The Art and Finance of Fine Art

“The reason I came to Masterworks,” Allen Sokhulitsky tells me, “was because I saw an opportunity that, frankly, I never expected to see in my career.”

Masterworks, if you’re not aware, is the leading platform – the only platform – for individual investors to put their own money in shares of unique and individual pieces of fine art.

While crypto and NFT’s are auguring into digital dust, we thought it would be a good idea to talk to Allen, who’d traded his senior global market strategist position at Goldman Sachs for the chief investment role at Masterworks.

“I’ll tell you about my thought process,” Allen answered with aplomb. “While I was a Goldman, I was basically in a macroeconomic research and asset allocation capacity. I would research all the major asset classes. I would give views on what I thought was a more attractive or less attractive investment opportunity, how to think about them in terms of a portfolio, so on and so forth. That’s what I did.”

What Allen says next makes a lot of sense, to me:

I didn’t know in all the years that I was doing that all around the world, there was a nearly $2 trillion asset class that all of us are familiar with in some way. Sometimes we see it in our house. Sometimes we see it in a company that we might visit in their office. Sometimes we see it in museums that we go to. This asset class is literally all around us. It has existed for centuries, long before companies were going public, long before companies were issuing debt.

This asset class has existed forever. It’s got all of those. And here’s the kicker that really sold me. The kicker was despite everything I just said, almost no investor has ever thought about investing in it the way that they think about investing in their stocks and their bonds or their gold or oil or whatever else that they might invest in.

That to me spelled enormous opportunity because what I could eventually become part of was not a company that was creating something literally brand new along the lines of let’s say cryptocurrencies, which actually didn’t even exist before, whatever, 10, 11, 12 years ago.

We’re not bringing anything new to the market. We’re actually coming to investors and saying, “We want you to consider an asset class that for one reason or another the entire investment industry just completely forgot about long ago despite the fact that that asset class has existed for so long.” What we are doing is making that asset class investible, accessible. What sold me on the idea was to be part of the company that is making an asset class available that, as I always say, should have been invested in a long time ago. It’s just that nobody figured out how to make it accessible until Masterworks came about.

I encourage you to watch and/or listen to Allen yourself. His words and ideas are not just about art, although that is definitely one of the most interesting components of our conversation, they’re also a comprehensive way to think about building wealth, freedom and security for your family.

Do both: watch Allen speak here . And get your own account at Masterworks, here.

Oh, one other thing, write to me here with your own thoughts.

P.S. We noticed Warren Buffet, through Berkshire Hathaway, bought a substantial stake in Pfizer in April of 2020. How could he have known Pfizer, so early in the pandemic, would have been the leading purveyor of vaccines?

The vaccines were bought by the government, mandated for adults and children alike, distributed to this day for free, but paid for with taxpayer money.

That’s a good gig if you can get it.

Yesterday, the very day U.S. president Joe Biden met with his counterpart in the People’s Republic of China, Xi Jinping, and lowered the temperature on the huff over Taiwan, Buffet bought a $5 billion stake in Taiwan Semiconductor Manufacturing. Five billion, a little more than the latest Powerball winner took.

Taiwan, if you’re keeping up, is both the epicenter of semiconductor manufacturing… being claimed by China as part of their homeland… and the reason the Biden administration pushed through the “CHIPS and Science Act” passed by Congress in August of 2022.

The act “invests $280 billion to bolster US semiconductor capacity, catalyze research and development, and create regional high-tech hubs and a bigger, more inclusive STEM workforce.”

Any chance Buffet knew about that deal in advance? It’s possible he’s just wicked smaht.

Addison Wiggin

Addison Wiggin

Addison Wiggin is founder and executive publisher of Agora Financial LLC, an independent economic forecasting and financial research firm. He and Bill Bonner began writing the firm’s flagship Daily Reckoning in the midst of the tech boom and bust. It was one of the first widely distributed email newsletters on the Internet. The publication’s critical eye on finance and economics continues today. He’s also creator and editorial director of Agora Financial’s daily missive The 5 Min. Forecast.

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