2020 May 7
Big opportunities come infrequently. When it is raining gold, reach for a bucket, not a thimble.
–Warren Buffett, 2009 letter to shareholders of Berkshire Hathaway
This idea from Warren Buffett during the Great Recession is worth serious consideration for artists. Major economic downturns do not happen often, yet when they arrive they can create rare windows for those who are prepared. The question is whether the current or next downturn will follow the pattern seen in past severe recessions, and what that pattern means for your art practice.
To answer this, it helps to look at how major recessions have actually played out over the last several decades. Rather than focusing on exact start and end dates, we can examine the overall shape of two key measures: the stock market and unemployment. Both tend to follow a similar pattern during deep recessions.
The W Trend in Recessions
Severe recessions often create a “W” shape in both stock market performance and unemployment data. This means there are two distinct downturns rather than one smooth recovery. The stock market usually recovers faster than employment and consumer spending. Because art sales depend heavily on disposable income and collector confidence, the recovery for most artists tends to follow the slower unemployment curve rather than the quicker stock market rebound.
Here is how this pattern appeared in two significant past recessions.1970s Recession (Inflation, Vietnam, and Watergate period)
Stock market (S&P 500):
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- Started declining in December 1972
- First major drop of 46 percent by September 1974
- Second major drop of 26 percent by February 1978
- Full recovery took until July 1980 (roughly 7 years and 8 months from the start)
Unemployment:
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- Rose from 5 percent in December 1972
- First peak near 9 percent in May 1975
- Second peak near 10 percent in November 1982
- Did not return to 5 percent until February 1989 (more than 16 years from the start)
2000s Recession (Dot-com and Housing Bubble period)
Stock market (S&P 500):
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- Started declining in August 2000
- First major drop of 46 percent by September 2002
- Second major drop of 52 percent by February 2009
- Full recovery took until March 2013 (roughly 12 years and 8 months from the start)
Unemployment:
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- Rose from 4 percent in August 2000
- First peak near 6 percent in June 2003
- Second peak near 10 percent in October 2009
- Did not return to 4 percent until October 2017 (more than 17 years from the start)
Key Takeaways for Artists
These examples reveal several consistent patterns that matter for anyone building an art career:
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- From a stock market perspective, these severe recessions lasted between 7 and 12 years.
- From an unemployment and spending perspective, the effects lasted much longer, often more than 15 years.
- Unemployment and reduced consumer spending usually lag behind the stock market downturn but take significantly longer to recover.
- What looks like one long recession can also be viewed as two separate downturns back-to-back.
For artists this means traditional sales through galleries, commissions, and collector purchases often remain soft for many years after the stock market has already begun to recover. The period of caution among buyers tends to be extended.
Will Future Downturns Follow the Same Pattern?
While no two recessions are identical, the initial movement in both markets and employment during recent downturns has shown similarities to the W-shaped recoveries described above. Early data alone cannot predict the full outcome, but the historical pattern suggests that any deep recession is likely to produce a long recovery tail rather than a quick return to previous levels of spending.
How to Respond as an Artist
Instead of trying to predict exactly what will happen next, a more useful approach is to prepare for multiple possibilities at once. This involves three steps:
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- Outline three different scenarios based on available information (a likely case, a better case, and a worse case).
- Develop practical strategies for each scenario.
- Choose one primary strategy to begin acting on now, while keeping secondary plans ready if conditions change.
Because a W-shaped recovery tends to unfold over many years, there is usually time to plan carefully rather than making rushed decisions. The most important action is to start building the foundation for whichever scenario unfolds.
Practical Questions for Your Art Practice
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- Are you continuing to create and show work consistently while many other artists slow down or stop?
- Are you building direct relationships with collectors and an audience you own, rather than relying only on galleries or platforms?
- Are you developing multiple income streams so your practice is less vulnerable to any single market?
- Are you positioned to take advantage of lower costs for studio space, materials, or professional development when they become available?
Big opportunities in the art world tend to appear during or right after major downturns. Those who have prepared systems, relationships, and work during the quieter years are usually the ones ready to move decisively when conditions improve.
The artists who treat extended economic caution as a time to build quietly and strategically are often the ones who gain the most ground in the years that follow.
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