Markets are social phenomenon. Damian Hirst's, The Kingdom (seen in picture to the left) recently sold for $18m. My belief is that the level of awareness and nature of the art market means that this piece will in the next 5 years trade for at or below $3.6m. Most Hirst work will trade for below the 08 mark and discount at 80% of peak prices.
Overly popular markets tend to be followed by 70-80% declines. Read Sornette to see this at work from a mathematicians perspective.
Nothing against Hirst, I am sure he is a nice fellow, just that more people want to be seen owning his work than probably really believe in its artistic merit. In a few years, that preserved animal will be seen as a bit of tat in the corner and moved from a place of prominence in homes and galleries to a rather more discrete area in the same home or gallery.
Excessive pride of place is often quickly followed by discrete retrenchment to a quiet corner to save the owner public embarrassment.
Everyone got a little carried away. Here was the peak in my estimate of his $145m sale written up in the FT. He seems like a friendly fellow in this interview:
In retrospect he may be seen as an interesting artist and the most successful taxidermist since PT Barnum. Many will assume the incredible monetary decline in the price of his art will change its value, not true, it will just mean the wandering eye of the money circus is focused elsewhere.
Price and value bump into each other occasionally like drunks at a party and then go on their merry ways. My own interests are works from the Edo period of Japan, Mughal dynasty India and modern Scandinavian, sometimes in fashion and sometimes not. Hirst has made a contribution to art, just don't be fooled if recent price doesn't reflect long term value.
If you want to place bet on the art market, here is the place.