ISSUE 01
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NOVEMBER / DECEMBER 2013
FEATURE
www.investmentlifenews.com
66
Kashan (1525-1650) carpets are made of silk and often depict mounted hunters and their animal prey, while the Herat (15251650) carpets were made in Lahore, Pakistan or Agra, India and are characterised by a red field with scrolling vine ornaments and palmettes with dark green or blue borders. Finally, the Kerman (1600-1650) carpets have seven classes noted for its unique structure and were often used as garden carpets ornamented with formal gardens and water channels. Carpets dealers have developed a 70item classification for Persian carpets based on their design, type of fabric and weaving technique. For the aspirant investor it may not be necessary to memorise each of these characteristics, however a working knowledge of what separates a good specimen from a bad or fake production is the foundation for successful investment and even appreciation of these works of horizontal art. It should be noted that not all carpets are good investment pieces. Many are simply highly attractive home furnishing items with practical utilitarian purposes. However, as with most passion investments there are instances where it may be possible to combine both aesthetics and investment value. So when does a carpet become an investment piece?
EXPERT ADVICE
The first answer to that is the provenance of the carpet. Besides being made in Iran or nearby regional centre of excellence with a proven historical pedigree, it should also be a true antique, which means at least 100 years old, according to Jan David Winitz, president and founder of the Claremont Rug Company in Oakland, California. Winitz, in a lecture to a group of antique carpet connoisseurs, points out that the finest antique carpets were actually a form of ‘international currency’ during the era of Marco Polo. These valuable assets were traded for other goods in times where currency could, and frequently was either debased or entirely counterfeit. Marco Polo introduced the rugs to Italian aristocrats at the end of the 13th century, claiming that the carpets were from the Orient, which led to the blanket term ‘oriental carpets’. Despite the attachment of the word Persian, carpets produced in other regions were (and continue to be) considered investment grade if crafted as entirely individual artistic expressions. According to Winitz these car-
A good investment grade carpet must also use a harmonious palette of colours created exclusively from pure, natural dyes. Materials used must be of the finest quality. pets were made in city workshops as part of a regional cottage industry based in smaller towns and villages or even isolated nomadic camps. The common thread (excuse the pun) is that they are ‘virtuoso adaptations’ of the traditional designs, color palette and structure characteristic of a particular region. A good investment grade carpet must also use a harmonious palette of colours created exclusively from pure, natural dyes. Materials used must be of the finest quality. If it is made of wool the material must be lustrous, luminous, elastic and soft. Experts often say that a good carpet should feel as if it is made from a ‘living’ material. Of course, rarity and uniqueness (ideally the carpet should have the individual stamp of the master weaver) are the foundations of investment grade carpets. Straying into the poetic, which is extremely easy for products which feature designs based on an oral tradition for storytelling, myth and legend the carpet should possess aesthetic qualities such as ‘a stirring magnitude of artistry, a level of beauty that is literally breathtaking’. A test whether a carpet would pass those criteria is if ‘the viewer is silenced, in awe of something that emanates a profound level of balance and harmony’, Winitz explained. Obviously there are some less, shall we say ‘sub-
jective’ ways of judging whether or not a carpet represents an opportunity to realise a return on investment.
CHANGING DYNAMICS
Carpet experts, however, say there is no exact science to buying Persian carpets for investment because of the changing dynamics involved. The carpet website, A Candle in the Night, pointed out as an example the purchase by many rich Americans in the early 1950s of large floral pastel Persian Kirmans for their living rooms on the advice of rug dealers. The supposed high quality of the carpet would assure the owners of both longevity and a return on their initial investment. While many of the carpets did last three or four decades what changed were the sizes of homes. In the 1980’s and 1990’s a generation of Americans moved en masse from large landed houses to condominium units with smaller floor areas that obviously required smaller carpet sizes. The situation meant that then market was quickly saturated. The small number of buyers and large numbers of carpets meant that buyers and not the sellers dictating the prices. Simple market economics took over and sellers found themselves out of pocket. However, as with other passion investments there is a silver lining to even this ROI cloud. These investors enjoyed an aesthetically pleasing addition to their homes for an extended period of time. If they had purchased the carpets as pure investments it is likely that they would have chosen a sweet spot in the market and sold off the asset prior to being forced to do so by circumstance. The lesson that bears repeating over and over again is this; when it comes to passion investments, such as classic cars, fine art, or even carpets the buyer must be very clear in their own mind the purpose of their investment. Is it an asset that is purchased as a dispassionate investment, or is it an affair of the heart? Just as you shouldn’t name an animal that you are going to eat so should you not invite passion investments into your home – there’s the possibility that you’re going to fall in love and ignore opportunities to realise your investment. That being said, here are some Investment Life guidelines to provide a simple framework to purchasing an investment grade carpet. As with all investments – if you’re going to be parting with a substantial amount of money consult an expert prior to signing the cheque.