As Jori Finkel, senior editor of Art & Auction, noted in the August 2004 issue of the magazine, ‘by now everybody knows the story of Picasso’s Garçon à la pipe, from 1905’. Bought by John Hay Whitney in 1950 for a reported $30,000, the Rose Period masterpiece sold for $104m (e84.4m) at Sotheby’s in May, becoming the world’s most expensive painting. Southeby’s described it as a ‘haunting and poetic’ portrait of adolescent beauty. A newspaper report called it “the best investment ever made in art”.
“Think again”, wrote Finkel and Michael Moses, an economist at New York University’s Stern School of Business, agrees. “Despite its staggering price, the Whitney picture did not generate an earth-shattering financial return,” says Moses. He calculates that the painting had a compound annual return of 16.3%. Yes, that’s impressive, surpassing the S&P 500’s average return for the same period of 12.1%. But it’s hardly the best investment ever made in art, and not even the best return for your money on a Picasso.
According to Moses’ research on auction results, that honour goes to a small drawing the artist made in 1903, Le vieillard. Purchased at Christie’s in 1991 for $9,350, it sold two years later at Southeby’s for $25,300, making its annual return 64%.
So, to put it crudely, there’s money in oils, but only if one knows where to look for it and how to spot it. Suddenly it doesn’t sound so very alternative after all, does it?

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