Generally speaking, every quarter Masterworks updates the appraisals of some of their offerings. How many receive updates seems to vary significantly from quarter-to-quarter. There is not always a discernible pattern to how frequently a given work is updated in value either.
All that having been said, we put together a few graphs from the latest Q1 performance information, based on new appraisals done at the end of March.
Into The Data
A few notes before we get started:
- We’re excluding works that don’t have updated appraisals
- Works having been sold or announced as sold as of the time of this writing have also been removed from the analysis.
- The data is not the easiest to work with, so everything here is done with a best effort to provide accurate and insightful analysis, but we can’t promise that there are no mistakes.
After 3 consecutive quarters of declines in the percentage of appraised offerings that were valued higher than their IPO price, we finally saw a bit of a reversal.
In the end of 2022 data, only 54% of appraised works were more valuable than when the first debuted. That number jumped to 61% in the Q1 2023 data. This was driven, in part, by a large increase in the total number of works that had received updated appraisal values since their IPO. In Q4 ’22 there 65 works with updated data, which climbed ~50% to 97 in Q1 ’23.
What has the range of performance been? To calculate this, we looked at all works with updated valuations and calculated the 20th, 50th, and 80th percentile returns over time. In general, all 3 of those percentile levels have seen worsening performance over the past year.
In the case of the higher percentiles, it’s possible this is weighed down by a large volume of newer offerings that have not had as much of an opportunity to appreciate yet.
As a closing thought, it’s also interesting that the 50th percentile, which should be around average, is continuing to gravitate towards 0%.
Lastly, we’ve produced a bit of a crazy chart below. It’s the latest appraised value for each work. That updated value could have come in the Q1 ’23 data, or it could have come in the past, such as in Q2 ’22.
Also, the data is ordered by the series number, which should correlate fairly well to the order in which they were offered on the platform. It’s possible series 3 could have been made available for investors ahead of series 2. However, it’s safe to assume that series 2 is a much older offering than series 200. So the general trend will be that, as you go down the list, the offerings are newer.
It’s a lot of data and there’s not really a great way to make it look good. We may not do another one of these in the future. It’s tough to read with ~100 entries. Imagine how it’ll be 150.
It’s noteworthy that the first roughly 40% of listings are generally positive before things become much more mixed in the middle. The list of offerings at the end also seem to be trending positive. It will be interesting to see if that keeps up as new waves of appraisal data for more recent offerings come in.
