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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“Wealthier, our prices go up, then you probably can also assume that on a global basis, that top 1% behaves differently than the rest of the market. And two is that art is an illiquid asset class. People invest to hold it for a very long period of time. So some of the correlations you would see with things like S&P that would be more extreme in moments of stress, you just don't see because it's inherently an illiquid asset class.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“We've done this research and it was actually an interesting case study, I guess, for better for worse between what our research said and then what happened with COVID. So we published a report on correlation between art and other asset classes at the end, I believe it was in December of 2019. And we basically concluded that art is effectively uncorrelated. I think the highest correlation at that point in time was to, I believe bonds, and I'm not remembering specifically what the correlation was, but it's very low. Still it was like 0.2. When we look at it compared to the S&P, depending on the period we measure, measure somewhere between zero and 0.11. So it's effectively uncorrelated to almost every asset class. We often get the question, why is it uncorrelated? And I think there's a couple of reasons. One is that if you believe that our prices are correlated to the top 1% and as the wealthy,”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Understand. So there's definitely a relationship between recency and return, but those returns or those recency periods are measured in very wide increments. So for example, today, masterwork thinks that the most investable segment of the art market is art created after World War II, which has been roughly 75 years. And just now we're seeing art created right after World War II starting to decelerate in terms of returns. So returns are correlated to fashion, but it happens in very, very wide increments.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“I guess it depends on the investor. So when we're onboarding investors into masterworks, we run them through suitability and try to understand what is the size of their overall portfolio, what is their tolerance for liquid investments. City did the very first study on an asset allocation model to art in 2018, I believe, and they concluded somewhere between 1.8 and 8% if you look at the art market overall. And we can certainly talk about performance by segment in the art market, but One of the things that's really interesting about the asset class is as art ages, very broadly speaking, returns go down. And this is something that a lot of people don't totally understand. So if you take an artist like Rembrandt, for example, I can almost guarantee you that if you buy your Rembrandt today for $20 million, you will sell it 10 or 20 years from now for roughly what you paid plus inflation. That's one thing that I think a lot of new collectors also don't”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Best estimate is $1.7 trillion. You can think of that $60 billion a year as whatever, a couple percent turnover on the overall size of the asset class. The interesting thing about that 1.7 trillion dollar number is it really excludes art held by museums or institutions, which obviously in terms of the global landscape is the most culturally significant art, but museums or institutions for a whole bunch of reasons never sell their art.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Understand how our particular paintings are appreciating, how our artist markets appreciating, really for the first time ever.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“When I started collecting art, it was in the late 90s. And, you know, I did it because I was passionate about it. I had a mother whose name church artist who grew up with art books. But it quickly to me started to become interesting just from an investment perspective. And the main thing that drove that, I guess like many things, was really the advent of the internet. So for the first time ever, you had websites which are publishing prices that paintings sold for a public auction. And quickly within a number of years, you had large databases that tracked public transaction records of paintings. So today there's roughly $60 billion in art that sells every year. Half of that is a public auction. So you have this very big data set that you can analyze to determine things like returns, correlation, loss rates, et cetera. So, you know, in today's world, a lot of people that look at the art market are looking at this data to try to”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“Is an adjustment, which you know, that's a whole separate topic that I guess we can debate. But the interesting thing about art is that over time, when you have a great artist, there becomes very and very few paintings that are actually left after they pass away. And in many cases, those paintings sell for millions of dollars because of that.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“And it's important to understand that the R market today is 25% US, 25% China, 25% Western Europe, and 25% rest of world. So you can literally buy a painting in New York, put it on a plane, fly to Hong Kong and sell it. So we do view it on a global basis. The second thing which is really interesting is that art is one of the few asset classes that becomes more scarce over time. And what I mean by that is that If you have an artist who is living, who's well known, who paints a bunch of paintings and then passes away, at some point those paintings are donated to museums or institutions. So the supply actually decreases over time. And that's actually a really, to me, a really interesting concept because you think about other asset classes, like real estate, there's constantly more real estate being built, gold, there's constantly more gold being mined. This is one of the arguments that I think people have as to why Bitcoin is.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“We now today, I guess, two and a half years later, have the leading research team in the art market and we publish a lot on everything from returns, correlation, loss rates, et cetera. One of the common questions that we get, particularly from institutions, is what drives our prices. Why do our prices go up even though we know that they've gone up for decades now, in many cases outperformed other asset classes like the S&P, like real estate, like gold, not only from a return perspective, but also from a risk adjusted return perspective when accounting for volatility, the obvious question is why are our prices going up? And I think that we generally have two answers for that. One is the top 1% and demand by the top 1%. So we generally believe that investing in art is similar to buying a call option on the ultra wealthy. The wealthier the top 1% gets, the more art prices tend to go up on a global basis.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“We have struggled with this question internally so many times. And I think the thing that's particularly fascinating is art is one of the oldest asset classes. Sotheby's, for example, up until recently going private was the oldest listed company in the New York Stock Exchange at 275 years old. So the asset classes has literally been around for centuries and you would have thought that by now there would have been an investment product, but there hasn't been.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT
“It's a good question. So I've been starting technology companies for the past 20 years and also collecting art at the same time. Personally, I have a top 100 collection, have always been fascinated by the asset class. I think my perspective on, I guess, the asset class and the art market generally is it's probably the largest asset class that's never been securitized. Masterworks was the first firm to securitize a painting. When you step back and think about that, it's kind of amazing, right? Because art is a $1.7 trillion asset class. And if you compare that to the most comparable asset class that people know, which is venture and private equity, that's a three and a half trillion dollar asset class or roughly twice the size. But in today's world, there's 9,000 firms that help people allocate to venture and private equity, but there's literally never been an investment product in the art market. So from our perspective, that's what the opportunity is, is how do you take this asset class and make”
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 must have been on the show last very early because I think our first painting that we had securitized with the SEC launched in May of 2019, but yeah, I mean, I think it must have been right after launch.”
2021-05-16 · We Study Billionaires · TIP349: Why You Should Be Investing In Art Shares w/ Scott Lynn · IDENTIFIED FROM THE TRANSCRIPT