We have to assume that the Wall Street Journal’s editors are familiar with the way markets work. So it is a mystery how they can build a story around a well-known and common phenomenon—the work of young artists selling for higher prices at auction than in their primary gallery—and pretend there’s a novelty here. Perhaps there’s a legitimate story in why this particular group of artists has become the focus of so much buyer demand.

One could easily write this same story about IPOs. But, in that version, the Journal would explain that price gyrations have little to do with the long-term value of the companies:

This development has sparked fears among the artists and their dealers. “If a gallery’s prices are too much a dichotomy from an auction, it can build hype too quickly,” says Richard Chang, a longtime collector on the boards of contemporary-art oriented MoMA PS1, the Whitney Museum of American Art, both in New York, and London’s Royal Academy of Arts.

“There’s nothing inherently wrong with buying at auction,” adds Mr. Chang. “What’s damaging is pushing up the prices for young artists to the point where they crash… This isn’t horse betting. You’re potentially going to damage a young person’s career.” Serious collectors might shun artists who become the target of speculation, he says. […]

The work of the millennials “is about speed, celebrating themselves, perhaps being a bit vain, and digesting a tremendous amount of information,” says Mr. Chang, who has bought art by Messrs. Ito, Ostrowski and Scott-Douglas within the past year. He avoids buying at auction, preferring to build relationships directly with galleries. […]

Meanwhile, the prices keep going up. During its recent New York show for [Lucien] Smith, which closed Friday, Skarstedt Gallery sold paintings priced at $80,000. In the past eight months, by contrast, auction houses were selling his work for $150,000 or more apiece.

The Steep Rise of the Art World’s ‘Millennials’ (Wall Street Journal)