Skate's Art Investment Review 2011 Annual Art Investment Report

Transparency For The Global Art Market Since 2004 www.skatepress.com
In this Issue:
155 East 56 th Street, 4 th floor, New York, NY 10022 USA /phone: +1.212.514.6010
Skate’s Art Investment Review
2011 Annual Art Investment Report
Introduction ................................................................................................................................................................................... 2
2011 Art Market Overview ...................................................................................................................................................... 2
Table 1 Skate’s Top 5000 Key Metrics in 2011 versus 2010 ............................................................................. 3
Table 2 Skate’s Top 5000 Peer Group: Key Data Points ....................................................................................... 3
Table 3 Skate’s Achievement of the Year Awards ................................................................................................... 4
Art Market Liquidity Amid a Chinese Bubble? ................................................................................................................. 4
Table 4 Ten Most Active Artists by Number of Artworks Traded Within Top 5000 Price Range ...... 6
Table 5 Biggest Changes in the Artists’ Market Capitalization of Skate’s Top 5000 in 2011 ............... 6
Table 6 Ten Most Valuable Artists in Skate’s Top 5000 (as of December 30, 2011) ............................... 7
Table 7 Top Five Auction Prices Paid in 2011 .......................................................................................................... 8
Investment Potential of Art in Skate’s Top 5000: ERR Results of 2011 ................................................................ 8
Table 8 Repeat Sales Data: 2011 vs. 2010 ................................................................................................................. 9
Table 9 Ten Most Liquid Artists (Greatest Number of Repeat Sales by Years) .......................................... 9
Table 10 Five Best Exits from Art Investments in 2011 ...................................................................................... 10
Table 11 Five Worst Investments in Art Realized in 2011 ................................................................................. 11
Table 12 All Time ERR Records (Based on Repeat Sales within Skate’s Top 5000) ................................ 12
Table 13 Female Artists in Skate’s Top 5000 ........................................................................................................... 12
Leaving Skate’s: Value Reductions and Exits ................................................................................................................. 13
Table 14 Revolving Door: Artists Represented in Skate’s Top5000 of Artworks by Auction Prices 13
Table 15 Top 10 Losers: Artists with the Greatest Reduction in Value and Number of Artworks (as
Represented in Skate’s Top 5000) ..................................................................................................................................... 14
Table 16 Top 10 Artists by Market Capitalization without Sales Records in 2011 (in Skate’s Top 5000 Price
Range) 14
Table 17 Most Valuable Living Artists (Based on Representation in Skate’s Top 5000) ....................... 15
Table 18 Skate’s Top 5000 Living Artists Who Passed Away in 2011 ........................................................... 15
Skate’s Art Stocks Review ...................................................................................................................................................... 16
155 East 56th Street, 4th floor, New York, NY 10022 USA /phone: +1.212.514.6010 web: www.skatepress.com

Introduction
Welcome to the 2011 Annual Art Investment Report
by Skate’s. Published by Skate’s Art Market Research
since 2006, this report covers global art market
trends and provides forecasts for the coming year.
Our coverage is focused on the universe of global
artists (674 names as of December 30, 2011) whose
works are represented in Skate’s Top 5000, our
database of the world’s most valuable art based on
auction prices. We also follow all publicly traded art
funds and companies operating in the art industry
around the world, tracking their performance with
Skate’s Art Stocks Index.
To learn more about Skate’s Top 5000 and the
artworks and artists represented, please download
Skate’s application for your iPad or visit
www.skatepress.com. For art stocks and art funds
coverage, please visit Skate’s Art Stocks & Funds.
In this report, we focus on the world’s leading
auctions with sales qualifying for entrance into
Skate’s Top 5000 in 2011 (the threshold price stands
at $2.1 million as of December 30, 2011). Skate’s
currently covers 30 auction houses globally, of which
Sotheby’s, Christie’s, Poly International Auction,
Phillips and China Guardian Auctions are by far the
most significant contributors of works to Skate’s Top
5000.
2011 Art Market Overview
� Skate’s Top 5000 total value reached $30.5
billion, and the ranking’s threshold price broke
the $2 million level.
� Average annualized investment returns on the
world’s masterpieces peaked at 4.82%, 1
confirming the strong performance of
�
exceptional artworks amidst global economic
turmoil.
Skate’s Art Stock Index had its worst year since
2008, losing 15% in value in 2011. This
performance came despite robust auction
1 As measured with repeat sales at auctions, includes
auction fees but excludes ownership and transportation
costs, before taxes.
volumes, with the index’s flagship stock
Sotheby’s shedding over one-third of its value in
2011, producing a -35.5% return for its
shareholders for the year as of December 23,
2011.
Perhaps, the key outcome is that throughout 2011
the art market has resisted pervasive global
economic turmoil and instability, with its high-end
segment growing on every measure in 2011
compared to 2010 (see Table 1 and next page for key
results). Driven by a record 119 repeat sales
registered within Skate’s Top 5000 in 2011, the
weighted average returns on Skate’s Top 5000 grew
to an all-time high of 4.82% per annum. Sellers
exiting the market in 2011 saw annualized returns of
7.20% on their works.
Today, to merit entry into Skate’s Top 5000, an
artwork must sell for more than $2.1 million at
auction; 721 such works did so in 2011 for a
combined value of $4.3 billion. These new entries
represent a very diverse universe of 250 different
artists, 81 of whom had no prior record in Skate’s
Top 5000. We note a pattern clearly reminiscent of
2006/2007, when booming demand for high-end art
coupled with a scarcity of works from established
names helped to bring multimillion dollar valuations
to “second choice” artists. As a result, art dealers
and auction houses were and are again now able to
establish price records for less well known art and in
the process feed more names into the pantheon of
the world’s most valuable art.
Typical of such boom times, we have observed a rise
in the presence of living artists, female artists and
artists from BRIC countries. In 2011, 59 new living
artists and 10 new female artists entered Skate’s Top
5000. Notably, 82 BRIC representatives—primarily
Chinese artists—significantly increased their share in
the rating compared to last year. These artists also
occupied top places along with artists who have long
held established auction market records. The only
slight decline was noticed in the average price paid
per work created by BRIC artists: $6 million in 2011
versus $6.2 million in 2010.
2

Transparency For The Global Art Market Since 2004 www.skatepress.com
155 East 56 th Street, 4 th floor, New York, NY 10022 USA /phone: +1.212.514.6010
Table 1 Skate’s Top 5000 Key Metrics in 2011 versus 2010
Benchmarks 2011 2010
Number of new entrants * in 2011 721 588
Total value of new entrants, USD 4,308,313,384 3,629,214,346
Number of artists behind new entrants 250 223
Number of new artists ** 81 47 (since 31-May-10)
Number of living artists among new entrants *** 59 46
Number of female artists among new entrants 10 8
Number of BRIC artists among new entrants **** 82 53
Number of repeat sales 119 117
Weighted average ERR of repeat sales ***** , annualized % 7.20 7.13
Source: Skate’s Art Market Research
*
New entrant – an artwork included in Skate’s Top 5000 with its most recent auction price record achieved in 2011
**
New artist – an artist who had no representation in Skate’s Top 5000 at the time his/her work’s sale on the auction
market qualified it for entry into Skate’s Top 5000
***
Living artist – living as of the date of related auction sale
****
Artists attributed to BRIC on the basis of their place of birth (i.e., Brazil, Russia, India or China)
*****
Weighted average effective rate of return calculated for the entire statistical set of Top 5000 repeat sales records
with weights assigned on the basis of the initial purchase price (including buyer’s premium), converted to USD (for
non-USD sales) on the basis of the exchange rate at the time of sale
Table 2 Skate’s Top 5000 Peer Group: Key Data Points
Benchmarks 2011 2010
Total value, USD (aggregate auction prices paid) 30,528,112,812 27,630,454,263
Weighted average ERR annualized, % 4.82 4.24
Percentage of trades being repeat sales, % 12.5 12.3
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Percentage of volume being repeat sales, % 14.1 13.9
Number of artists with more than 1 trade 361 358
Number of artists with more than 5 trades 174 154
Threshold price, USD (the value of the 5000 th artwork) 2,136,000 1,870,000
Source: Skate’s Art Market Research
Table 3 Skate’s Achievement of the Year Awards
Achievement Name Comment
Artist of the Year Zhang Daqian
Female Artist of the Year Tamara de Limpicka
Artwork of the Year
Best Exit of the Year
Worst Exit of the Year
Eagle Standing on Pine
Tree
ERR of 93.82% on
Three Years’
Investment in Lady in
Solitude by Fu Baoshi
Negative ERR of -
18.13% on Three Years’
Investment in Still Life
with Mirror by Roy
Lichtenstein
Supply Problem of the Year Vincent van Gogh
Disappointment of the Year Damien Hirst
Source: Skate’s Art Market Research
Another very important and healthy trend for 2011
has been the crystallization of repeat sale liquidity
around a growing number of artists. The number of
artists with more than five repeat sales records in
Skate’s Top 5000 has increased by 13% to 174
names. As a result, trading in high-end art is
becoming ever more diverse with more
benchmarking data available for potential buyers.
This trend is essentially harmonizing a larger portion
of the art market and giving it greater transparency
The biggest gain in Skate’s Top 5000 in market
capitalization and the largest # of artworks traded in 2011
in Skate’s Top 5000 price range
Born in Moscow as Maria Gorska, Tamara de Limpicka
became the most actively traded female artist in 2011
within Skate’s Top 5000 pricing range, achieving a
weighted average ERR of 13% on five repeat sales
Work by Qi Baishi was sold at China Guardian Auction for
$65,532,112 on May 22 and became the most valuable
artwork sold on the auction market in 2011, now ranked #
15 in Skate’s Top 5000
The artwork was purchased for $262,830 in 2008 and sold
for $1,932,217 on April 5, 2011, yielding an annualized
investment return of almost 94%
The artwork was purchased for $9,599,371 in 2008 and
sold for $5,800,000 on May 12, 2011, yielding an
annualized investment return of -18% and a direct loss of
$3.8 million on this investment
The largest artist by market capitalization who had no
single auction record within Skate’s Top 5000 in 2011
The most valuable living artist of those who had no
auction sale record in 2011 within Skate’s Top 5000
pricing range (over $2 million per artwork)
through the availability of price records and
historical investment returns data.
Art Market Liquidity Amid a Chinese Bubble?
The total volume of premium segment art
transactions in 2011 was $4.3 billion and represents
a remarkable 18.7% trading volume increase within
Skate’s Top 5000 category in 2010. Increased trading
4

in high-end Chinese art was a primary driver for this
volume increase in 2011; art produced by Chinese
artists comprised a full 50% of trading within Skate’s
Top 5000 price range (above $2 million per artwork).
Zhang Daqian tops the list, and Wu Guanzhong is
rapidly gaining appreciation (see Table 4 for more
details).
As shown in Table 5, five out of the ten artists with
the biggest 2011 increase in their market
capitalization in Skate’s Top 5000 (aggregate value of
auction prices paid for their artworks included in Top
5000) were Chinese.
Early in 2011 Skate’s was the first to point out the
rapid formation of a deep and very speculative
market for Zhang Daqian’s art, as Daqian in literally
no time became the 20 th most valuable artist in our
ranking (see Skate’s Market Notes, April 18, 2011). In
2011, his sales volumes tripled compared to 2010,
and he became the most actively traded (by number
of works) artist in the global art market’s high-end
price range, with 54 artworks sold at auction at or
above $2 million per work. In dollar terms, this was
enough to put Zhang Daqian right behind the world’s
dominating duo of Picasso and Warhol as the world’s
most traded artists with a total value of auction sales
in Skate’s Top 5000 price range of $247.9 million for
2011 alone. And, if this is not enough, Zhang Daqian
gained more value in his Top 5000 representation in
dollar terms than any other artist in 2011, overtaking
Picasso and Warhol by this measure as a significant
number of their artworks exited Skate’s Top 5000
during the year (see pgs. 12-13 for more).
Zhang Daqian was not the only Chinese artist to
make a splash in 2011. Qi Baishi scored the record
auction sale for 2011 when his painting Eagle
Standing on Pine Tree sold for $65.5 million and
became the 15 th most expensive artwork of all time
to be sold at auction. The third most frequently
traded artist this year in terms of number of
artworks sold at Skate’s Top 5000 prices was Wu
Guanzhong. The artist passed away in June 2010 at
the age of 90, an event which set a speculative
bubble in motion, comparable in zeal to the Daqian
frenzy. In 2011 alone, there were 27 new entries of
his artworks to Skate’s Top 5000 with an overall
volume of $141 million. The most valuable painting
by Wu Guanzhong is Ten Thousand Miles of the
Yangtze River, which was sold for $23.5 million in
Beijing at an obscure local house—A&F Auction—on
November 19 of this year. Wu Guanzhong is now
ranked as the 44 th most valuable artist by Skate’s,
right after Cy Twombly who passed away this year
(as did Lucian Freud, another major contemporary
artist—currently ranked as the 30 th most valuable
artist after his exit from the living artist category this
year).
Given the significant losses of living artists in the top
tier category, Gerhard Richter’s dominance of the
segment only solidified in 2011. Richter’s ascent was
relentless, with price records being achieved
throughout 2011. Like Picasso, Richter saw 26 of his
paintings sold in Skate’s Top 5000 category (and
unlike Picasso, he actually was able to watch that
this year); seven of these were repeat sales. The
resulting market capitalization increase of $147.4
million moved him even further away from his
contemporaries as the most valuable living artist
today, and positioned him as the 14 th most valuable
artist of all time, right below William de Kooning and
above Fernand Léger. Richter’s Abstraktes Bild series
made a major contribution to the growth of his
market capitalization, including his record painting
sale for $20.8 million in November of this year (a
detailed analysis of the Abstraktes Bild series was
presented in Skate’s October Report).
Finally, we must note the exceptional liquidity of
Warhol, Monet, Picasso, and Richter as the market
leaders by number of repeat sales within Skate’s Top
5000 price range—artists whose works offer a
striking contrast between liquidity (established
names) and speculative volumes spikes (Chinese
names for which repeat sales happen far less often).
5

Table 4 Ten Most Active Artists by Number of Artworks Traded Within Top 5000 Price Range
Artist
Number of
Transactions in
2011
Artist
Trading Volume
in 2011, USD
Artist
Number of
Repeat Sales
in 2011
Zhang Daqian 54 Andy Warhol 282,616,663 Andy Warhol 9
Andy Warhol 34 Pablo Picasso 278,385,966 Claude Monet 8
Wu Guanzhong 27 Zhang Daqian 247,861,601 Pablo Picasso 7
Pablo Picasso 26 Gerhard Richter 170,900,498 Gerhard Richter 7
Gerhard Richter 26 Francis Bacon 143,616,052 Jean-Michel Basquiat 4
Fu Baoshi 16 Wu Guanzhong 141,074,649 Alexander Calder 4
Qi Baishi 14 Qi Baishi 131,567,273 Fernand Léger 3
René Magritte 13 Clyfford Still 112,807,500 René Magritte 3
Zao Wou-Ki 13 Xu Beihong 72,051,690 Alberto Giacometti 3
Jean-Michel Basquiat 12 René Magritte 69,527,470 Zhang Daqian 3
Source: Skate’s Art Market Research
Table 5 Biggest Changes in the Artists’ Market Capitalization of Skate’s Top 5000 in 2011
Artist
Total Volume
in Skate’s Top
5000, USD
2011 2010
Market Cap Growth
in Skate’s Top 5000,
USD
Artist
Total Volume in
Skate’s Top
5000, USD
Market Cap Growth in
Skate’s Top 5000 (31-
May-10 to 31-Dec-10),
USD
Zhang Daqian 348,764,582 265,025,731 Andy Warhol 1,285,991,395 178,896,059
Andy Warhol 1,487,446,640 201,455,245 Amedeo
Modigliani
640,640,637 118,287,114
Pablo Picasso 3,079,450,342 199,939,770 Pablo Picasso 2,879,510,572 84,154,842
Qi Baishi 196,144,190 161,227,337 Henri Matisse 798,992,611 81,139,039
Gerhard
Richter
504,304,381 147,381,744 Roy Lichtenstein 343,765,381 76,448,454
Wu Guanzhong 165,903,289 139,041,878 Zhang Daqian 83,738,851 70,037,426
Francis Bacon 872,327,719 133,696,100 Gerhard Richter 356,922,636 44,140,904
Clyfford Still 161,872,500 108,976,000
Joseph Mallord
William Turner
153,891,556 43,251,453
Xu Beihong 126,177,798 71,426,086 Xu Beihong 54,751,712 33,365,294
Wang Meng 86,830,323 62,118,990
Source: Skate’s Art Market Research
Sir Lawrence
Alma-Tadema
43,103,348 33,170,000
6

Table 6 Ten Most Valuable Artists in Skate’s Top 5000 (as of December 30, 2011)
Artist
2011 2010
Total Volume in
Skate’s Top 5000, USD
Artist
Total Volume in
Skate’s Top 5000, USD
Pablo Picasso 3,079,450,342 Pablo Picasso 2,879,510,572
Claude Monet 1,499,676,670 Claude Monet 1,490,411,425
Andy Warhol 1,487,446,640 Andy Warhol 1,285,991,395
Francis Bacon 872,327,719 Henri Matisse 798,992,611
Henri Matisse 809,719,353 Francis Bacon 738,631,619
Alberto Giacometti 692,370,280 Pierre-Auguste Renoir 705,763,264
Pierre-Auguste Renoir 679,480,108 Paul Cézanne 671,806,902
Paul Cézanne 675,024,147 Alberto Giacometti 662,775,287
Amedeo Modigliani 649,602,657 Vincent van Gogh 641,473,627
Vincent van Gogh 635,416,127 Amedeo Modigliani 640,640,637
Source: Skate’s Art Market Research
7

Table 7 Top Five Auction Prices Paid in 2011
Top 5 Artworks Sold in 2011
Artist Qi Baishi Wang Meng Clyfford Still Roy Lichtenstein Francesco Guardi
Title
Medium Painting
Eagle Standing on
Pine Tree
Landscape 1949-A-No. 1
Ink and color
on paper
Oil on canvas
I can see the whole
room!... and
there's nobody in
it!
Oil and graphite on
canvas
Venice, a view of the Rialto
Bridge, looking north (from
The Fondamenta del
carbon)
Oil on canvas
Size, cm 265.9 x 100.1 119.9 x 54.1 236.2 x 200.7 121.9 x 121.9 119.9 x 203.7
Auction
House
Auction
Date
Estimate,
USD
Premium
Price, USD
China Guardian
Auctions
Poly
International
Auction
Sotheby's Christie's Sotheby's
22-May-11 04-Jun-11 09-Nov-11 08-Nov-11 06-Jul-11
- -
25,000,000-
35,000,000
35,000,000-
45,000,000
65,532,111 62,118,990 61,682,500 43,202,500 42,913,160
Source: Skate’s Art Market Research
Investment Potential of Art in Skate’s Top
5000: ERR Results of 2011
In the previous section, we discussed general art
market indicators that provide evidence of the
market’s continued strength, at least in its high-end.
Further analysis will focus on repeat sales within
Skate’s Top 5000 and the investment returns they
have produced throughout the year.
In 2011, there were a total of 119 repeat sales that
entered Skate’s Top 5000, producing an average
annualized effective rate of return (ERR) of 7.20%.
The average holding period in 2011 declined by one
year over 2010 to 8.4 years, meaning that collectors
are becoming more willing to consign works to
24,111,000-40,185,000
auctions. The same three artists as last year saw the
highest number of repeat sales: Andy Warhol,
Claude Monet and Pablo Picasso. These artists,
however, are not found in the list of the highest
weighted average ERR results in Skate’s Top 5000
that appears at the end of this section. Their
frequent appearance on the market—as opposed to
outliers that occasionally bring high results—signifies
blue chip status providing more modest but still
positive and stable returns and symbolizing the
value-preservation quality of Warhol, Monet and
Picasso art.
Stable and positive returns on repeat sales are a
strong selling point for Gerhard Richter, an artist
whose works regularly appear on the market,
8

including as repeat sales. On average, his works have
generated a 23% return to owners after an average
holding period of six years, once again confirming
the attractiveness of contemporary art provided by
the artists who will enjoy the highest value creation
potential during their lifetime.
Table 8 Repeat Sales Data: 2011 vs. 2010
Zhang Daqian had three repeat sales, all of which
generated double-digit returns (27% on average) and
helped to heat the market for his art; Daqian is the
Chinese artist with the most repeat sales within
Skate’s Top 5000.
Source: Skate’s Art Market Research
*This figure indicates the number of repeat sales that occurred only throughout the stated year. It also serves as a
basis for two of the following criteria: holding period and ERR.
**The general benchmark that considers all previous ERR results in Skate’s Top 5000 up to the stated date.
Table 9 Ten Most Liquid Artists (Greatest Number of Repeat Sales by Years)
2011 2010
Artist Number of Repeat Sales in 2011 Artist Number of Repeat Sales in 2010
Andy Warhol 9 Andy Warhol 11
Claude Monet 8 Pablo Picasso 6
Pablo Picasso 7 Claude Monet 5
Gerhard Richter 7 Henri Matisse 5
Jean-Michel Basquiat 4 Fernand Léger 4
Alexander Calder 4 Jean-Michel Basquiat 4
Fernand Léger 3 Auguste Rodin 3
René Magritte 3 Gerhard Richter 3
Alberto Giacometti 3 René Magritte 3
Zhang Daqian 3 Alexander Calder 2
Source: Skate’s Art Market Research
Indicators 2011 2010
Total number of repeat sales * 119 117
Average holding period, years 8.4 9.4
Weighted average ERR for repeat sales of the year, annualized % 7.20 7.13
Overall Top 5000 weighted average ERR, annualized % ** 4.82 4.24
9

Table 10 Five Best Exits from Art Investments in 2011
Artist Fu Baoshi Zao Wou-Ki
Title Lady in Solitude 2. 11. 59.
Top 5 Best ERR Results in 2011
Chu Teh-Chun (Zhu
Dequn)
Composition no.
143
Gerhard Richter Sigmar Polke
Abstraktes Bild Untitled
Date of sale 05-Apr-11 28-May-11 26-Nov-11 09-Nov-11 09-Nov-11
Initial investment, USD 262,830 600,000 776,724 1,248,000 258,068
Holding period, years 3 4 2 6 6
Exit price, USD 1,932,217 4,648,096 1,925,913 12,500,000 1,850,000
ERR, % 93.82 65.80 56.57 42.18 40.48
Source: Skate’s Art Market Research
The domination of Chinese artists is particularly
noteworthy when looking at the ERR results of 2011
in Table 10. While last year only one representative
of China resided among the artists with the highest
results (Two Pigs by Xu Beihong, which brought a
34.84% ERR), this year Chinese artists occupied the
top three places in the rating. Notably, the very
short holding period that usually prevents artworks
from realizing their full investment potential did not
affect the sales results of paintings by Fu Baoshi, Zao
Wou-Ki and Chu Teh-Chun; on average, these
produced returns of 72%. Short holding periods,
insane ERRs and a limited number of repeat sales
records are all the signs of the speculative nature of
the Chinese art market, reminding us once again that
financial wisdom requires us to expect significant
risks wherever there are high returns.
Gerhard Richter is presented in the list of the highest
ERRs for the second year in a row as his Abstraktes
Bild painting garnered a return of 42.18%. Last year,
though, a work from the same period achieved an
even higher return of 45.58%.
The fifth artist in the list above is Sigmar Polke, the
modernist painter who passed away in June 2010 at
the age of 69. Previously, he had only two paintings
that sold above $2 million, but in 2011 the art
market saw an increased supply of his works in
accordance with a typical post-mortem spike in
market activity. As a result, Skate’s Top 5000 saw
eight new entries by Polke in 2011. One of the
paintings—Untitled—was a repeat sale that sold
above the high estimate and generated an
annualized ERR of 40.48%, the artist’s first repeat
sale benchmark in the high-end price category.
Table 11, showing the five worst returns produced
by repeat sales of works in 2011, demonstrates how
unfortunate timing can destroy the value of one’s art
investment, with works by Roy Lichtenstein and
Andy Warhol being the most striking examples.
While their paintings continue to bring some of the
highest prices on the market, and both artists are
very liquid in the high-end price category, the
combination of wrong timing and massive irrational
premium paid at purchase created the basis for
10

humiliating returns. In 2010, Lichtenstein was
already on this list of worst returns after his Modern
Painting with Fishes produced an ERR of -10%. This
year, the outcome was even worse: the painting Still
Life with Mirror generated the lowest return (-
18.3%) after a 3-year holding period. These data
points speak not so much about “problems” with
Lichtenstein’s market but rather epitomize the
irrational premium that Lichtenstein’s iconic art can
command, affecting less experienced art investors
that are not trained (or prepared) to accept a longer
investment horizon when making significant
purchases of modern art.
Andy Warhol’s market experienced a noteworthy
negative benchmark when Rorschach (in 2 parts)
generated an ERR of -14.65% and set the record for
Table 11 Five Worst Investments in Art Realized in 2011
Artist
Title
Roy
Lichtenstein
Still Life with
Mirror
Top 5 Worst ERR Results in 2011
Andy Warhol
Rorschach (in 2 parts)
the worst return on a Warhol investment made
within Skate’s Top 5000 price range.
The painting by Lucas Cranach (The Younger) also
illustrates a vivid example of art investment rules.
Purchased at a record price, the painting was quickly
returned to the market last year and, of course,
failed to find a buyer on such short notice. This past
month there was a second attempt to sell the
painting at Sotheby’s, which, while successful,
brought an unfortunate loss of -14.46%.
Skate’s views the markets of the two other artists in
this rating—Tom Wesselmann and Eva Hesse—as
still too undeveloped to draw any firm conclusions
today.
Lucas Cranach (The
Younger)
Portrait of a lady,
three-quarter length,
in a green velvet and
orange dress and a
pearl-embroidered
black hat
Tom
Wesselmann
Great American
Nude no.21
Eva Hesse
Untitled (Bochner
compart)
Sale date 12-May-11 28-Jun-11 07-Dec-11 11-May-11 08-Nov-11
Initial
investment,
USD
Holding
period, years
9,599,371 5,417,000 3,655,348 4,114,500 3,064,000
3 4 4 2 4
Exit price, USD 5,800,000 3,096,724 1,858,516 2, 900,000 2,350,000
ERR -18.13% -14.65% -14.46% -13.60% -6.06%
Source: Skate’s Art Market Research
11

Table 12 All Time ERR Records (Based on Repeat Sales within Skate’s Top 5000)
Artist
2011 2010
Weighted Average
ERR, % *
Artist
Weighted
Average ERR, %
Isamu Noguchi 190.20 Isamu Noguchi 190.20
Frans Hals I 114.25 Yue Minjun ** 147.16
Auguste Rodin 81.64 Frans Hals I 114.25
Zao Wou-Ki 65.80 Auguste Rodin 89.72
Fu Baoshi 64.63 Damien Hirst 53.77
Chu Teh-Chun (Zhu Dequn) 56.57 Francis Bacon 51.60
Damien Hirst 53.77 Master of the Legend of Saint Barbara 46.38
Francis Bacon 48.45 Tom Wesselmann 42.87
Sigmar Polke 40.48 Isaak Ilych Levitan 38.05
Fang Lijun 39.71 Boris Mikhailovich Kustodiev 37.51
Source: Skate’s Art Market Research
*This indicator shows the weighted average ERR results of artists, including all of their repeat sales up to the stated
year.
** This related artwork left Skate’s Top5000 as its auction price is now below the threshold price for Skate’s Top 5000
peer group.
Table 13 Female Artists in Skate’s Top 5000
# Artist Market Cap, USD
Volume in 2011,
USD
Number of
Repeat Sales
Weighted
Average ERR, %
1 Joan Mitchell 87,397,339 14,333,000 7 27.16
2 Natalia Sergeevna Goncharova 71,266,185 12,723,002 1 30.55
3 Tamara de Lempicka 60,620,404 19,875,404 5 12.99
4 Mary Cassatt 41,341,500 0 1 -0.07
5 Louise Bourgeois 39,842,193 15,367,500 0 -
6 Georgia O'Keeffe 37,674,000 4,981,000 2 5.75
7 Agnes Martin 24,973,500 0 0 -
8 Eva Hesse 13,956,698 2,714,500 2 -5.16
9 Frida Kahlo 13,874,250 0 0 -
10 Irma Stern 11,507,521 7,753,119 0 -
Source: Skate’s Art Market Research
Column #1 shows the rank of female artists in Skate’s Top 5000
Column #3 shows Market Capitalization in USD and reflects the aggregate value of Top 5000 works in nominal values
Column #4 shows 2011 trading volume on the auction market in USD (only for artworks eligible for entry into Skate’s Top
5000 in terms of market value)
Columns #5-6 show the number of repeat sales and ERR (weighted average effective rate of return, annualized, %) based on
historical statistics of the artist’s repeat auction sales (brackets reflect negative returns).
12

At the end of 2011, we can see that the world of
female artists in Skate’s Top 5000 remains small but
quite diverse. This year almost every member of this
rating showed some unique activity. Joan Mitchell
once again topped the rating in terms of overall
volume in Skate’s Top 5000, although 2011 saw
other female artists showing significantly higher
activity in comparison to 2010. As a result, Mitchell
ranked only third by trading value in 2011, achieving
$14.3 million in volume. The most valuable artist of
the year was Tamara de Lempicka, whose five
entries to Skate’s Top 5000 brought $19.9 million.
Born in Moscow as Maria Gorska from Polish
parents, married in St Petersburg, Russia and raised
as an artist in France, Tamara de Lempicka
represents one of the very appealing stories for a
growing contingent of Russian, Polish and female art
buyers, making her a name to watch in the coming
years.
Second place in market activity in 2011 belongs to
Louise Bourgeois, an artist who passed away in May
2010 and is thus going through the same postmortem
market spike as the markets for Wu
Guanzhong and Sigmar Polke described above. Her
three works generated particular interest and
brought a volume of $15.4 million.
Russian painter Natalia Sergeevna Goncharova
remained the world’s second most expensive female
artist; her two sales that entered Skate’s Top 5000
sold at prices significantly above their pre-auction
estimates and added $12.7 million to her record in
Skate’s rating. This year no repeat sales of works by
Goncharova took place, so she still has only one
repeat sale record, which brought an ERR of 30.55%
in 2008.
Leaving Skate’s: Value Reductions and Exits
In this section of the report, we focus on the artists
and works that were challenged by the new inflow of
more expensive art and as a result were forced out
of Skate’s Top 5000. As we noted at the beginning of
the report, the trading volume of 2011 significantly
exceeded that of 2010, which meant a substantial
number of lower value artists had to step aside to
make room for more valuable entries. In 2011,
Skate’s Top 5000 lost 59 artists, nearly double the
figure for the previous year. Seven of these names
were living artists.
It is worth noting that the artists who gained the
most value this year at the same time saw the
greatest number of works drop out of Skate’s Top
5000. Pierre-Auguste Renoir, Claude Monet and
Pablo Picasso were most affected by this trend,
losing 19, 14 and 13 works, respectively. The lost
volume seen by these three artists proved to be
even more of a disappointment.
Poor performance was also demonstrated by Camille
Pissarro. Given that he only had one entry to Skate’s
Top 5000 in 2011—L'Hermitage en été, Pontoise sold
for $4.3 million—the loss of $17.5 million
significantly affected his market capitalization.
Finally, there were no auction records above $2
million for works by Damien Hirst. Instead, eight of
his artworks were ousted from Skate’s Top 5000,
thus reducing his overall volume by $15.4 million.
Table 14 Revolving Door: Artists Represented in Skate’s Top5000 of Artworks by Auction Prices
Top 5000 Benchmarks 2011 2010
Number of Artists Eliminated 59 32
Number of Living Artists Eliminated 7 3
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Table 15 Top 10 Losers: Artists with the Greatest Reduction in Value and Number of Artworks (as
Represented in Skate’s Top 5000)
Artists with Greatest Reduction in Number of
Works in Skate’s Top 5000
Artists with Greatest Reduction of Value of Works in
Skate’s Top 5000
Pierre-Auguste Renoir -19 Pierre-Auguste Renoir -26,283,155
Claude Monet -14 Camille Pissarro -17,500,748
Pablo Picasso -13 Damien Hirst -15,361,701
Roy Lichtenstein -10 Jean Dubuffet -13,849,117
Camille Pissarro -10 Sir Alfred James Munnings -12,653,516
Damien Hirst -8 Giovanni Giacometti -10,268,878
Jean Dubuffet -7 Canaletto -10,100,906
Edgar Degas -6 Franz Kline -9,169,000
Georges Braque -6 Jasper Johns -8,202,000
Sir Alfred James Munnings -6 Georges Seurat -8,061,829
Source: Skate’s Art Market Research
Table 16 Top 10 Artists by Market Capitalization without Sales Records in 2011 (in Skate’s Top
5000 Price Range)
Artists with No Auction Sale Record in
Skate’s Top 5000
Artists with No Repeat Sale Record in
Skate’s Top 5000
Living Artists with No Auction Sale Record
in Skate’s Top 5000
Vincent van Gogh 635,416,127 Henri Matisse 809,719,353 Jasper Johns 198,553,750
Jasper Johns 198,553,750 Paul Cézanne 675,024,147 Damien Hirst 174,174,487
Piet Mondrian 193,716,295 Vincent van Gogh 635,416,127 Frank Stella 33,060,000
Canaletto 177,588,210 Mark Rothko 596,578,710 Brice Marden 21,603,000
Damien Hirst 174,174,487 Edgar Degas 473,854,149 Frank Auerbach 18,788,573
Yves Klein 172,767,231 Gustav Klimt 415,319,676 Cai Guo Qiang 16,830,722
Rembrandt Harmensz
van Rijn
158,700,933 Paul Gauguin 390,043,592 Bruce Nauman 16,111,000
Edvard Munch 156,866,282 Egon Schiele 288,983,445 Chuck Close 13,887,500
Juan Gris 154,358,291 Jeff Koons 280,881,985 Bridget Riley 10,195,514
Joseph Mallord William
Turner
151,931,032 Camille Pissarro 210,096,861 Marlene Dumas 9,672,127
Source: Skate’s Art Market Research
14

Table 17 Most Valuable Living Artists (Based on Representation in Skate’s Top 5000)
Rank of
Living Artists
Artist
Rank among All
Artists in Top 5000
Market Cap* , USD
Age as of
30-Dec-11
1 Gerhard Richter 14 504,304,381 79
2 Jeff Koons 24 280,881,985 56
3 Jasper Johns 26 198,553,750 81
4 Damien Hirst 37 174,174,487 46
5 Zao Wou-Ki 66 101,085,800 90
6 Richard Prince 67 97,519,263 62
7 Zhang Xiaogang 80 78,827,011 53
8 Peter Doig 82 72,224,924 52
9 Zeng Fanzhi 86 70,674,819 47
10 Ed Ruscha 116 43,377,678 74
Source: Skate’s Art Market Research
*Aggregate value of artworks by the artist in Skate’s Top 5000 by historical auction prices paid
This past July, the art world lost two highly
important artists—individuals who throughout their
lives achieved enormous professional and social
recognition and saw their works command price
records at auction. Both were among the 10 most
valuable artists on the market, although since the
news of their death, the art market has yet to show
a notable reaction. Lucian Freud has not seen any
Table 18 Skate’s Top 5000 Living Artists Who Passed Away in 2011
Artist Date of Birth Date of Death Age
subsequent sales record since and now ranks as the
30 th most valuable artist in Skate’s Top 5000. Cy
Twombly has had two signature works sell at auction
and appear in Skate’s Top 5000—Untitled and
Untitled (Lexington, Virginia). These works sold
above their estimates and added $14.3 million in
value to his record.
Market Cap at
Death, USD
Market Cap 30-
Dec-11, USD
Lucian Freud 08-Dec-22 20-Jul-11 89 211,992,811 211,992,811
Cy Twombly 25-Apr-28 05-Jul-11 83 126,476,319 140,753,319
Source: Skate’s Art Market Research
15

Skate’s Art Stocks Review
Global Art Industry: Affected by Economic Uncertainty in 2011, Art Stocks Lose on Average 15% in
Value
Skate’s provides ongoing coverage of the global art
industry on its website and blog, and Table 19
summarizes the share performance data for all listed
companies worldwide that derive most of their
economics from servicing the art industry or
managing art assets. 2011 was the worst year since
2008, with Skate’s Art Stock Index, the only
benchmark for the industry, shedding 15% of its
value. Against this backdrop, the performances of
Artprice, Abbey and Noble look very impressive and
have been detailed in Skate’s reporting during the
year (see archive of Skate’s Market Notes). Over the
longer term, however, global art industry shares
continue to outperform the S&P 500 as shown in the
chart below.
Table 19 Skate’s Art Stock Index (Global Art Industry Performance) in 2011
Name
Listing/
Currency
December
2011
Performance
YTD 2011
Performance
Price as of
December
23 2011, $
Market Cap as of
December 23
2011, USD mln
All Values are in USD
52-wk
High, $
52-wk
Low, $
Sotheby’s NYSE/ USD -7.6% -35.5% 29.01 1959.60 55.67 25.00
Artprice Paris/ EUR 15.7% 328.2% 50.85 325.26 84.81 10.46
Artnet Frankfurt/ EUR 11.9% -25.9% 5.22 29.40 11.50 4.15
Collectors’
Universe
NASDAQ/USD 2.4% 3.5% 14.39 113.62 18.80 11.59
Mallett London/ GPB 5.1% 8.9% 1.14 15.69 1.24 1.00
Art Vivant Tokyo/JPY 0.6% -23.1% 2.29 35.43 3.21 2.28
Seoul Auctions Seoul/WON -9.6% -42.5% 2.36 39.92 4.19 2.25
Shinwa Art
Auction
Tokyo/JPY 2.3% 4.9% 396.80 23.01 1 028.46 358.94
Stanley
Gibbons
London/GBP -0.1% 1.0% 2.58 64.94 3.28 2.36
MCH Group Zurich/CHF 5.3% -17.8% 41.68 215.80 55.12 38.11
Abbey House Warsaw/PLN -3.9% 255.4% 4.82 48.94 7.40 1.31
Noble
Investments
London/GBP -1.3% 35.4% 2.61 40.46 2.92 1.92
Fotoeffect Moscow/RUB -1.2% -7.9% 16 345.2 459.78 18 531.0 16 345.2
Skate’s Art
Stocks Index
Skate's
-3.2% -15.0% 174.7 3 371.85 241.8 157.4
Investable Art
Stocks Index
-1.1% - 78.8 2 679.21 100 68.2
Source: Skate’s Art Market Research

Global Art Industry Still Outperforms S&P 500 over Longer Term
400
350
300
250
200
150
100
50
0
Sotheby's
Art stocks Index
S&P 500
Table 20 Skate’s Art Stock Index: Historical Performance
Metric 2005 2006 2007 2008 2009 2010 2011 *
SASI Index value as of December 31 109.6 150.9 172.0 66.4 114.8 205.4 175.0
Year performance, in points - 41.3 21.1 -105.7 48.5 90.6 -30.4
Year performance, in % - 37.7% 14.0% -61.4% 73.0% 78.9% -14.8%
S&P 500 year performance, in % - 13.6% 3.5% -38.5% 23.5% 12.8% 0.6%
Number of stocks as of Dec 31 11 11 11 12 12 11 13
Year trading volume (USD, mln) - 17,676.8 27,781.6 20,602.2 6,122.0 13,206.2 13,490.7
Market cap as of 31-Dec, (USD, mln) 2,099.2 2,889.7 3,294.1 1,270.6 2,198.5 3,921.5 3,378.5
Source: Skate’s Art Market Research
*Data as of December 27, 2011
17