Yes, I know because I buy them. [laughs] I used to be annoyed by this, and now I think it’s the most delightful thing in the world because there’s all this loose money sloshing around, and so-called contemporary art is like this sponge that just absorbs all of it. There’s none left. Some of the things I buy, I am the only bidder. I get it for the reserve price. No one else in the world wants it, or even knows that it’s being sold, so I am delighted about this. The answer to your question, which artists are undervalued? Essentially, all good artists. The very, very, very famous artists, artists famous enough for Saudis to have heard of them — Leonardo, I would say, is probably not undervalued. But except for the artists who are household names — every elementary school student knows their names — they’re all undervalued.

https://conversationswithtyler.com/episodes/paul-graham/

As with almost all episodes in Conversations with Tyler, this one too is worth listening to in its entirety. I’m only halfway through, but I particularly enjoyed the excerpt I’ve quoted above.

Lots of reasons for me to have liked it – I know next to nothing about art, I enjoy thinking about what is underrated (and therefore undervalued), and I enjoy understanding more about how different markets work.

But also, I like watching and reading about football.

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There’s been some seriously big players who’ve made the move into the Saudi league in the past year or so, with the biggest name being Ronaldo, of course. And there’s been a lot of hand-wringing about it.

But you might want to think about the following points, as I have been:

1. Have the valuations been unusually high for the players that made the move?
2. Did the football clubs actually get a pretty good deal then?
3. How should they go about using this money? The same way the Saudi league is snapping up players, or the way Paul Graham buys art?
4. What is the framework that Paul Graham uses while buying thinking about art? Is the same framework applicable in other markets, and not just football?
5. Which other markets have the same phenomenon playing out right now (akin to the Saudis buying out the “big” names?)
6. How should you think about selling in such a market?
7. How should one think about regulating such a market?
8. Should one think about regulating such a market?
9. What does equilibrium even mean in such a market?
10. With regard to that last question, over what time horizon?

I plan to have a conversation about these questions with ChatGPT, and then with some friends. If you like football, economics or best of all both, it might be a fun way to spend a couple of hours!