YouSaid · the spoken record

Scott Lynn

lines on the record: 63
first: 2021-05-16
most recent: 2021-05-16
sittings or episodes: 1
sources: podcast

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“Yeah, as soon as you create an account, you'll receive emails every single time we launch an offering. But yeah, that's the way to get started. I think most people that we talk to, 99% of people don't know how to think about art as an asset class. They don't understand returns. They don't understand risk. They frankly don't understand hold period liquidity. So we're kind of educating hundreds of investors a day on how to think about a new asset class.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Significantly less. We actually had a call today with our team to just walk them through how to think about traditional art fees versus how masterworks charges fees. And the reality is the art market has tons of transaction fees. Auction houses charge 20% commissions. Today, I think our average commission that we'll pay with an auction house is somewhere around 2 or 3 percent just because of our buying power. Advisors charge 10%. We don't use advisors because of a research team and an acquisitions team in-house. Most collectors pay sales and use tax. We avoid those transaction fees with our structuring repaintings are moved through the state of Delaware. The transaction fees historically in the art market have been very high, but we've created a pretty unique structure that gets around most of those.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“We're in every single deal. So we actually, you know, our management fees are one and a half percent per year and then 20% of profit when the painting sells. So we earn those inequity because paintings don't produce cash flow. So that one and a half percent is earned by issuing ourselves shares and that that individual vehicle. So our interests are entirely aligned with investors from that perspective. High level if anyone wants to get involved with Masterworks and look at some of these investment opportunities that can go to the website at www.masterworks.io request a meeting with our membership team and basically get on the phone with one of our representatives and walk through how they're investing today, what their investment objectives are, how they think about diversifying into art, what their objectives are with art specifically. And we'll work with people to construct a portfolio that makes sense for them.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“These are all qualified public offerings, so very similar to how Uber goes public. You can go to the SEC's website, search for Masterworks, and literally read every single painting that we've taken public. And today we're taking one painting public every 10 days roughly, valued somewhere between $1 million and $20 million. So there's a bunch of examples out there. But because they're qualified public offerings, we can sell securities to retail as well as accredited investors. So you don't have to be accredited.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Think about liquidity overall in their markets. You have $60 billion a year in transaction volume, right? Masterworks has a $140,000 investors. This year we'll raise $300 to $400 million. So our segment of the art market is still relatively small. I would think of liquidity from an art market perspective as frankly probably slightly better than real estate, right? If you own a $20 million home in Hamptons, it's going to take you a couple years, maybe one year at best, to sell that home. If you own a $20 million Boschiat, you probably have three or four collectors at any point in time that'll buy that painting. So it's still, you know, it is an illiquid asset class, not dissimilar to real estate, but I think it's better than real estate in many ways and obviously doesn't have caring costs and the complexity that goes with buying or selling a piece of real estate.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Really good. So, if you can generate returns without taking any, from my perspective, you know, material risks, I think that's super interesting. And that was the genesis really behind Masterworks in the beginning.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“I had a painting that I bought by an artist named Dakooning, which was a great one. I think I can't remember exactly. I think it paid $7.5 million for the work. And I think I sold it a year and change later for $16 million, which from a return perspective in the art market is pretty unheard of. It's definitely an asset class where you can generate great risk adjusted returns. Like to me, it was always when I thought about investing in art, it was never that I could make 50x or 100x returns. It's that I could return, I think when I last calculated this, I think personally I returned 21% of my portfolio over a 10 plus year period. But I could do that without taking a lot of risk. That's what was always so interesting to me. You just, it's very rare to see someone buy a Monet for $10 million and sell it for $5 million. It almost never happens. Like the store of value characteristics on art are really...”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“But one of the things that we've studied a lot at Masterworks is how does price point impact volatility and how does volatility go down or up relative to price? And generally what you see is what you would expect is the more you spend for a painting, the more volatility goes down and the more predictable returns are, which is why we fundamentally believe the only real investable segment of the art market for paintings somewhere between $500,000 and a million dollars on up. We think it's very hard to make predictable returns if you're investing in any artwork less than that. So that's probably the worst example or the worst decisions that I made personally collecting in the beginning. I've had a lot of great examples of paintings that I bought for I'm thinking of a painting I have downstairs in my living room where I bought for a million dollars, sold it for $11 million.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Personally, I would say that any collector, any investor, depending on how you define it, you make lots of mistakes early on. I think one of the mistakes I made early on was I focused on brand name artists, but I didn't focus on objects that were necessarily A- examples. So for example, Picasso, a lot of people don't realize this, but Picasso during his lifetime created, I think it's 65,000 objects. So a lot of people think, oh, you know, if you own a Picasso, that's amazing. The reality is there's 65,000 Picasso, right? You can buy in addition ceramic tile by Picasso for $2,000. So it's not necessarily that rare or that unique. So I think as a collector in the beginning, I bought a lot of addition work. I bought a lot of drawings. I didn't necessarily buy high quality egg examples. And I obviously had no idea at the time.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Well, it's actually, China's been on a downward trend. So we talked about how art is an uncorrelated asset class. One of the things that we saw in the art market in 2016, art prices actually decreased when public equities increased. You know, our best guess is that it was really due to two things. One, either to Brexit or two, due to capital controls in China and really preventing China from people in China from moving money out of the country. I think at the peak, China was 35-40% of the art market. Today it's down to roughly a quarter. We have seen that shrink, and that's not, by the way, dissimilar to other countries in the past. Like at one point, Russia was 25, 30% of the art market. Today, I think it's less than 5%. So you do sort of see these countries with mega billionaires come into the art market, move it in a big way, increase concentration, and then that usually changes over time.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“I think we spend our Saturday afternoons the same because I just watch that as well. The short answer is I have no idea, right? I mean, that seemed like such a bizarre story of, I mean, they also, by the way, you know, I think they mentioned this in the documentary, but they talked about how they cut those paintings out of the canvas when they took them from the museum. I mean, I can tell you, if you cut an old master painting like that out of the canvas, you can't even roll it. If you roll it, the paint will crack. You'll ruin the painting. So whoever did that didn't know what they were doing. They clearly weren't reselling it to someone who cared about art. I don't know. It was a good documentary, though.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Exhibited by museums. If it hasn't been talked about in our books, even if it is a real Jackson Pollock, it probably still isn't that valuable from an art history perspective. I think this idea of found or recently discovered painting, you know, it's great to talk about from a media perspective, but in the world that we live in, we just pretty much discount that stuff almost 100%.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“In today's world, it really isn't that valuable. So I'm on the board of an organization called IFAR, which is probably the leading art authenticity nonprofit. Most authenticity issues today are really dealing with old masters or people who are painting definitely pre-World War II mostly. For any major artist, there's a book published for that artist called A Catalog Resonate, which are the published recognized paintings that are authentic by that particular artist. You know, if you have a painting that's being offered to you that's not in a resume, particularly if it's a significant multimillion dollar painting, in today's world, you just don't buy it. And that's one of the arguments that I have a lot with people that don't understand authenticity well, which is you can argue about whether or not a painting is by Jackson Pollock, but the fact that you're arguing almost, you're already losing, right? Because if that painting is not in history, if it hasn't”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“those crypto people come in and start buying real paintings you may have read about 20 million dollar i believe it was a dora mar picasso that sold at christie's to one of the people that was registered for the the nft people painting so from an art market perspective we love that right like we would like to see more and more crypto people come in and start buying real art”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think like everyone else in the world, we were shocked when that NFT sold for $60 million. So my first rejection of that was this can't be a real sale, right? This must be two guys to whatever collaborating behind the scenes to mark this digital image at $60 million. And it was very surprising to us. So what we learned from talking to the auction house that day was that there were more than 30 bidders who were registered with the auction house who were totally unknown to the auction house. And in our world, someone who's spending $60 million on a painting is almost always known to an auction house, right? They're a large collector, multi-billionaire, very successful. The auction house knows who they are. So the auction house basically had 30 people show up from the crypto community to bid on this NFT that they didn't know who they were. That was fascinating to us. I think the thing that was maybe even more fascinating was after that sale, we've seen a few”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“What causes that, and I think a lot of it is many of these artists are ingrained in our culture, right? They're supported by museums, they're hanging in museums, they're in art history books, the kids learn in school, they're part of the narrative of contemporary society. So for whatever reason, I think that's helped kind of establish and help these markets survive throughout decades or centuries.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Get that question all the time. I think I just spin the question around and I say you can make any argument you want, but you literally have an asset class which has been appreciating in many ways for centuries. You're familiar with the DaVinci that sold a couple years ago for $450 million. Like some of these paintings have been around for literally centuries. And if you track individual artist markets, even like Onet, right, that market has been around for 100 and whatever, 40 or 50 years now, it's hard to make an argument that an artist like Monet is going to lose value. And we've never seen it happen, right? We've never seen artists that are very culturally significant, like Monet, like Picasso, like Orahol, et cetera, go from something to nothing because case changes. Now we have seen returns change for those artist markets, but we've never seen people really entirely fall out of favor. We do ask ourselves sort of why that is.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Us, that seems like the interesting opportunity or the interesting angle for NFTs is if people can somehow inherit a royalty stream when they're buying an NFT that feels like an investment to me, but otherwise I'm getting a digital image that has no IP associated with it. I don't understand that.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Obvious use case would be royalties. So you take an artist like Picasso. I don't know how much the Picasso family still earns in royalties, but I think it's nine figures a year. So there's a lot of earning potential in royalties for certain artists.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Bit surprising to most people, but if we go out and we buy a $20 million Basquia, which we did three days ago, we don't own the copyright to that painting. The Artist Foundation owns the copyright, or if the artist is living, the artist owns the copyright. So buying the object does not entitle someone to necessarily own the copyright.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Digital image on the blockchain that anyone else can copy if you pay $60 million for the people NFT that recently sold, I have just as much right to display that on my wall as you do. We actually don't understand what people are doing at all when it comes to NFTs. I think there would be some argument that NFTs have inherent value if there was some sort of IP that transferred with these images that people could own the copyright from and potentially profit from in the future. But today, we don't understand what the asset is that people are effectively owning when they purchase an NFT.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, look, I've been doing lots of interviews on this. I don't understand it. And let's talk about it, I guess, maybe for 30,000 feet. The reason that we don't understand NFTs. One of the things that we've talked about so far is that scarcity drives returns and cultural significance matters. So one of the things that we struggle with with NFTs is that the investment proposition goes something like there's a digital image that for whatever reason is important. Let's just use the word important rhythm cultural significant is important. And because we take that digital image and we put it on the blockchain, it now has scarcity value, and that should cause it to go up in value in the future. And we don't understand that. And the reason we don't understand that is because when you transfer that digital image to the blockchain, you're not transferring copyright. You're not transferring any IP. You're frankly just putting”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Is that if there is very low cultural significance or no cultural significance in an artist's market is run up and prices for paintings are selling for millions of dollars, it is potentially risky long term that it may be hard for that artist to maintain those price points if there's low cultural significance.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Of the things that we spend a lot of time thinking about, and we don't have clear data on this today, is the question of what role does cultural significance play in terms of returns over time? And when we talk about cultural significance, we have to first define what that means. So our internal definition of cultural significance is threefold. One, which other significant artist does that artist exhibit with? Two, which institutions or museums collect that artist? Three, how global is the demand for a particular artist? So we built models where we try to look at cultural significance and then correlate that to future returns. And I would say, you know, as much as we would love for there to be a clear correlation between cultural significance and future returns, there really isn't. There's some loose correlation, but there really isn't a clear correlation. But what we do see”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“I don't think we've never seen anything in the data to indicate that if an artist doesn't work on a particular object, that object is less valuable. So long as it's generally accepted by that artist, however, we have seen a bunch of data with living artists who produce tons of work and their market falls apart because of just the total volume of work they're producing. So I think it's, you know, our concern is more about what is the volume of work that an artist is going to produce and how does that hurt their market. A great example of that is Damien Hearst, who many people might be familiar with. I mean, Damien produces more art than a small factory. And he's one of the few artists in the top 100 who's had consistently negative returns. I think we've seen three artists out of the top 100 who have negative returns and is one of them.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“So, the reality is it's been an accepted practice in the art market for centuries. So, you know, using Rembrandt as an example, there's Rembrandt, and obviously the person, and then there's sort of school of Rembrandt, which are people that worked for him, people that painted on his behalf. It's one of the reasons that with a lot of old Rembrandt, there's been authenticity issues because so many hands from different people were on those paintings, it's very difficult to tell which specific section of the painting did he paint versus what sections did other people paint. And we see that same practice today with a lot of artists. I think the reality is when artists are famous in their lifetime, they generally sell paintings for a lot, which causes them to want to produce as much work as possible and they can't do it on their own. So a lot of artists have dozens, I guess certain cases, hundreds of assistants that are helping them create these works under their name.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“It is interesting that for artists even like Rembrandt, we don't really see prices decline. We see appreciation approach zero or returns approach zero, but we don't actually see prices decline. Could that change in the future as the market continues to grow and get bigger? I'm not totally sure how to think about that. I think the thing that really helps maintain price in the art market, again, is this shrinking supply dynamic. Because now if I want to buy a rembrand, there's only, I don't know the answer, but I'm guessing less than 100 good rembrands and private collections that I could actually purchase. So I think that helps maintain the price, even though interest from collectors is declining over time as well.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Don't actually see a lot of that, to be honest. I mean, we do see it when an artist is specific to a region. So, for example, Banksy grew up in the UK, has popularity is much greater in the UK than it is in the US. Oftentimes, we'll see Banks sell in London for that reason, even if the owner of the painting is in the US. But generally, we don't see a lot of shifting of works between regions by collectors.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“A good question. So many people do not know this, but we have the special capital gain rate for collectibles, which today is 28%. And you can kind of, you know, depending on how you define it, you can kind of think of that as a wealth-like tax. It's really targeting people who are trading objects like this. That does already exist. Now, interestingly, if you're buying a security in a painting through Masterworks and you're selling that security on a trading platform, you're still paying capital gain, not the regular capital gain of 20 versus 28. But yeah, that tax does exist effectively on the art market today.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“That tax change specifically didn't really change how they thought about buying or selling paintings. So, you know, I guess we think about things like wealth taxes. We think about specific taxes that can target the art market. Anything of that nature could introduce a risk to art returns.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Think you're exactly right. So when we think about risk to the art market, we tend to think about what are the risks of the top 1%, what will cause them to stop buying art. And it's interesting, if you go back, I don't know if you recall all the details of the Trump tax plan, but there were a lot of changes to 1031s, which allowed investors, particularly in real estate, to roll their gain over into a new asset. 1031s were actually removed for art whenever that was those changes went in place three or four years ago now, I guess. So we thought at that point in time that could have had a material impact on the art market because so many particularly big collectors really relied on 1031s to continue rolling gains forward. And interestingly, it had no impact. We didn't see prices change at all, which we were frankly surprised by, maybe because 25% of the art market is the US, maybe because the top 1% has so much money now that”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Caso is usually the largest market, so somewhere between Picasso, One, and Boschiat, they tend to trade off. Those are the largest in terms of transaction volume. I'll get this number specifically wrong, but I believe last year Picasso was somewhere in the 12 or 13% of the overall market is the largest artist in terms of transaction volume. So you don't really have the Fang dynamic in the art market, but you do have a half dozen names which are 20, maybe 25% of the market overall.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Again, it really, really depends on the artist market. I mean, we see living artists today, for example, who their paintings are selling for $50,000 10 years ago, 15 years ago. Today they're selling for 1.5 million, right? So just the volatility on that alone is very high, but the return is obviously very high as well. Someone like Monet, it's very low. I mean, I think we see vols less than 10% for him as an artist. It really depends on the individual artists in their market. You know, I would think of artists similar to any other asset class, right? Like there's segments of the art market, which are super volatile, very unpredictable, very speculative, and there's other segments which are much more predictable and less speculative.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Not a lot of work, so he died young of a drug overdose, and there's not a lot of paintings. But, you know, I think we'll see somewhere between five and ten. I don't know if I would use the word major, but paintings in excess of $15 million trade every year is probably the right way to think about it. I think his market overall is doing somewhere between $300 and $400 million a year now.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Boscat is an exception, right? He's kind of the anomaly here. So he's what we define as a blue chip artist, but for over 15 years, maybe 20 years, his market is appreciated somewhere between 15 and 20% per year. So he's one of those artists where he's very predictable, his returns are very high, but he's arguably the best performing artist in the art market overall.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Depends on what the investor is trying to achieve. If someone said, hey, I'm just looking for store of value very low risk. My target return is 6%. I would point him to someone like Monet if they're targeting 15% plus returns. We would probably point them more towards major significant living artists, but there's a bit higher volatility”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“15% when we look at historical appreciation. The ARIS bucket tends to be less volatile and have lower returns, generally somewhere between eight and 12% depending on the artist market. But there's not a right or wrong answer. One of the artists that I think is very interesting, which MasterWorks is not really that focused on anymore, is actually Monet. And Monet typically is the second or third largest selling artist in the art market selling somewhere between $200 and $400 million in art a year. And the interesting thing about Monet's market is that historically he returned somewhere around 7% annualized appreciation, but the volatility is so low, like his returns are so predictable that what your listeners would think of as a sharp ratio is actually pretty outstanding, I think, somewhere around 1.2, which in the art market is a really good sharp ratio. So it really...”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“The answer is it really depends on the investor, so it really depends what the investor's objectives are. Masterworks tend to focus generally on two different segments of the art market. One is what I would describe as mid to late career living artists. And we tend to classify artists into two different risk categories. One is an A risk category and one is a B risk category. So the living artists, we tend to put in this B risk category. And then in our A risk category, we have brand name well-known artists like Picasso, Warhol, Boschiat, et cetera, probably what you're referring to as blue chip. Interestingly, we've done a lot of work on these two different buckets to try to understand how to risk adjusted returns differ. And risk adjusted returns are basically the same. So there's not necessarily a right decision or a wrong decision. The living artist bucket tends to be more volatile but have much higher returns, generally returns above.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Think it's really interesting. I mean, you know, again, the only investment product for art today is via Masterworks, the only secondary market for Masterworks. So I think there's a long road ahead before we get to option markets. But I think it's, I mean, I think it's certainly interesting. And there's definitely a lot of people in the art market that would want to make particular bets on individual artists, but yeah, it doesn't exist now.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“So the art market, I guess the way I would think about selling a painting is I would describe it as very event driven. So you want to sell a painting going into momentum, either because an artist just recently set a price record, there's a museum retrospective or an exhibition, something like that. So I wouldn't necessarily say that an exhibition itself causes a painting to be worth more, but it does generate buzz around that artist's market, which is usually the right time to sell.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so we have a pretty good structure in place where we avoid sales and use tax on these investments. So today everything is sitting in what's referred to as a freeport in Delaware. So we buy the paintings, they go into storage in Delaware. We do lend them out to institutions for important artist exhibitions or retrospectives, as they may be called. But in general, most of them, most of them stand storage.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“We have 140,000 investors signed up on the platform today. And I would say the vast majority of those, I don't have the exact number now, but I would guess 80% really, really intend to hold those securities long term. So they're just viewing it as liquid long-term holds similar to private equity or something like that. So there's a small minority of investors who are actively trading, but most people still view these as long-term investments.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Last time I was on, we didn't have a secondary market. We launched that in the middle of last year. So we now have people, you know, we have thousands of trading accounts opened, investors are trading shares and individual paintings, which is interesting. I mean, I tell people to think about our secondary market very different than how you would think about an exchange-traded security. So it's not, you know, an investor wants to sell their shares at a reasonable price. They go into the secondary market. They list their shares at a certain price. And that trade might clear in a week. So it's not, you know, it's not like you're buying and selling shares at Google. It's trading in milliseconds. But there is liquidity for people that are looking to get in and out of these securities now.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“We're in process of working on fun products right now, so rather than simply having people pick and choose individual paintings to invest in, they can invest in a fund which effectively buys securities and those under But an index product is far out. Our secondary markets have some liquidity, but they don't have the required liquidity that it would take for an ETF-like product.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Price per share is the same on every IPO we do, so it's always $20 a share, and the minimum per painting is $10,000. So anyone investing in any particular painting would invest at least the minimum unless we waive that what we do on a case-by-case basis. But we tell people to think about portfolio construction across a number of paintings. So similar to any other asset class, diversification really matters. And we've even seen that in a lot of our own internal data. And I think it's, you know, I talked about it with our CFO, but I think it's analogous to frankly, even public equities, how it's very hard to pick winning stocks over time. You're probably better investing in an index. I don't know how to think about that in today's world, but probably better investing in an index.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“So, I would think about it in two different buckets. One is auction houses, auction houses like Christie's and Southey's, and then two are primarily mega galleries, a galleries like the Gozian, Pace, Hauser and Worth, et cetera. So these are kind of the main players in the art market. They're the ones who handle most of the transaction volume. The art market is not friendly to new collectors, right? And I think maybe even a lot of your listeners have experienced this. When you walk into an art gallery and you're interested in buying a painting, a lot of people getting nored, right? Like it's not the most friendly industry. I think with MassWorks to a certain extent, we're making it easy for people to engage with the art market on a painting-by-painting basis with limited capital, ramp up, learn about it, and then eventually hopefully get more involved.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“No, and I would love it if we could pull off that structure. The reality is it's just the way the art market operates. We have to move quickly, do deals fast to find good investments. So we do it with balance sheet capital.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“So these are qualified public offerings. So we buy paintings of balance sheet capital. We file them with the SEC as identified objects effectively. And then people invest in particular specific paintings.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Thousands of collectors, whether it's 5,000 large collectors, 10,000 large collectors that I don't know the exact number, but you have thousands, not millions who are buying and trading these $10 million paintings. But I think as we see investors broadly define, particularly for managed money, come into the art market that's really disruptive from an asset class perspective.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“I wouldn't say that we're disrupting the art market. That's maybe a common misconception. The art market today, I think, is really excited about masterworks because we're effectively taking a pool of capital that hasn't been buying paintings or investing in art and bringing it to the art market through these investment vehicles. So I think we're probably the largest buyer in the art market today. So that in itself makes the art market like us. I think when I think about what we're disrupting, I tend to think about the alternative investment universe. You know, as I mentioned earlier, we really have one of the largest asset classes that's never been securitized. And I think there's parallels today's world to thinking of that in the context of whatever Bitcoin at $1,000, right? Like when Bitcoin is very early, no institutions were allocating to it. It was all individuals and it just behaved differently than it does today. That's really the status of the art market.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT