Da Vinci no match for Satochi
Alberto Gallo, CFO put out a list of the highest risk bubble markets in the word recently. Property markets in Australia, London and Hong Kong topped the list, followed by shorting the VIX, Bitcoin, and then the FAANG stocks.
He doesn’t list high-end art, but after last night’s auction maybe he should. Christie’s egged on two anonymous bidders who participated via the phone and bid up one of Da Vinci’s works to $450 million. David Stockman writes that he was there and the price escalated at $333,000 per second.
Stockman lists the records broken.
the previous auction record for a Da Vinci was only $11.5 million---although in fairness, it must be noted that virtually all of his works are in museums and don't come up for sale. Still, that benchmark and the prior "Old Master" record at $76.7 million for a Peter Paul Rubens were surpassed within the first few seconds of the bidding; and soon the all-time auction record for any work of art---- $179 million for a Picasso----- also went by the wayside.
The painting is entitled Salvator Mundi or "Savior of the World." Da Vinci may not have even painted Salvator Mundi, according to some art experts. “One critic has described the surface of the painting to be "inert, varnished, lurid, scrubbed over and repainted so many times that it looks simultaneously new and old," Stockman writes.
The U.S. dollars bid for the painting are not as authentic and gold-backed as earlier versions either.
The price history of painting starts at $125 in 1958. Then 50 years later it went for $10,000. It then changed hands in 2013 for $80 million but was quickly sold to “billionaire Russian potash king, Dmitry Rybolovlev, for nearly $128 million.”
You may have heard of Rybolovlev. He bought Donald Trump’s Palm Beach oceanfront mansion called Maison de L' Amitie, providing the cash for the new president to purchase Mar-O-Logo.
After Christie’s took their $50 million cut, Rybolovlev made a smooth $272 million. Of course we don’t know who is ponying up the $500 million bid. But either way, $125 to $450 million in, let’s call it 60 years, is a compounded annual growth rate (CAGR) of 28.61%. However, $10,000 in 2008 to last night’s sales price is a more bubblicious CAGR of 228.87%.
Bloomberg’s Leonld Bershidsky doesn’t see it that way with an article entitled, “Why $450 million for this Painting isn’t Crazy.” Salvator Mundi might be the next Mona Lisa. Bershidsky explains,
It's compelling as a painting, with Christ's sharply painted blessing hand drawing a viewer's attention in the first few seconds and His misty, hypnotic gaze inevitably taking over; it's a transfixing experience. There's also enough masterfully lifelike detail to peruse once you extricate yourself from that powerful stare.
Meanwhile in another area of bubbleland, as I write cryptocurrency brand numero uno trades over $7,900. In July 2010, Bitcoin traded for 6 cents. That is a CAGR of over 595%.
So far, Da Vinci is no match for Satochi.