It's bananas to regard art as an investment

Enjoy your paintings and sculptures. Just don't expect a return on what you paid for them.

- Jonathan Guthrie

Who is the butt of the joke here? Sotheby's just sold a banana stuck to the wall with duct tape, titled Comedian. Cryptocurrency entrepreneur Justin Sun bought the artwork by Maurizio Cattelan for US$6.2million (S$8.32 million) including fees.

Mr Sun said he would eat the banana.

If you have conventional tastes in art, the joke is on Mr Sun for wasting his money. But that would also mean the joke is on you, from Mr Sun and Cattelan's likely viewpoint. Enraging the hidebound bourgeoisie is a traditional pursuit of artists. Crypto bros now participate.

What better way to wind up lovers of Old Masters and fans of investment-grade bonds than by awakening their fear of missing out? "Editions" of Cattelan's duct-taped bananas (which can be replaced when required and come with certificates of authenticity) previously sold for US$120,000 to US$150,000.

But you would be bananas yourself if you regarded art as an investment. That is my takeaway after selling a far cheaper artwork. I clung on to it for 20 years believing it was appreciating steadily. My return on capital was represented not by a banana, but a doughnut (zero).

My real reward was a lesson in behavioural finance, the subject of this column.

There is no objective benchmark for the quality of an artwork. To have serious value it needs to fulfil three mutually dependent criteria: exclusivity, authenticity and desirability. I owned an old oil painting. This made it unique and therefore exclusive. But was it authentic?

I took it to an auction house.

"There are an awful lot of fakers imitating this artist," the expert said.