Art Critic



Contact: Capucine Price


Put Your Assets on the Wall™

How Buying What You Love Can Get You the Return You Need

By Capucine Price



“Put Your Assets on the Wall™” details art’s unique history as an alternative for growing and preserving wealth. 


Today, art inspires a significantly higher degree of confidence than many of the nearest AAA-rated financial instruments.


“Put Your Assets on the Wall™” is a must read for anyone who is grappling with the quandary of how to invest in an era witnessing the ongoing dramatic decline in fortunes of traditional investments.  “Put Your Assets on the Wall” presents the timely analysis that demonstrates art’s superior investment performance during inflationary and other periods of financial upheaval throughout history. If investment methodology has one fundamental truth to tell, it is that proper asset allocation is the most important single investment decision an investor can make.  


In the midst of the current financial crisis, it’s clear that most savers and investors are overweighted in equities, despite recent experiences of the highest levels of volatility ever recorded. It may seem strange that a 14-year veteran small-cap value fund manager would say that, but in “Put Your Assets on the Wall™” Capucine Price uses the metrics of traditional investments to teach people about art as an alternative asset class, and a way to diversify one’s portfolio and hedge against volatility. 


In “Put Your Assets on the Wall,” former small cap value investor turned art entrepreneur Capucine Price helps people to gain an understanding of: 


Strategies to optimize portfolio performance

The role of alternative assets in a portfolio

How to inveset regardless of portfolio size

Why less expensive art outperforms




The writer is a veteran portfolio manager, co-owner of, and the author of “Put Your Assets on the Wall.” The author applies her background and expertise in investment management, specifically in small capitalization value stocks, to the world of art. Before heading into cyberspace, Capucine helped spearhead William Blair & Co.’s development of a value investment discipline and related products for institutional and mutual fund investors. 







“Your currency is likely to become my problem” Former Chinese Vice Premier Zeng Peiyan in a speech, July, 2009


The list of shaky, dollar holding creditor nations continues to grow.  Surplus countries like Russia, China, Kuwait, Brazil, Switzerland, and as of July, India, are openly revealing their intention to diversify their nations’ currency reserves out of the U.S. dollar, in light of the U.S.’ rapid accumulation of debt in just the past six months.  “The major part of Indian reserves are in dollars – that is something that’s a problem for us.” (Suresh Tendulkar, Chair of India’s Economic Advisory Council, July, 2009)


Meanwhile, the S&P 500 stock Index is now trading at a record P/E ratio in the 120’s, not only because of a run up in stock prices over the past few months, but because of a dramatic diminution of corporate earnings. Emphasize dramatic. What accounts for the fall? Well, when spending by consumers accounts for 2/3 of a nation’s economy and those people suffer not only declines in the value of their homes, their largest asset, but also rising levels of joblessness, that spending can come to a sudden stop, as it has in the U.S. Given the fundamental source of the spending reduction, it would be foolish to expect a resumption in anywhere near the short-term. 


As a result, the majority of businesses are unable to reliably forecast a return to former levels of sales and profitability, meaning that these reduced levels of corporate earnings are neither one-time nor short-term, and in most cases, changes in corporate strategy won’t solve the problem. Instead, corporate leaders will address earnings shortfalls with more layoffs, compounding the spending and production conundrum,  further elevating the price/earnings ratio,  and rendering the datapoint even more irrelevant as a way to gauge value. 


As unattractive as current bank rates of return are, the stock market by comparison is today loaded with unacknowledged risks.  Tangible assets like art are far more transparent with a degree of stability that many financial institutions, and even some AAA-rated government debt, can only dream about.


Damien Hirst’s Sotheby’s Auction Begins the Unwinding of the Hegemonic Gallery/Dealer SystemArt, The Safety and Beauty of Real, Tangible Assets

“Non-financial assets form the greater part of world wealth and have been more stable in value during periods of financial and social turbulence.” – Roger Ibbotson and Gary Brinson, “Global Investing”  

Between September 15th and 17th, Wall Street and world financial markets were turned on their heads as 158 year-old investment bank Lehman Brothers filed for bankruptcy, followed by the Fed’s rescue of the insurance behemoth AIG. Credit markets seized up, stock markets plummeted and gold dramatically reversed its weeks-long downward movement. 

However, it was obvious that no one had though to inform art lovers as concurrent with the carnage on Wall Street, the artist Damien Hirst was busy staging a record auction of work by a single artist, selling $200.7 million of his most recent work at Sotheby’s. The game-changing auction of 223 original pieces of art has effectively changed the rules of the game, permitting an art lover to simply walk in off the street, without having to demonstrate their ‘seriousness’ to a dealer or gallery-owner, bid for a piece of original art and become its owner. Requirement: money. Not required: proper referrals, lineage, documentation of existing portfolio, etc. 

Not only did the sale highlight the juxtaposition between those assets with value (the visual and tangibly creative) and those woefully lacking it (creative financial instruments), but it signals a sea change in the way that artists view their options, as well as the volume of work from which the public can now choose. And in that sense it marks a seismic shift toward a newly democratic artworld. 

The wildly successful auction at which all but five pieces sold marked the first time that original artwork was auctioned without having passed through either a gallery or dealer’s hands. With the increased number of venues for marketing and selling artwork, the argument against consigning art first to high-cost (50% or higher) brick-and-mortar galleries and dealers has acquired a new solidity. 

Poverty is not the cost of respect in any other industry or endeavor, however, it has seemingly been inculcated as such within the realm of art. 

Hirst himself refers to the 50% cut taken by galleries as “an extortionate amount of money.”

When Claude Monet hosted the first exhibition open to the public of Impressionist artwork in the 1800’s, in effect circumventing the prevailing juried system, it’s unlikely there were very many cheers from the establishment. However, the exhibition held on the Boulevard des Capucines undoubtedly altered the way that artists’ sold their work.

Under the dealer/gallery system, a romantic notion was repeated often enough and allowed to codify as a truth, i.e. that artists must suffer to produce good art and that any state other than perpetual poverty for an artist translated to ‘selling out.’ Not in any other creative or sports-related endeavor does this fiction exist, and it has survived only because of the prevailing inefficient sales and management structure under which the levers of power were tilted in favor of distributors instead of producers.

In the end, no industry is spared the power of the market – all are eventually mean-reverting. Hirst’s auction represents quite a few miles logged on the road to reversion.




“Non-financial assets form the greater part of world wealth and have been more stable in value during periods of financial and social turbulence.”     Roger Ibbotson and Gary Brinson, “Global Investing”

The devolution of confidence in traditional investment alternatives, in concert with the elevation of the importance of design and aesthetic throughout the world, points to a renaissance in the value of art to a degree never before witnessed.

After all, the art auction market is fair and transparent with a degree of stability that many financial institutions, and even some AAA-rated U.S. government debt, can only dream about. 

“The main contributor to both absolute total returns and to the variance of total returns was the asset allocation policy decision.” ( Global Investing: The Professional’s Guide to the World Capital Markets, Roger G. Ibbotson and Gary Brinson

Even absent the conditions present in the market today, making the deliberate decision to remain in the stock market inherently implies acceptance of a degree of risk. In that case then the decision should be made to diversify with the inclusion into the portfolio of assets which have no or little correlation with that of the market, in order to minimize risk and maximize return potential. 

As a real and tangible versus a monetary asset, art’s low correlation with the stock and bond markets makes it an excellent diversification vehicle, enabling reduction in overall portfolio risk. 

A key study examining the returns of 82 large pension portfolios by Gary Brinson, Brian Singer, and Gilbert Beebower uncovered that over 91% of the variance of returns is attributable to the asset allocation policy decision, rather than specific stock or bond selection decisions. (Gary P. Brinson, Brian D. Singer, and Gilbert L. Beebower, “Determinants of Portfolio Performance II: An Update,” Financial Analysis Journal, May/June 1991.)  

Therefore, the research data argue persuasively that allocating a portion of all investment portfolios to art as an investment class is as imperative as the very decision to employ an investment policy. It shows that for an investor with the twin goals of preserving wealth and growing capital, with today’s market conditions, history points to the capital preservation and return superiority of art.

Hence, it doesn’t matter what genre of art is selected, what matters most is the policy decision for its inclusion.  This study therefore highlights the importance of the investment policy with a clear implication for the Art market.  Why not apply the respected and proven paradigm of the investment world as it relates to financial assets, to the real, tangible asset that is Art?

Art’s status as a store of wealth is undeniable by historical standards. 

Under the old paradigm, one would observe that with a buoyant art market in large part due to exuberant participation of buyers from a single industry, that with the sudden ill fortunes of that industry, would necessarily mean at lease the near-term deceleration of the art market. Not so this time.  The growth of the current art market is traceable not simply to a single industry or even a single continent, but to a hitherto unseen confluence of global wealth and acquisitive desire.

It has been an incredible year for contemporary and modern art. Christie’s and Sotheby’s together posted record sales over $12 billion. Despite all the economic travails discussed in these posts, art has been one of the only asset classes that has continued to outperform and bring an important degree of diversification to owners’ portfolios. If you consider the fact that the 10-year inflation-adjusted return of the benchmark S&P 500 has actually been negative,  that real estate can no longer be considered an asset upon which to retire, and, finally, the inflation which will only continue to ravage real returns, the choice for art becomes clear. 

Capucine Price

September, 2008


“Non-financial assets form the greater part of world wealth and have been more stable in value during periods of financial and social turbulence.”     Roger Ibbotson and Gary Brinson, “Global Investing”

The devolution of confidence in traditional investment alternatives, in concert with the elevation of the importance of design and aesthetic throughout the world, points to a renaissance in the value of art to a degree never before witnessed.

After all, the art auction market is fair and transparent with a degree of stability that many financial institutions, and even some AAA-rated U.S. government debt, can only dream about. 

Foreign Investors Reducing Their Exposure to the Dollar

Because sovereign wealth funds have begun to more aggressively reduce their exposure to the dollar.  With over $3 trillion in investable assets, Foreign governments already own a whopping $1 trillion of Fannie and Freddie debt. Having watched as their investments in faltering U.S. banks such as Citibank (down 71% past 12-months) have cost them huge losses, Gulf state funds as well as China’s primary investment fund (SAFE) are increasingly diversifying out of dollar assets. China’s State Administration of Foreign Exchange (SAFE), which holds most of China’s $1.8 trillion in foreign currency reserves in dollar-denominated investments, is evaluating investments outside of the U.S. Their move follows moves by Kuwait which cut its ties to the dollar in 2007 and their statements this week that they will not buy any additional Fannie or Freddie debt, and Singapore which has also reduced its exposure after watching its $5 billion stake in Merrill Lynch fall by almost 40% so far. The $200 billion in funds managed by the China Investment Corporation have taken huge negative hits as a result of their $3 billion investment in Blackstone Group in 2007 followed by their $5 billion in Morgan Stanley earlier this year. 

The largest sovereign wealth fund, the Abu Dhabi Investment Authority, is growing increasingly sensitive as its population shoulders the pain of inflation imported as a result of the countries’ tie to the dollar. And while the desire to diversify currency exposure is gaining strength, most sovereign funds, due to their own significant dollar holdings,  are concerned with doing so in a measured way that is unlikely to cause an accelerated dollar plunge. 

What is left then for those banks and investment banks in need of capital infusions, who don’t have the benefit of being Government Sponsored Entities, and can no longer rely on sovereign wealth funds to lend a hand? They, like Merrill Lynch announced this week, are reduced to selling assets. Having raised $15 billion in capital year-to-date from hedge and sovereign funds from Singapore, Thailand, Kuwait, and South Korea, the investment bank announced that it will sell its stake in Bloomberg.

Foreign investors currently hold around $2.6 trillion of U.S. Treasury Securities. Unfortunately, foreign investors’ questions about the strength of our assets don’t end with Fannie and Freddie. A clear indication of this latest statement comes in the form of credit insurance costs for AAA-rated U.S. Treasuries which in July rose to 16-20 basis points, higher than other nations for the first time ever. 

If the country is called upon to write the check to Fannie and Freddie, our increased debt burden will only serve to call into further question the health and reliability of the dollar, which exacerbates oil and food price inflation, and further threatens the dollar in an endless, macabre loop. 


Capucine Price


August, 2008


A new era of value equality is unfolding among the worlds’ artists. In the case of the price differential between the work of the contemporary ‘art stars’ and emerging artists, consider for a moment an important influencing factor also found in the stock market: uncertainty. For instance, a company operating in an industry where a key competitor suddenly becomes the subject of an investigation will undoubtedly see its stock price at least temporarily negatively impacted regardless of culpability simply because of investor uncertainty. Lack of knowledge in any industry acts as a damper on value, and let’s face it, the famous are such because to date they’ve received the entirety of the spotlight from the art market apparatchik, hence relatively little is known about those without such support.


However, the internet is THE equalizing factor. In an era where the internet functions as the facilitator of the distribution and promotion of the work of emerging artists from all over the world, the era of the ‘art star’ deemed such by the critics, curators and self-appointed art experts has come to a necessary end. 


In order to assess value and predict the direction of prices with respect to any asset, including stocks, it’s instructive to look at comparables. The work of the Old Masters and other dead artists has stood the test of time thus guaranteeing its worth in the form of the stratospheric prices garnered today. What is less clear is the rationale for the difference between the prices paid for the work of many contemporary artists and the much larger group of emerging artists. In any other industry, over time such a relative value disparity would disappear. 


Given the increasing recognition of the value of art today, equalization of the prices between discovered and undiscovered artists is inevitable if only because the relative value of the latter is highlighted. In the case of two stocks with equal earnings generating power where the sole exogenous, differentiating factor is the amount of ‘coverage’ by Wall Street that each receives, the difference in price to the long-term investor highlights the less expensive as a powerful value, and the common sense choice. Yes, the value stock may lack the imprematur of the big Wall Street analysts, but how many times have they overlooked a diamond covered in coal dust? Emerging artists are the greatest investment opportunity that no one has ever heard of.


 The traditional path to art world notoriety has usually included art school followed by showings in galleries, and being noticed and collected by well-known art patrons and eventually museums, with the accompanying media attention to keep it all going. Urban art has by all accounts turned this system on its head and instead of artists praying to start out in galleries they are finding their audience first, literally, out in the open, on the street.  From there, with the masses telegraphing their preferences via the internet, the attention-getting artwork then moves into the galleries. 


Artists’ long-held frustration at often not being able to have their work seen in galleries has, in the case of Urban Art, found an outlet in having unlimited audiences able to view their art, thus propelling it into the galleries.  In February, 2008 when Bono’s Red auction was held in New York it was Banksy’s work that set new price records even in the rarified company of work from some of the art world’s most lauded producers.  The Tate Modern in London, the world’s most visited Modern Art Museum,  in May hosted ‘Street Art,’ an exhibition during which an entire side of its building was utilized by Urban artists.  


As accessibility has driven the meteoric rise of Urban Art sales worldwide, the availability of emerging artists’ work on facilitating mechanism that is the internet will eventually yield the same trajectory.