Markert Analysis

Herd Mentality

Bijay Anand We Indians suffer from a very India specific disease called “Herd Mentality” We see a large crowd moving in a particular direction and without knowing the destination or purpose of that movement we jump right into it and blindly allow ourselves to be part of a crowd.

Let me be more specific. If the stock market is doing well, we want to be a part of that action. AFTER it has already shot up by 300%. Everybody is buying and everybody is making money so why should I be left out. Result? Intelligent investors cashing in on our herd mentality and moving out and poor gullible herd followers left holding the sick baby. Everyone is buying silver. Silver is shooting up every day. Sometimes even every few hours. So why should I be left out. Huge investment (read bad investment) follows. Silver is now languishing with little or no interest from any investors.

Art. There was a time in our art market when even paanwalas wanted to buy art. Everyone KNEW that money was there to be made. Bankers, advertising professionals, doctors, engineers and even housewives wanted to cash in on the art boom. As with all fads, when this fad ended there were hoards of investors left holding art that was no longer saleable or liquid. They were left holding dud investments that were as duddy as dud could get.

Which is exactly what the problem is. The art crash in India is far more pronounced than anywhere else in the entire world. Art markets across the globe be it China, UK or US have rebounded and are in an extremely comfortable zone right now. So my question is, why not so in India? When one follows a herd mentality he/she leaves their mental faculties at home and does only what everyone else is doing. In this case buying anything that is paint applied on a canvas. There was no understanding or education or even thought that went into a purchase. If someone said “oh Bodhi is buying X artist” the entire herd would flock to pick that artist up. NOT knowing or even trying to understand why!!! In their frenetic bid to cash in on the art boom many unsuspecting and gullible investors lost a lot of money.

Warren Buffet the famous billionaire has wisely said that he buys when everyone is selling and sells when everyone is buying. And that is the only secret to his becoming a billionaire. That and of course having the faculty to know exactly what it is that should be bought. I’m sure whoever is reading this already would know of Warren Buffet that he would never ever be a part of a herd movement and buy what everyone else in the world was buying.

So if we know this simple truth why do we still fall prey to the same rigmarole of “bhed chaal” every time? What if at the time when paanwalas and dabbawalas were buying and investing in art and it was at its peak we had sold our investments? And what about now when no one is looking at art as an investment anymore and the choicest of paintings are available for sale in this buyers market we were to buy? As a typical Indian maybe you would not take that chance of going against market sentiments like Warren Buffet would but think about it.

The time when the art market was at it’s frenzy one would not even get to see a fabulous Husain, Raza or Sabavala. Like beggars we would buy almost anything decent that was offered to us at any exorbitant price. And today when rare and delectable paintings of great masters are being offered to us we are looking the other way? Why?

Why is it so important to us to be a part of a movement? Why are we waiting to first see those signs of an art market recovery to start thinking about putting in our hard earned money into decent art? Just because we have traditionally always been a part of the herd does not in any way indicate that this is how we need to be for the rest of our lives? I am saying this because a legendary artist like Husain, Gaitonde or Tyeb may have done “X” amount of paintings in their lives. Once these paintings are quietly picked up by international and Indian collectors or museums they will be lost to us forever.

The international collectors who are smart and astute are using this time and opportunity to pick up our choicest of pieces. They are certainly not waiting for a large-scale price escalation to indicate to them that this is the right time to pick up good paintings by Indian artists.

Art is a legacy that we leave behind for our future generations. It is a part of our history and our culture. It is imperative for those of us who can afford to protect and nourish that culture to do so. Not only for ourselves and our investment portfolios but also as a rich heritage to be inherited by our future generations to come. Stand away from that herd that is not buying art right now and re-look at this situation and opportunity. It is certainly not going to be there forever.

Bijay Anand
Managing Director
Kyozan Arts Pvt. Ltd.