Re the P.S. in the Mar. 7 issue:

“I have followed your writings from back when you started ETR. Your latest YouTube link to videos of people in embarrassing situations really turned me off. I grew up through most of grade school and some high school being bullied…. I have worked through most of the pain but I don’t have any desire to see others in those situations.

“I don’t understand the fascination that people have watching others suffer. Seems to me to be a sign of what is wrong with our society at the present moment. A severe lack of empathy for our fellow citizens and all the inhabitants of Earth.

“I hope we as a species find a way to improve our compassion or we may be doomed to our own extinction and perhaps that of the planet also. We do not seem to be anywhere near as smart as we think we are.” – RK

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I’ve never believed that having a gun in my house would be a good idea. Studies show that all sorts of bad events result from it, including killing or injuring family members. But this account made me wonder.

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The Art Issue

Meeting Mr. Lewin 

On a recent podcast, I was asked to name some people that were influential in “shaping my life.” The usual suspects came to mind: my parents, my teachers, and several business mentors.

It stands to reason that people that spent a year or many years trying to guide us as we grew into adulthood would hold these positions in our minds. But there are others we come across – people that pass into and out of our lives more quickly – that can have a profound impact on our career and personal choices.

In my life, one such person was Bernard Lewin.

It was 1985. I was 35. I was speaking at an investment conference in Palm Springs, California. I had recently bumped my net worth past the seven-figure mark. I was hardly rich, but I was feeling flush. So, I decided I was going to indulge a long-held fantasy. I was going to buy some art.

There must have been a half-dozen art galleries in town. I spent a pleasant couple of hours checking them out. Most of them sold what I think of as decorative art – the kind of art that will end up on the walls of your house if you let an interior decorator shop for you. I passed them by without even slowing down. Then I came to a gallery that sold the good stuff. I wasn’t familiar with the pieces in the window, but I stepped in to have a look.

The store was dimly lit and dead quiet. The art – mostly oil paintings and some gouaches – were stunning. I spent a happy several minutes meandering around, trying to make sense of what I was seeing. And then, out of nowhere, an elderly man that looked and dressed like Albert Einstein greeted me. He introduced himself as Bernard Lewin.

I explained that I was in town for business, but I had the afternoon free and was “in the market for a few pieces to start a collection.”

Hand on his chin, Mr. Lewin studied me for a moment. Then he smiled, spread his arms, and said, “Look around. Take your time. Ask if you have questions.”

Then he turned and disappeared into the back of the gallery.

I spent a good hour or so looking and making mental notes of the pieces I liked. I left without seeing him again, and went back to my hotel, thinking, “Okay, that was pleasant.”

As I lay in bed that night, images of some of the paintings I’d seen kept flickering through my mind. So, the next day, after giving an early morning presentation, I went back to Mr. Lewin’s gallery.

Once again, he did not greet me when I entered the gallery. And, once again, he appeared out of nowhere sometime later. I noticed that he was wearing the same patched sweater and corduroy pants he’d been wearing the day before.

“Ah, Mr. Ford!” he said, warmly. He shook my hand. “Good to have you back. Take your time. Ask if you have questions.”

I spent another hour there, by myself, and left without seeing him. And again that night, images of the paintings I’d seen danced in my head.

Despite Mr. Lewin’s apparent indifference towards me as a potential buyer, I visited his gallery the next day, determined to buy something from him. To keep him from slipping away this time, I held his hand as he greeted me and told him that I wanted to buy several pieces. “What would you recommend for a budget of, say, $35,000?” I said.

I thought that would impress him. I thought I’d be able to buy a dozen pieces with that kind of money. What I quickly found out was that I had accidentally walked into a gallery that featured some of the most important Mexican modern artists: Diego Rivera, José Clemente Orozco, Rufino Tamayo, Francisco Zúñiga, and Frida Kahlo, to name just five of them.

And this old man in a tattered sweater that I was talking to was the most important US dealer of Mexican modern masters.

Mr. Lewin spent a good, long time with me that day, giving me essential facts about the art I was looking at and regaling me with stories of his life as an art dealer. He also interviewed me extensively about my taste in art and my plans for building a collection.

Finally, he helped me select three pieces: a large mixograph by Rufino Tamayo,  a drawing by Diego Rivera, and a beautiful little oil painting by José Clemente Orozco.

The three cost me considerably more than I had planned to spend. But in retrospect, they were a very good investment. The Orozco alone is worth more than 10 times what I paid for it.

Over those several days, I spent a total of no more than four hours with Mr. Lewin. But in that time, he set me on a path that would immeasurably enrich my life.

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About Bernard Lewin

The Lewins (on the left) with Rufino Tamayo 

Bernard Lewin was born in Germany in 1906. In 1938, he fled the Nazis with his wife Edith, immigrated to the United States, and became a US citizen. He tried several professions before becoming an art dealer and collector. Eventually, with Edith’s help, he accumulated the world’s largest private collection of modern Mexican art.

Lewin was a personal friend of Rufino Tamayo and David Alfaro Siqueiros. His collection included the only portrait of Frida Kahlo by Diego Rivera that was not part of a mural.

Before his death in 2003, the Lewins donated more than 2,000 pieces to the Los Angeles County Museum of Art. These included works by Carlos Mérida, José Clemente Orozco, Rafael Coronel, and Francisco Zúñiga.

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Buying Art as a Financial Strategy 

One of the most important things to know about the supply and demand dynamic of art is very basic: When an artist dies, the supply of his work becomes fixed.

Demand is determined by a host of factors that boil down to the reputation of the artist among the art-buying public.

The “art-buying public” comprises a very large market – i.e., hundreds of millions of people. The great part of that market – like 99% – is involved in buying art whose value is worth exactly what someone is willing to pay for it. And the moment it is sold, its value usually drops by about 70%. Often more.

If you want to collect art as an investor, you must eschew that 99% of the market and focus only on art that has support among the 1%. On a global scale, this part of the market is probably limited to fewer than a million people. And that includes not only private collectors, but institutions, critics, and dealers.

Since we are talking about investing in art, let’s call this the realm of investment-grade art.

What is investment-grade art? 

For a work of art to rise to the level of “investment-grade,” two things must happen.

First, works by the artist have to make their way into the collections of major institutions and influential collectors.

Second, the artist and his/her works must make their way into the pages of respected periodicals and books on art.

The longer a piece has been in such books and collections, the more stable its value is likely to be. Like blue chip stocks, art that has a significant and longstanding reputation for being valuable tends to be a safer bet than art that has a short history – i.e., art that is hot now.

The Takeaway: If you want to start a collection of art that will appreciate in value over time, you must ignore everything you hear about the piece you are considering in terms of aesthetics. Do not even think of it as art. Think of it as a financial asset. Because ultimately, that’s what it is.

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La Casa Azul: The Frida Kahlo Museum

Mexico City is a wonderful place to visit. It’s replete with beautiful parks, colorful neighborhoods, great shopping, and lots of art and culture.

A must-see for anyone interested in art is La Casa Azul (The Blue House), the home that Frida Kahlo lived in for most of her life, including several years with Diego Rivera. Like Hemingway’s house in Key West, La Casa Azul will give you a chance to imagine the life of this amazing artist as you walk through the rooms she (and Rivera) inhabited.

The museum exhibits paintings by both Kahlo and Rivera, as well as many of her personal belongings, including photographs, books, furniture, and clothing.

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Vernissage – from the French for “varnishing” – is a term used for a preview or private showing of an art exhibition before the formal opening. The word has its roots in the old practice of setting aside a day for artists to varnish and put finishing touches on their works before the exhibit opens to the public.

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Picasso at work.

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Why?

I was on my way to Tokyo to meet with the CEO of a large Japanese book publisher. The topic: a possible joint venture.

“Bring a present,” a friend that had done business in Japan before advised me. “Something “golf-ish.”

“Golf-ish?”

“The Japanese are crazy about golf.”

The introduction was formal. I was met in the lobby by a young woman who was to be my guide and interpreter. She brought me to the CEO’s opulent office. He was congenial, but not gushing. There was bowing instead of hand-shaking. The conversation was perfunctory and muted.

I gave him – I don’t even remember what I gave him. His assistant gave me an equally forgettable gift in return.

Our meeting took place in hour-long conversations over the next several days. I had read that the Japanese prefer to make acquaintanceships slowly. During the meetings, I was keenly aware that my behavior – i.e., my manners – would play a big role in determining the outcome. I was careful to stay formal and serious and respectful.

After the penultimate meeting, I was invited out to dinner with several of the senior executives. (The CEO had attended only the first meeting.) After a nice meal, they took me to a “club,” which turned out to be an ersatz old-fashioned Playboy Club. We drank and smoked and none of them even glanced at the servers.

We never did the deal. And I never found out why. Perhaps I was too serious or not serious enough during the meetings. Perhaps they didn’t like the deal. Or perhaps they caught me glancing at a server.

I have Japanese partners now. They are younger and much less formal. Next time we meet, I’ll tell them this story. Perhaps they can explain it to me.

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