BEIJING, Jan. 17 -- Collectors will buy and sell more than US$20 billion of art this year, according to sales tracker Artnet AG, and many are trying to decide if they are buying their Cattelans and Picassos at the top of the market.

    "This market does remind me of the wildness of the NASDAQ boom before it ended in 2000," says Robert Harshorn Shimshak, a California radiologist who collects contemporary paintings. "I'll know it's time to sell if I start hearing art tips at my local coffee shop."

    Art prices are being driven up by collectors ranging from Eli Broad's Broad Art Foundation and Charles Saatchi of London's Saatchi Gallery to speculators seeking alternatives to stocks. Prices of the top 25 per cent of the most expensive Contemporary pictures sold at auction more than trebled since 1996, according to London index-maker Art Market Research.

    Some collectors say buyers may face losses if they try to sell paintings bought recently, like investors who gobbled dot-com stocks late in the boom. Values will not keep rising forever just because wealthy people are building collections, says Marvin Ross Friedman, a Miami dealer and collector of works by artists including Andy Warhol and Roy Lichtenstein.

    "If anything, the feverish buying suggests a kind of herd instinct and the market may well be in for a serious correction," Friedman says. "Many of the new collectors do not have a grounding in art history or a fundamental understanding of what they are buying."

    Pricey accessory

    Works by living artists from Maurizio Cattelan to Marlene Dumas now sell at auction for US$1 million or more and even works by relatively unknown artists are snapped up at art fairs. Shimshak says he tried to buy a piece by a "hot" African artist, Wangechi Mutu, at the Art Basel Miami Beach fair in December and it had been sold at the outset.

    "Art has become the chips in the poker game of life for people of means," Friedman says. "I mean it has become a very pricey lifestyle accessory."

    Timing is everything for art buyers, as it is for investors. Shimshak says his best buys have been artists, including Edward Ruscha, before they were famous.

    Before art prices crashed in 1990-91 there was also a surge in speculative buying of Contemporary works, with sudden jumps in prices, according to "True Colors: The Real Life of the Art World," a 1996 book by Anthony Haden-Guest.

    Cattelan's "Ninth Hour," showing Pope John Paul II felled by a meteorite, had a US$2.7 million hammer price at a Phillips de Pury & Co New York auction in November. The sculpture, one of two copies made of wax, cloth, resin and rock powder, took US$800,000 at a Christie's International auction in 2001, according to Art Sales Index, a London data service.

    New collectors

    Art was bid up in the 1980s by new European and Japanese collectors, then collapsed as the effects of the 1987 stock-market crash spread. The top 25 per cent of works in Art Market Research's Art 100 Index peaked at 9040 in 1990, up from 1658 in 1985. It dived 59 per cent to 3686 by 1992.

    The Art 100 index, which tracks prices from 1976, includes artists from Rembrandt van Rijn to Pablo Picasso. The Contemporary index fell harder and longer. Higher-priced works in the Contemporary Art 100 Index peaked at 4979 in 1990, and fell to 1915 in 1996.

    More than US$20 billion of fine art is traded annually, says Joe La Placa of Artnet, a Frankfurt-based online gallery and data company. New York-based Sotheby's Holdings Inc, the No 1 auction house, disclosed US$2.7 billion of auction sales for 2004, and privately held Christie's International of London usually has similar results.

    The most heavily attended auctions in New York and London are sales of Old Masters, Impressionist and Modern, and Contemporary works. New York's main auctions are in May and November with smaller sales in between, while London's key sales are in February, June, July and December.

    "Strong nerves"

    Tefaf Maastricht, a Dutch fine art and antiques fair in March, draws Old Master collectors while those seeking Contemporary works throng the stalls at Art Basel in June, its Miami offspring in December, New York's Armory Show in March and London's Frieze Art Fair in October.

    "You need strong nerves to be buying" after the trebling of Contemporary prices, says Robin Duthy of Art Market Research, a stockbroker-turned-art analyst. "If prices go up that steeply there's trouble ahead - but you don't know when."

    Ali Bagherzadeh, a London-based manufacturer and collector just back from the Miami fair, says he will decide where the market's heading after watching London's February sales and New York's Armory show in March.

    Here are highlights of the coming Contemporary, Impressionist and Modern, and Old Master auctions:

    Supermodel Kate Moss posed for Lucian Freud, one of Britain's top selling painters, in 2002 when she was pregnant. The result, "Naked Portrait," will star at Christie's London sale of Postwar and Contemporary art on February 9. It carries a top estimate of 3.5 million pounds (US$6.8 million).

    Basquiat's graffiti

    Two of Jean-Michel Basquiat's untitled 1980s acrylic paintings are being advertised by Christie's and Sotheby's for their Contemporary sales.

    Top estimates are 850,000 pounds (US$1.53 million) and 800,000 pounds (US$1.44 million), respectively. Sotheby's Basquiat, a little smaller, shows one of the cult artist's African masks with graffiti decorations. Sotheby's sale is on February 10.

    Private collectors of Basquiat, who died in 1988 of a drug overdose, include the Broad Art Foundation, Santa Monica, California, and Zurich-based UBS AG, Europe's biggest bank.

    Shimshak, who spends as much as US$100,000 a year on art, mainly at dealers, says he's looking for "somewhat undervalued" works by Alighiero Boetti and Richard Artschwager. "I am trying not to chase the train that has left the station."

    For its February 8 Impressionist and Modern sale in London, Sotheby's is advertising Picasso's "Femme au Chapeau," a split- faced woman in a blue hat, and for its German and Austrian sale the same day, Max Beckmann's "Dame mit Spiegel," showing a woman with a mirror.

    Both paintings date from the 1940s and carry top estimates of 3.5 million pounds (US$6.6 million). Christie's ad for its February 7 Impressionist and Modern sale features Gustave Caillebotte's 1877 "Portrait de Femme Dans un Interieur" for as much as 2 million pounds (US$3.6 million).

    Another van Gogh?

    The best of such works tend to appreciate because the artists are dead and their paintings end up in museums. The May 1990 sale of Vincent van Gogh's "Portrait of Dr Gachet" for US$82.5 million in New York marked the peak of the last art boom. Did the sale of Picasso's "Garcon a la Pipe," which went for US$104.2 million in May 2004, signal the top for the current rise?

    While values are high, "I'm not seeing an irrational rise in prices in my market," says David Norman, Sotheby's co-chairman of Impressionist and Modern art.

    In the late 1980s, the art market was "walloped" by economic and political events including the Iran-Iraq war, while this time collectors absorbed the September 11 attacks and the conflict that followed, he said.

    Old Master sales draw buyers who fight for the few top-quality works that aren't in museums, passing over the rest.

    Christie's New York sale on January 26 will offer 15th-century Florentine painter Filippo Lippi's "The Penitent Magdalen," valued at as much as US$1.2 million, with 10 other works from the heirs of art journalist Denys Sutton.

    Sotheby's, a day later, will auction Sandro Botticelli's "Fortune," a portrait of a goddess valued at as much as US$600,000 that may have been commissioned by the artist's patron, Lorenzo de'Medici, the auction house says.

    (Source: China Daily, by Linda Sandler)