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The saga of Sotheby's massive 59-ct pink diamond that sold for the second time this Spring for $71m, a $12m discount from the incomplete sale four years earlier, is a stark reminder of the fragility of the very top end of the art market. Exceptional objects have fleeting values.
The value of art and other tangible assets is also social. By that we mean, the value of any object is a product of the common sentiment that the object is important, desirable and only available through competition.
We've seen that process play itself out recently in a number of different art sales. Sotheby's most visible commentators—CEO Tad Smith and Chairman of the Fine Art division Amy Cappellazzo—both remarked last week that market could be divided into two classes of objects: those with increasingly known and predictable values and the rare few objects so desirable that there will be a buyer at almost any price.
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