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IN THE FINANCIAL world, some topics are serious, others not so much. Since it’s the holiday season, it seems appropriate to look back at some of the past year’s lighter moments.
No joke. In 2019, artist Maurizio Cattelan unveiled a collection he called Comedian. The item that received the most attention: a sculpture that consisted only of a banana duct-taped to a wall. The banana gained fame when it sold at a Miami auction for $120,000.
But that wasn’t the end of the story. Just before Thanksgiving this year, Sotheby’s auctioned another of Cattelan’s bananas. Perhaps owing to inflation, it sold for quite a bit more. A crypto entrepreneur and billionaire named Justin Sun beat out competitors with a bid of $6.2 million.
Shortly after winning, Sun had a thought. “Eating it at a press conference can also become a part of the artwork’s history,” Sun said. That’s exactly what he did. Later, Sun commented on the taste: “To be honest, for a banana with such a back story, the taste is naturally different from an ordinary one.”
Eye of the beholder. If a banana is taped to a wall, does that make it art? That’s debatable, but I don’t think it compares to the work of Italian artist Salvatore Garau. In 2021, he unveiled what he called an “immaterial sculpture.” It was literally invisible. But as Garau explained it, immaterial doesn’t mean that the sculpture doesn’t exist. In fact, the sculpture is delivered with a certificate of authenticity certifying that the sculpture exists in the artist’s mind.
The first “immaterial” sculpture sold for about $18,000, so naturally Garau chose to build on this success. He later unveiled another invisible work in front of the New York Stock Exchange building. This installation was backed by the Italian Cultural Institute, which sent representatives to the unveiling ceremony. It was as if The Emperor’s New Clothes had come to life.
In the years since, Garau has added to his immaterial series. He unveiled “Buddha in Contemplation” in the Piazza Della Scala in Milan. Because the sculpture was invisible, a white square on the ground let observers know where it was. And earlier this year, Garau presented “Invisible Buddha.”
How does Garau justify his invisible works? “My sculptures are carved from air and spirit,” he says. Does that make any sense? It’s unclear—but he’s certainly a good salesman.
On principle. In June 2019, a Pennsylvania woman named Jennifer Montgomery purchased two bottles of Perrier water from her local Sheetz convenience store. For the purchase, Montgomery was charged 24 cents in sales tax.
This might not sound newsworthy. But to Montgomery, the sales tax she was charged was an injustice—because Pennsylvania taxes soft drinks but not water. Montgomery filed a request for a refund with the Pennsylvania Department of Revenue, but her request was denied.
Montgomery then filed suit against the state. In Montgomery vs. Commonwealth of Pennsylvania, she sought a refund of her 24 cents. Among the points she made: Perrier is naturally sparkling when it comes out of the ground, so it shouldn’t be put in the same category as artificially carbonated drinks like soda.
The court disagreed. Earlier this year, after a five-year battle, the court affirmed the Department of Revenue’s position that Perrier is indeed a soft drink and should be subject to tax. Though Perrier is just water, the court said, it is nonetheless carbonated, and that makes it subject to tax.
Poorly executed. When it comes to the lottery, disputes and malfeasance are common. But a Florida couple made news this year with an unusual effort to defraud their state lottery. Kira Enders and her boyfriend, Dakota Jones, decided to tape together two losing tickets in such a way that it appeared they had the winning numbers for a $1 million jackpot. But when Enders showed up at the lottery office in Pensacola, officials were suspicious, so they decided to question Enders and Jones separately.
When asked why the ticket was taped together, Enders explained that the ticket had fallen out of her car on a rainy day and gotten wet. Then, before letting it dry, she had tried scratching it, and that’s what caused it to come apart. That’s the reason, she said, that it was taped together.
It might have been a plausible explanation, but when he was questioned, Jones told a different story. The couple had been out for a walk on a country road in DeFuniak Springs, he said, when they happened upon a severed ticket lying in the road. They decided to tape the pieces together, and that’s when they realized it had the winning numbers.
The Escambia County sheriff was not impressed: “It was clear to the lottery officials, and obviously clear to us, that she had taken two tickets with different, you know, one side had one serial number, the other side had the other serial number on it…. If you’re gonna try to claim a million dollars, you’ve got to do a lot better than this,” he said. They now face prosecution.
Policy proposal. Nothing in personal finance seems to generate as much disagreement as cryptocurrency. The late Charlie Munger called it “rat poison,” while others see it as the future. Some even see it as the solution to our national debt.
Cynthia Lummis is a senator from Wyoming who has proposed a “strategic bitcoin reserve” to be held by the federal government. She compares it to the government’s strategic petroleum reserve, but sees it as even more valuable. If bitcoin appreciates, as she expects it will, it could allow us to pay off the federal debt. “Put future Americans on a better footing, unencumbered by debt that they never supported or benefitted from,” she’s said.
Not everyone is convinced. In an exchange with Lummis on Twitter, hedge fund manager Cliff Asness has called the proposal “ridiculous” and “idiotic,” and challenges her to explain why we shouldn’t also have a “strategic Powerball reserve.”
Charitably inclined. The philosophical debate over cryptocurrency probably won’t be settled any time soon. But this year, there’s been one crypto story I suspect everyone can get behind.
Back in 2016, James Fickel was a 25-year-old software developer who also enjoyed trading stocks and cryptocurrencies on the side. In a well-timed bet, Fickel made a six-figure investment in the cryptocurrency Ethereum. At the time, it was trading for about 80 cents. Now, it’s over $3,000, making Fickel a billionaire. What he’s done with his winnings, though, is heartening. Fickel started a foundation and is giving away not just millions, but hundreds of millions, to support medical research.
Looking ahead. Is there anything we can learn from these stories to carry into the new year? In my view, there’s one common theme. Modern Portfolio Theory creator Harry Markowitz used to describe diversification as “the only free lunch” in finance. That’s because it doesn’t cost anything to diversify, but the benefits can be enormous.
The above group of stories, however, suggests there may be another free lunch available to investors, and that’s simplicity. A simple portfolio generally results in lower costs and lower taxes. It’s also easier to monitor and manage. Perhaps best of all, a simple approach can help us sidestep many of the financial hucksters and schemers out there—whether they’re promoting cryptocurrency, invisible sculptures or anything else.
Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam’s Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.
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Nice article, Adam. Thanks for the laugh with those stories.
If we get a strategic bitcoin reserve, we could make a case for a lot of other strategic reserves, from Pokeman cards to autographs to vintage automobiles to Faberge eggs.
Likely, but at least Pokeman cards, vintage autos and Faberge eggs are tangible objects with actual intrinsic value. Crypto, on the other hand, resides in the category of vapoware or the “concept of an asset,” which exists more in the imagination than in actual fact. Crypto is often compared to the Dutch tulip craze, but unlike crypto, tulips were real objects, but like tulips, crypto’s value could quickly disappear.
The idea of a strategic bitcoin reserve is foolish on many levels, but the desire for such a reserve is understandable as it would allow many bitcoin owners to convert their bitcoins into real dollars that could be spent, transferred or invested in meaningful ways. A strategic bitcoin reserve is only likely to have value until it doesn’t, whereupon, like so many governmental economic efforts, it would be just another transfer of wealth represented by an addition to our national debt.
Perrier, a.k.a. seltzer, is carbonic acid. When we use it in the lab, this is what we call it.
Help me understand something.
With bitcoin and other cryptocurrencies being squirreled away in “reserves,” ETF portfolios and the coffers of companies like Microstrategy, how is this “money” circulated? With seemingly less and less of it available for actual financial transactions, how can it function as a currency?
And if it can’t function as a currency, then what is it exactly?
Let’s say you look at your FDIC insured premium savings account balance online and see a balance of $73,862.12.
Where is the cash?
It is a reserve, like gold in a safe somewhere backing a gold ETF.
A similar situation is stock index funds. They only work while a critical mass of traders actively trade.
I taped a blueberry to a sheet of paper. Exclusive offer for HumbleDollar readers the bidding starts at $100,000. Act fast.
Maybe the US government can buy it from the strategic bitcoin reserve and then put it in the National Gallery of Art, and watch it appreciate. Or maybe someone famous can just eat it and hang a certificate of authenticity in the Gallery for the American public to look at.
Wow! Can I bid in Dogecoin? 🙂
You’d be ahead of the curve. I keep getting emails that the US is eliminating cash and replacing it with Dogecoin.
I have a vast immaterial strategic Bitcoin reserve!
My comment is “immaterial” comment. It is invisible and exists only in my mind!
My strategic Bitcoin reserve has more than doubled this year. To any fellow Bitcoin investors: HODL.
That was fun, but also a bit depressing. I’ve always thought most modern art was a scam (never mind crypto), but now it seems to have reached the end. The explanation of the artifact was always in the artist’s mind, and now the artifact itself is staying there. Actually, I would usually prefer for it to stay there…
The banana art dates back to Dada, Fluxus, Minimalism. (A lot of this had no monetary value and often had no intent of making money.) There’s a huge amount of philosophy and writing about this type of art. A lot is performance, and the wealthy buyers become are players in this. It’s fun and games and, clearly, we’re entertained!
Full disclosure, some of my art is what you’d probably call scam, but art people would call conceptual, or deride as conceptual lite. I’ve come to recognize that my audience is very narrow.
I suggest that the problem isn’t with modern art, but with the wealthy who buy this stuff.
If the market for this so-called art dried up, maybe we’d see less “modern” art and more “inspirational” art.
Imagine all the socially useful things $6.2 million could be spent on. Yet, Justin Sun somehow justified blowing it all on a banana taped to a wall. Heartbreaking.
“James Fickel … What he’s done with his winnings …”
I smiled at your choice to call them winnings — were you throwing a little (more) shade at cryptocurrency investing, viewing gains as unearned?
That’s a great collection, with a wise conclusion. Here’s another contribution, courtesy of my wife.
https://www.npr.org/2021/09/29/1041492941/jens-haaning-kunsten-take-the-money-and-run-art-denmark-blank