Essentially, there are two major trends going in their favor. One is that very rich people always get it in their head during the course of an economic cycle that they need to expand beyond conventional financial markets into the unusual. In this economic cycle, it has happened unusually quickly. That is largely due to the second trend, which is that very rich people barely skipped a beat from the financial crisis and have rapidly rebuilt their vast sums of wealth and need avenues to fritter it away on.
I will caution, however, history is not a kind master to the long-term holder of Sotheby's:
You will note that it always seem to peak in anticipation of a recession, or at least major market downturn, by anywhere between six months and a year, but never much before that. Each of its major three peaks coincides with the peak of an economic expansion and each of its major troughs coincides with the trough of the general economy (or at least the financial markets). It's essentially a supercharged coincident play, equivalent to the double or triple long ETFs for the general market. The question is, how much will the bids rise?
In this case, I don't feel that we are yet at the end of the most recent economic expansion, though oil is certainly doing its damnedest to derail it. Furthermore, the status of the uber-rich is well secured by the global politics of the moment, perhaps with some emphasis on "of the moment".
One thing that does give me caution is that the collectibles market seemed to kick in much earlier in this economic cycle than it tends to. After the last bear market it took Sotheby's seven years to reclaim its old high. This time, it looks like it will do it in little more than two.
The thing to keep in mind if you play Sotheby's is that, like the goods it creates a market for, to bottom can fall out of its price awfully quickly. If you make a lot of money on Sotheby's, take it and go.
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