The Real Reason Sotheby's Investors Are Nuts

Earlier we noted that shares of tony auction house Sotheby’s (BID) were surging again, and that in the past the stock has peaked right before major bubbles burst.

But actually that’s not what’s interesting about Sotheby’s.

A commenter pointed out this chart of Sotheby’s vs. the major indices going back to 1989, and you realise it’s not the peaks that stand out: it’s the troughs. After the last two busts, the company gave up all of its gains going back to 1989, whereas the major indices didn’t even come close to losing that much.

Sotheby’s investors are manic depressive. When it’s up the stock is hot, but during the down times, when the rich aren’t dumping gobs of cash on art, the stock isn’t worth jack.


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