In Tough Times, Invest in the Classics

They say that, in uncertain times, small-time investors should stick to what they know—which is great if your hobby happens to be credit default swaps and windmill technology. But what about the poor sods (there are a few of us out there) who get their jollies poring over obscure pictures by long-dead artists? It turns out we might just be on to a good thing.

Last week in New York, the Metropolitan Museum opened a show about Perino del Vaga, a Renaissance master who was one of Raphael’s chief pupils and, in his own day, one of the most famous artists around. The exhibition celebrates Perino’s gorgeous Holy Family, almost 500 years old, that the Met nabbed at a Sotheby’s auction last winter for a paltry $2 million. If that sounds like real money, consider that someone recently paid four times that much for a Nurse painting by Richard Prince that isn’t even a decade old.

Andrew Butterfield, a New York art dealer and expert, says that even at $2 million, which was a record price for a Perino, the Met’s Holy Family was “a very good purchase—he’s a major painter, and there are very few paintings by him.” And unlike more recent artists, he says, Perino’s stock is unlikely to suddenly fall. Can anyone say that about Peter Doig or Neo Rauch, current art-market favorites?

If the Sotheby’s auction had gone differently—you could feel the excitement when the Perino came up—the Met could have spent as little as $300,000, the low estimate. That would be about what some recent Yale and Columbia graduates can see their works go for—and what some surgeons pay for a powerboat.

At the Sotheby’s sale, the Perino was keeping company with plenty of centuries-old works going for less than $10,000, including a charming relief of Apollo, carved by an anonymous Netherlandish artist in about 1650, that went for $5,000—the kind of investment even an art critic might manage. “If people can’t attach a name to it, for whatever reason, then you’re getting significantly better value, in terms of an experience,” says Butterfield. “You can be a pioneer in this area,” he says, whereas the market for a figure like Warhol is so clogged that a bargain is vastly unlikely.

David Ekserdjian, a Renaissance scholar at the University of Leicester in Britain who once worked in the art market, has a slightly more skeptical take: “I’d say two very simple things. People who buy old-master art sometimes make money out of doing so. But it’s a very bad reason for buying art.” Only a fiendish devotion to the objects themselves could ever let you choose the ones that will matter. “Just sort of deciding, ‘I’m going to collect old masters’ isn’t going to be enough.”

Nicholas Hall, one of the people in charge of old-master sales at Christie’s auction house, remembers how, just when the market for contemporary art took a bad hit at the depths of the recession in late 2009, his firm recorded its best-ever sale of old masters. Since then, he says, he knows of cases where collectors are “selling Warhol soup cans to buy old masters.”

Linda Wolk-Simon, the guest curator of the Met’s Perino show who is now at the Morgan Library, believes in old masters as a neglected opportunity, but also stresses the risks: “A pork belly is a pork belly, but someone investing in art had really better do their homework. It’s really about caveat emptor.”

But then there’s always the chance of netting a huge return on old-master art, if you’ve got an eye that lets you spot the master’s hand in an anonymous work—as Butterfield himself has done. “It’s an area in which major discoveries still float to the surface,” he says, citing the famous case where someone’s ashtray turned out to be a masterpiece by the great Renaissance sculptor Donatello. “In art, the fundamental analysis you do—like good stock analysis—is an aesthetic analysis.” Which means that if you’ve got a really excellent eye (and experience, and advisers) you might just find an ashtray that’s by Donatello.