A stock price like a piece of art
Why is a stock price like a piece of art ? Why future art is not under threat from AI. Climate, adaptation + mitigation both needed. Harvard endowment on NetZero Investing Week. SEC + ESG. Beans.
Why is a stock price like a piece of art ? And,on balance, why I remain hopeful about art in the face of NFTs and digital technology.
Why is a stock price like a piece of art ? Why future art is not under threat from AI.
Climate, adaptation + mitigation both needed
Harvard endowment on NetZero
SEC on ESG funds disclosure
Investing week, Growing beans
Links: New small microgrants programme, Art, bucket makers, future podcast with Nadia Eghbal, and podcast with Carl Saxton-Pizzie.
We are growing some beans and they have so far survived squirrels, slugs, snails and us.
We have also a small butterfly farm (or prison as JP calls them). JP is phobic of butterflies so we are working on this as well as part of our home school project. This ability to follow an interest, but also work on real world challenges and workings is a very large positive for our home education approach.
Investing week…I explained to a friend why interest rates directly impact stock market values on discounted cash flow basis (will write it up in a blog sometime, but let me know if of interest and you’d like the draft write-up), I considered where the future direction of outsourced R&D for biopharmaceuticals will go; I listened to Chris Stark on climate policy and NetZero; discussed whether “unstable equilibrium” is the new normal in Ukraine and what that means; discussed the state of high net worth US private banking; and the likelihood of FED rising interest rates to combat inflation and so the likelihood of deep recession vs light recession.
Why is a stock price like a piece of art ? And on balance, why I remain hopeful about art in the face of NFTs (Non-Fungible Tokens) and digital.
In a fashion, a stock price is a number that embodies all of the reputation, social, natural, financial capital, assets, liabilities and cash flows both negative and positive discounted back to this exact moment in time. All of the human thought as to what is the “value” of a company’s equity embodied in that moment in time.
It’s a human construct. Like all money-related phenomena it’s based in intersubjective myth or intersubjective trust. It exists because other humans believe it to have value.
The fish do not care. The sky does not care. The parrots do not care.
Natural science does not care about the stock price directly (although if a collapse in price forces a person to sell their parrot, or they buy new parrot food with their profits then at the second order the parrots care; and to the seventh order if the stock prices lead to or reflect a world where Miami is underwater and the fish can swim there - to that extent the fish would care).
There is human skill in its art forms. Some art can only be made by people who have honed their skills for 10,000s of hours, and even then these people may be almost singular.
I once met a Kyoto artisan who claimed to be one of the the last 5 hand makers of buckets left. (link end.)*
Humans on occasion value this type of art very highly.
(*It turns out, I think he wasn’t quite the last. And he was certainly poorer than this other artisan who elevated his art of bucket making even higher. I bought his bucket for about £100+, the artist-artisan bucket goes for £1,000s+ )
Some art does not require the same physical skill. Take Duchamp’s toilet urinal.
For those interested in or wanting to converse in this type of language of art and culture, the toilet embodies many different strands of human thought and values embodied in a toilet. (What is art? Can an artist say anything is art? When are found objects art?)
Just like a stock price. Just like a stock price the parrots don’t care except perhaps as a place to perch on or defecate on even.
But the history of art suggests that art works always have a portion of their value in what they represent. The value of Duchamp’s urinal is not in its material cost and skill of labour, no more than the price of most biopharmaceuticals are not in the material manufacture cost of chemical compounds. It’s in the ideas - the intangibles - that such work represents. (And in the case of pharmaceuticals the intangible value of innovation that went into the drug, and intangible value of life extension a drug offers).
The representation maybe be allegorical in the painting, it may be representative of the artist’s life, her skill, what she represents; or the culture of the time, and so on. That is all embedded in the piece of art. Much like value is somehow embedded in a stock price.
So as art moves digital - and you have a piece like Beeple’s “Everydays - The First 5000 Days” which sold for $69m. The art works means of digital production, the NFT, the work being on the block chain, are only a portion, and perhaps a very small portion of the value of that piece and what it represents. Beeple worked on the piece for 5000 days.
In this reading, the piece represents the years Beeple spent on his work, the advent of digital art - the culture and presentation of web3.0, and crypto, and all the hopes and dreams of a crypto cyber punk future; expressed in an array of digital pixels.
Although note, as my friend Alex notes, this particular selling price might be part of something a little odd and like a scam.
The art still means nothing to the parrot. Just like the stock price.
If this reading of art is correct, it partly explains the relevance of cave paintings from thousands of years ago - what they express then, the cultures the art represents and what they express to us now.
It will also explain the value of art in a digital world. It’s obviously not the pixels we are buying, nor the skill or lack of skill which went into their making; but what they represent to us now and in the future.
And the parrot still won’t care.
The Future of Art….In honour of the effective ideas blog project (which you should check out, link end), I thought I’d spell out what this might mean for the future, say in 2072.
My argument is that art will be more accessible to a wider range of peoples because technologies will allow them to express their imagination better without as much physical skill. Physical skill will still be valued as it always has, but physical skill is only a component. (Else we would value the hand made buckets of Kyoto more; and the urinals of Duchamp perhaps less). In many cases, representation, imagination, culture and all those things that matter to humans make up art more.
I will continue by talking about the now. Computer programmes - AI art makers - have made the creation of complex images possible in seconds.
Enter:
In to the Open AI Dalle E and the Google’s Imagen.
I entered the same into MidJourney (and the picture at the top of the blog is also AI generated)
There is limited skill physical in creating these images.
But they allow people with little physical skill to express a much wider range of imagination and in that basis create a wider range of art.
Fast forward to 2072, the technological possibilities will defy our imaginations of today.
In the same way that most of us in 1972 could not have imagined Beeple’s art, AI art or the regenerative art processes of today.
Critics might worry about the skill in art. The cave paintings survive. The art of bucket making may be gone by 2072.
No one is saving the buckets of cedar wood. I am sad we have lost so many of these arts. So many that there must be thousands if not millions we do not even know of - we almost did not know of the poets of Bengal; we have lost the recipe for Roman cement; the gardens of Babylon are but a dream; no one alive now or in the future will ever see a vision of the pyramids in their orginal white.
And yet, what we gain is more than what we lost and as long as we progress this is ever so.
The stock price and the stock market is the sum of the hopes and dreams of listed businesses.
But art is the sum of the hopes and dream of humanity, its culture and its progress.
And as our life expectancy progresses which is our health; and as our morals and social relationships progress from the end of slavery, to womens votes, to minority and disability rights…
This will be seen in our art. Our arts will reflect our progress. We will still have the expression of physical skills perhaps not in bucket making, but in something new.
In 2072, we will have technologies that dwarf ones we have now.
We will be able to voice our thoughts and visual images will be created; animated films will be accessible to many; sculptures that will be the legacy of 3D printing in materials and structures we can not make now.
The sum of art will have grown because the sum of human culture will have grown.
Some old arts might only evolve. Poetry may have new forms but will still be poetry.
Dance might be more accessible as robotic technology enables artists to defy age or physical limitations.
Performance arts may merge with the digital and find a way to be both live and accessible; and make work that is impossible to perform today.
Music will still thrive. The future of art will be extraordinary.
There is an unlikely chance we will have the technology to speak in the language of parrots but if we don’t
the parrots still won’t care.
Listening again to Chris Stark as I heard him speak again this week.
You can read from his organisation’s work (Climate Change Committee) what seems obvious to those in the climate field.
We will need both adaptation and mitigation and to work on adaptation is not to admit failure on mitigation nor lessen its need.
Another point to acknowledge is how far we have come. In 2015, climate models suggested 3.9c warming in 2100. In 2021 / 2022, climate models suggest 2.5c of warming as a reasonable point estimate assuming governments broadly do what that have committed to. That is a 1c drop in 6 years and it avoids some catastrophic scenarios.
Of course on the other side 2.5c rise will be bad for many places, for instance Bangladesh. But, it is likely manageable for many other places such as London albeit with adaptation costs.
Have a listen again to Chris Stark.
This is Michael Cappucci on the Harvard endowment on its NetZero strategy and its efforts to be part of the solution. (9 min video segment).
Very ESG specialist, skip if not your area… The US SEC has proposed two ESG rules for asset managers. (1) Names Rule would require funds that use ESG terms in their names to follow ESG strategies. (2) ESG Strategy Disclosures would require funds that follow ESG strategies to make certain disclosures.
Links:
Bucket Maker blog
UK football league generates more money than other leagues…
New small microgrants programme:
My conversation with Carl.
Effective Ideas: https://twitter.com/effective_ideas?s=20&t=_Zv8spcQ2Q1zdIk53d_5jQ
I watched the hand made buckets video - so glad for French subtitles as my Japanese is non-existent. All those fantastic shapes, the artistry of the work, and the years of skills passed down through generations of artisans.
The cedar cup link was amazing - what a skill. Seeing art made is soothing and beautiful.
N.B. I'm interested in the draft interest rates and stock market values blog.