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In Art the Safest Bet is the Biggest Bet

"Abstraktes Bild" by Gerhard Richter is on display at Sotheby's during a preview of their Impressionist and Modern Art sale in New York on October 28, 2011. Photographer: Emmanuel Dunand/AFP via Getty Images
"Abstraktes Bild" by Gerhard Richter is on display at Sotheby's during a preview of their Impressionist and Modern Art sale in New York on October 28, 2011. Photographer: Emmanuel Dunand/AFP via Getty Images

Every time a billionaire collector breaks another sales record at auction, those in the know snicker: Yet another hedge fund prince has publicly overpaid for an asset that's almost guaranteed to fall in value.

The examples are plentiful, like the disastrous Damien Hirst auction the night Lehman Brothers went under. At that auction, £98 million of art was sold, and then promptly lost 30 to 50 percent of its value.