Muczek brothers have a suitable project and you can meet us, for example, in their exhibition space in Benešovská Street, Prague.
Have a great time and we look forward to seeing you at the next in our series of meetings, perhaps as soon as May 23rd (Kuba – a poor bride with problems and a bright future) or June 6th (Benewitz Quartet).
Petr Šedivý

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