The Art Market Enters an Unprecedented Golden Age: Investment Philosophies of Renowned Collectors
Unfazed by clouds obscuring the view, staying away from the noise to explore hidden treasures.
Starting bid at 88 million yuan, then reaching 100 million, and finally closing at a staggering 425.5 million yuan. After nearly 50 rounds of bidding, Qi Baishi's largest-scale work "Pine and Cypress Towering Picture & Seal Script Couplet" set a new record for modern Chinese paintings. The Chinese art market has entered the "hundred-million era." During the Dragon Boat Festival holiday, the Chinese art auction market saw one "crazy" scene after another, signaling an unprecedented peak in the art market.
Currently, art investment has become the third major investment category alongside stocks and real estate. Is the return on investment in the art market high and stable? Is there overvaluation due to speculation? What are the considerations behind the rise in art investment? Renowned Guangdong collector Lin Zhuhua summarized three points: If you have surplus financial resources, if you possess insight and courage, and if you can seize opportunities, then cultural relic collection, appreciation, and investment is the best choice in a peaceful society.
The Collection Market Continues to Heat Up
Lin Zhuhua sees great potential in Hetian jade investments.
In Lin Zhuhua's view, any artwork has its inherent value; excessive speculation can lead to severe price deviations, violating economic laws. Therefore, the professional field of collecting is not suitable for ordinary investors. Currently, art investment has become the third major investment category alongside stocks and real estate. Does the art market suffer from overvaluation due to speculation? In Lin Zhuhua's opinion, the overall accumulated risks in the art collection market have become significant. Whether it be jadeite or rosewood, prices have reached dangerous levels. So, what kind of collection is still suitable for investment at this stage? "Gold has a price, but jade is priceless." In Lin Zhuhua's eyes, China's "national stone," Hetian jade, still has room for growth due to its scarce resources, especially top-grade Hetian jade, which is rare and highly sought after by collectors who store it away, waiting for the right price.
In recent years, the trend in jade collection has shifted, with modern jade artifacts, once considered unworthy of high regard, now shining brightly. In the auction market, some modern jade pieces' transaction prices even surpass those of antique jade artifacts. Known as the "King of Soft Jade," Hetian mutton-fat jade has not seen any price decline in the past dozen years. It was priced at 80 yuan per kilogram in 1965, 15,000 yuan per kilogram in 1995...now, the price per gram is comparable to the original price per kilogram. An investment return of ten thousand times over more than a decade is indeed tempting. Lin Zhuhua, who has been deeply involved in jade for a long time, joked that in the 1990s, he would buy Hetian jade in Xinjiang by the sack or even by the carload. However, since the national government explicitly banned the use of large machinery to dig for Hetian jade in 2007, seed jade prices have skyrocketed. In the past two years, a small portion of Hetian jade has increased by 100 times, while most have increased by three to five times. Due to domestic demand and mining over the past decade, limited resources of Hetian jade are almost depleted. "It's now very hard to find genuine Hetian jade in the market," and the best Hetian jade remains rare, stored away by collectors waiting for the right price.
Even though it may be hard to come by, when asked about his most favored investment, Lin Zhuhua unhesitatingly crowned Hetian jade. "Although Hetian jade resources are scarce and prices have soared, compared to calligraphy and paintings, ceramics, and other artworks, jade prices are still relatively low." Now, a master-level jade carving made from precious raw materials costs only hundreds of thousands of yuan, while a purple clay teapot priced at over ten thousand yuan could, through commercial brokers' manipulation, be hyped up to 300,000 to 400,000 yuan, or even millions. However, there are significant differences between Hetian jade and purple clay. Purple clay clay is not scarce, and even masterpieces can be easily replicated; whereas jade raw materials are scarce. When a vein produces a batch of raw materials, once mined out, these materials and their carved jade artifacts become unique items.
So, what kind of Hetian jade is worth investing in? Lin Zhuhua indicated that when Hetian jade was not yet widely recognized, people generally bought jade raw materials, but purchasing them poses great difficulty and risk, as even buying good material carries uncertainties and risks during the commissioned processing phase. Good Hetian jade, apart from natural attributes, also requires cultural connotations and craftsmanship.
Lin Zhuhua, self-styled Xingchunzhujuzhu and Shangcixuanzhu, was born in March 1943 in Guangzhou. His ancestral home is in Tiantou Village, Taishan City, Guangdong Province. Since childhood, under family guidance, he developed a love for ancient and modern artworks. He is a researcher at the Guangzhou New Century Art Research Institute, a member of the Professional Technical Committee of the Guangdong Collectors Association, deputy editor of the Guangdong Collector magazine, vice president of the Guangzhou Calligraphy and Painting Art Appreciation Exchange Society, and vice president of the Haizhu and Yuexiu Collectors Association. He studied under famous scholars and experts such as Rong Geng, Shang Chengzuo, Geng Baochang, and Su Gengchun, laying a solid foundation for the appreciation of ancient ceramics, ancient jade, and ancient calligraphy and paintings.
Entering the art market, investors are most concerned about counterfeiting. Lin Zhuhua agrees strongly with this concern.
Is It a Stone or a Diamond?
Trust Your Own Judgment
"Even experts aren't entirely reliable," Lin Zhuhua said when discussing the issue of authenticity. Especially with Hetian jade seeds, which are high-priced and scarce, artificial seeds and "fake skins" are everywhere. In some places, making fake seeds and applying false skins has become an industry, and even some seasoned collectors might make mistakes.
During the interview, Lin Zhuhua recounted a little story. A collector from Zhuhai claimed, "My official kiln porcelain is prettier than what's in museums." Lin Zhuhua asked, "How do you buy official kiln porcelain?" He replied, "I just make a phone call, and they immediately bring me two big baskets of official kiln porcelain to choose from..."
For investors with some experience, Lin Zhuhua believes, "Trust your own judgment." One of Lin Zhuhua's proudest collections, the "Song-Yuan Ge Kiln Moon-White Glaze Circular Water Washer," came from his keen eye. "A collector named Zhan found me and said he had a plate, and everyone thought it was fake, priced between 500 and 5,000 yuan, asking me to take a look," talking about the origin of this "treasure," even after more than twenty years, Lin Zhuhua was still excited. "As soon as I saw it, my heart leapt. I knew it was definitely something good, so I told him to let me borrow it for one night and return it the next day." After examining it for an afternoon and a whole night, Lin Zhuhua confirmed it was genuine and purchased it for 60,000 yuan, causing a sensation in the entire collecting community at the time. "After buying it, many collectors still didn't think highly of it, believing it to be a modern imitation or a late Qing imitation. However, after being appraised by renowned celadon expert Song Boqian, it was identified as a Yuan Dynasty Ge Kiln water washer passed down through generations." This piece, originally purchased for 60,000 yuan, is now valued at over ten million yuan.
This story also reflects another of Lin Zhuhua's investment insights: observe more. According to him, the main reason why many famous collectors "misjudged" was because they hadn't personally touched or experienced genuine Song-Yuan Ge Kiln ware. Lin Zhuhua had early seen true Ge Kiln ware at the Palace Museum, "At first glance, I knew it was real, with its style and characteristics perfectly matching those of Song-Yuan Ge Kiln ware."
Observing more also offers another advantage: "You know where the genuine item is, so when you see something similar, you naturally know it's a fake."
"Greed for Small Gains" is a Big Taboo
Buying Fakes is Buying Experience
"For example, if a collectible should cost tens of thousands of yuan, and now it can be bought for hundreds, can it possibly be real?"
"Some citizens invest in collectibles with a gambling mentality, hoping to get rich overnight with a certain item, but they don't really understand the field or only know a little, resulting in spending huge sums on mostly fake or high-quality imitations, leading to losses."
Even seasoned collectors like Lin Zhuhua occasionally buy fakes today. In his view, "Greed for small gains" is a big taboo for investors. "For instance, if a collectible should cost tens of thousands, and now it can be bought for hundreds, can it possibly be real?"
However, in Lin Zhuhua's optimistic view, buying fakes is like paying tuition, but the tuition must be worth it. "Never sell a fake as if it were real. After buying, carefully study its flaws, even if you know it's fake, analyze why it managed to deceive people," Lin Zhuhua took out a small incense burner he bought for 300 yuan, "The genuine version costs 8 million yuan. I knew it was fake at the time, but buying it for a few hundred yuan to study and avoid future scams is worthwhile."
For newcomers to the field, they should act within their means based on their financial situation, start simple and gradually advance from basic to advanced collections, seek advice from experts, gain some knowledge and market trends, improve their collection appreciation skills, and then move towards collecting masterpieces.
Interview Notes
Relaxed Stories Illuminate the Essence of Collection
Let Go When Prices Are Too High
"There was a professor who highly regarded one of his students, believing the student would surely become great, but the student himself didn't realize his own worth. The professor gave the student a diamond, telling him to sell it on the street for at least 200,000 yuan. But the student stood on the street all day without anyone buying it. The next day, the professor asked him to try at a pawnshop. The next day, the student returned excitedly, saying the pawnshop offered 300,000 yuan! The professor smiled and told the student, 'You are this diamond! Just no one knows your worth yet.'" At the end of the interview, Lin Zhuhua told the reporter a seemingly unrelated story about collection investment, which was quite thought-provoking. For collection investment, perhaps it's like stock trading; during the "appreciation" process, one must endure solitude until the value truly manifests.
Interestingly, this story mirrors a grand event recently in the collection world. To stock investors, Liu Yiqian is a legendary figure, known as the king of legal shares and the king of additional issuance shares; however, in recent investment markets, his more famous move has been purchasing large quantities of artworks. Yet, in this year's spring auction, Liu Yiqian, who usually only buys and never sells artworks, did sell. In China Guardian's 2011 Spring Auction, Qi Baishi's largest-scale work "Pine and Cypress Towering Picture & Seal Script Couplet," starting at 88 million yuan, went through nearly 50 intense bids and was finally acquired by a collector for 425.5 million yuan, setting a new record for modern Chinese paintings. And the seller of this work was Liu Yiqian, who originally purchased it for less than 20 million yuan.
When asked why he held onto the stock until such a high position, he explained: "At that time, stocks were a rare commodity. With so many people queuing to buy stocks, I certainly wouldn't sell; when I reach a certain level, if I believe the value of this scarce resource has been maximized, and my capital has greater benefits to pursue, I will definitely sell this thing."
A good company could be a good stock or a bad stock. Its price being low makes it a good stock, and its price being high makes it a bad stock. Similar to stock trading, even if the artwork you buy is a masterpiece, it still has a certain price range. Under the current market conditions, if its value has already been maximized, choosing to sell them is the necessary path to achieve maximum investment returns.
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