Is art truly an investment, or is it merely a sophisticated fraud designed for the wealthy? This provocative question was tackled head-on by veteran collector and consultant Yariv Egozi in a recent episode of the People and Collectors podcast. Drawing on his 42 years of experience in the field, Egozi provides a candid look at the psychology, economy and often chaotic reality of the collecting market in Israel and globally.
The three classes of collectors
Egozi argues that the market is segmented into three distinct groups. At the top are the “1% of the 1%” who possess astronomical wealth. For them, purchasing art is less about appreciation and more about conspicuous consumption. They buy branded items, often paying tens of millions for seemingly absurd pieces, simply because they can.
Below them are the nouveaux riches—newly affluent businesspeople and athletes. They view art acquisition not as a passion, but as a social stepping stone—a "ticket to a certain milieu". They acquire what is pushed onto them without deep understanding, fueling a significant portion of the art market.
The third, and often smallest, group consists of the discerning collectors. "These are the collectors who study the field of collecting," Egozi explains, whether it be Israeli art, modern art or antiquities. They consult experts, verify their purchases and are driven by knowledge, although they make up a very small percentage of the market.
The Wild West of the Israeli market
The Israeli collecting landscape presents unique challenges. The market is described as "terribly small," leading to rapid growth but also a lack of regulation. The rise of large auction platforms like BidSpirit, while increasing access, has flooded the market with unprofessional auction houses.
This lack of professionalism, sometimes mixed with malice, has led to a major issue with fakes. Egozi highlights the situation with Israeli art icon Menashe Kadishman, warning that many works sold—even by auction houses—are counterfeit. This underscores the expert advice provided by Egozi: "If you decided to be a collector, check." The buyer must beware, as without regulation, trust placed in a gallery or auction house is often misplaced.
For potential collectors, Egozi advises seeking counsel and performing due diligence: speak to other collectors, look at previews and use knowledge to filter through the "fake knowledge" online.
Collecting for passion, not profit
A critical piece of advice offered by Egozi is to never purchase art solely as an investment. While he may offer professional opinions on good gambles, the primary motivation should be personal connection.
Egozi recounted a moving story of a woman who collected 550 coffee grinders because her grandfather, a Vienna café owner, was murdered in the Holocaust. For her, the collection was a memorial. This historical connection and emotional value, rather than monetary gain, is what elevates collecting beyond mere accumulation.
The conversation also delved into the eccentric side of collecting, including the "five most bizarre collections" Egozi has encountered, ranging from shrunken African heads displayed in a living room to collections of highly intimate love letters and journals.
The ethics of controversy: Nazi artifacts
The interview didn't shy away from controversial topics, including the legitimacy of collecting Nazi artifacts. Egozi firmly stands by the legitimacy of this field, arguing that documenting and preserving these items is crucial in the face of Holocaust denial. He noted that when platforms like BidSpirit prohibit the sale of such items, the trade simply moves to the black market, removing documentation and research opportunities.
Egozi stressed that for collectors interested in this or any niche field, learning and consultation are paramount, especially given the high percentage of fakes (up to 60–70% in Holocaust artifacts).
A market correction
Looking at the broader economic picture in Israel, Egozi notes that the art market is currently undergoing a "very strong downward correction." This is partly due to global downturns and recent conflicts, but also because collectors realized they overpaid significantly during the high-tech boom. Works bought for $30,000–$40,000 are sometimes selling for just $7,000 now.
Egozi encourages budding collectors, including those with limited means, to start their journey. While the wealthy can afford expensive pieces, serious, dedicated collectors who invest time in learning and identifying overlooked items can build a valuable collection at a fraction of the cost.
- For more stories from Egozi and other collectors, check out the People and Collectors podcast. The full interview is available with English subtitles and 50 other languages.