International Investing

According to the Mei Moses Index, art has been a much better investment than the S&P. For the past five years it has gained over a 20% annually. With so much liquidty going everywhere else its not suprising that the art is rising.

Capping off the gain was the news that a Jackson Pollack painting sold for $140 million in November. Value is subjective, but the newsletter The Daily Reckoning has good reasons why they think the art market is out of control:

The buyer chose to remain anonymous. What a shame. Anyone who would spend $140 million on a dreadful painting deserves notoriety. In fact, more than that…he deserves clinical study. That amount of money would produce about $7 million in income each year, if invested at 5%. What kind of person could get $7 million dollars worth of pleasure from looking at a Jackson Pollack painting each year?
…
Unless the owner can get a return of $7 million…he must be counting on something other than yield. He must be counting on capital gains! He must be counting on an even higher price…and an even greater record! He’s probably betting that there is an even greater fool.

Here is what $140m will buy you: