I'm no artist.  That was clear to me in first grade.  I struggled through most artistic endeavors.  I was even instructed during our fifth grade Holiday music presentation to hold my instrument - a Yamaha Recorder - to my mouth, but don't dare try to play the thing.

So I may not be the best person to opine about the finer aspects of the art world.  However, sometimes things are so obvious that even I can spot when the emperor has no clothes.

Christie's and Sotheby's - the dynamic duo that make up the global art auction oligopoly - held contemporary art auctions last month that pulled in a record haul for the sellers.  Art for me is like wine, another area where I'm no expert.  I taste wine and either like it or not.  Same for art, I see it, I like it.  Or not.  My tastes lean toward the old Masters.  Call me a fuddy-duddy. I have no interest in contemporary art.  I dare say it's not art in many cases.

Granted, beauty is in the eye of the beholder.  That must have been the case with these recent auctions.  Artist Mark Rothko
(1903-1970) was a big seller at both auctions.  He painted with a certain style and quality that reminds me of, well, a fifth-grader's best work.  Actually, a good first-grader could do this.  Untitled (Yellow and Blue) sold for $46.5 million while No. 10 (1958) pulled in a cool $82 million.  It was thought No. 10 was prized because the somber colors matched Rothko's mood at that point in his career.  Uh huh.  Right.

Mona Lisa and No. 10 (1958)

What can we learn from these seemingly absurd auction prices?  Clearly there is plenty of spare change floating around among the billionaire jet-set.  And opinions about artistic merit are just that: opinions.  I wouldn't pay fifty bucks for a Rothko.  To me they're a far cry from Rembrandt, Monet, Da Vinci or Van Gogh.  I'd even venture that most people would pick an old Masters painting over Mr. Rothko's first-grade finger painting. But some poor soul - oops, rich soul - forked over $82 million for a Rothko finger-painting.

Could it be that we are witnessing a contemporary canvas bubble?  Or are the buyers playing the greater fool game, hoping to peddle these works to another fool down the road?  Does the high price authenticate the artwork as intrinsically valuable?  Or is it the scarcity factor, that each piece is an original?

As you might guess, I don't have any answers.  In fact, I'm puzzled.  But while I can't calculate the value of any particular artwork, it is possible to value a business.  Far less subjectivity is involved, and while a range of values is usually the result, it's a lot narrower than the $82 million paid for a Rothko versus the fifty bucks that I might pay.

Our valuation efforts rely more on facts and less on fashion.  That's fortunate for us, because I would be lost in an art auction, trying to make sense of the prices - not to be confused with values - that collectors put on this stuff.  Because it really makes no sense.  It's much easier to analyze a company's future prospects for products, markets, competition, and the resulting sales, earnings and cash-flow.

Investing in the stock market is no different than investing in a private business.  Imagine buying a gas station, dry cleaner, hardware or convenience store or a widget maker.  You'd review the sales, earnings and cash-flow the business generates.  You'd calculate a fair price for the cash-flow that can be taken out of the business from here to eternity.  And you'd pay no more than that.  That's essentially what we do, only it's done in the public markets.

So we won't be spending any time perusing art auction catalogues or trying to fathom the value of contemporary "art."  We'll stick to more prosaic pursuits where beauty is less in the eye of the beholder, and more in the objective facts and numbers.

I'm guessing I might not get invited to the next Christie's or Sotheby's auction.  But that's OK, as watching a group of Emperors without clothing isn't my idea of a good time.