3 Simple Steps to Buying Timeless Art If You’re Not a Billionaire
There are two types of art buyers: short and long-term collectors. This article is for the latter kind. Short-term collectors look to flip art for profit. Long-term collectors look for pieces with intrinsic value. With headlines about pieces selling for millions of dollars, many would-be collectors come to believe that all art worthy of collecting is prohibitively expensive. The truth is that by practicing value investing, long-term art collectors may get more bang for their buck.
Quoted in Bloomsberg, where this article is sourced, director of the Princeton University Art Museum James Steward said, “We need people to recognize that it’s still possible to collect without having vast resources. I try to steer people to the fact that if they buy counter to fashion, or something that hasn’t been discovered, there can be real opportunity.”
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Collecting beautiful art that is not hyperinflated by speculation or hype depends on looking for unfashionable or neglected samples. Following are three sign posts for how to buy outside the madness.
Buy Out of Style
The art market is as shifty as some artists’ temperaments. What is considered “in” one day can be thrown out the next. Quoted in Bloomsberg, director of the Center for the History of Collecting at the Frick Art Reference Library in New York Inge Reist said, “The art market is cyclical. Some artists go in and out of favor. If they’re talented enough and were popular enough, there’s a good chance they’ll come back.”
One artist that was talented and popular enough was Adolphe Monticello, a major 19th century painter. His artistic merit made him very popular during his time until impressionism captured the world’s imagination. For 90 years, Monticello’s work was overlooked. Today it’s making a comeback.
Buy Obscure but Important
We all know the benefits of being “in the loop.” You’re privy to valuable, actionable, exclusive information. In the art world there are “collecting categories” that are surprisingly affordable because few people know they exist. Find these.
Quoted in Bloomberg, senior consultant for pre-Columbian art at Sotheby’s, Stacy Goodman, said, “I think a lot of people are surprised that there is authentic, ancient material with good provenance that is, relatively speaking, affordable. You can certainly buy a super-high-quality piece for under $10,000.”
An example of this is pre-Columbian art—the sculptures, vases, artifacts and jewelry made in South and Central America from 13,000 B.C. to 1500 A.D. They are selling at between $5000 and $10,000 instead of $500,000 and $1 million because few people know they exist.
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Buy Outside the Narrative
Art is valued for its perceived art-historical significance. In the case of John Constable, his plein aire paintings sell for dozens of millions because “there was a sense that he was a modernist, after the fact,” said Princeton’s Steward, quoted in Bloomberg.
Constables that don’t fit comfortably into this narrative but have great intrinsic value nevertheless are comparative bargains. A drawing of Salisbury Cathedral sold for just under $25,000 at Bonhams in 2013.
Photo credit: Adolphe-Joseph Monticello (Marseille 1824-86). Supper or At the Inn of Good Wine by Karl Steel
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.