The news outlets have predictably only looked at the top lots and the overall sale totals before declaring the May Impressionist and Modern art sales in New York to be disappointing. Without the big numbers, it would seem, the art market as spectator sport has little value in drawing readers.
Michael Moses issued a press release today declaring the Impressionist and Modern sales from last week to be stronger than last November simply on the basis of resale returns when the Compound Annual Returns were 10.2% and the average holding time was 13 years:
The two evening sales this week have been reported in the press as being below expectation with total sales less than those generated in November 2010. However from a financial returns perspective the results were quite strong. We have repeat sale data on over 1/3 of the lots that sold and the average of their compound annual returns (CAR) of these 31 lots was a strong 11.2% with an average holding period of 15.7 years. This strength is documented when these returns are compared to the returns that would have been achieved if the purchasers would have invested instead in the S&P 500 Total Return index (where dividends are reinvested tax free) for the same holding dates as the art. The average CAR for the S&P investments would have been only 5.8%.
Mei Moses Analysis of May 2011 Imp-Mod Sales