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Originally Posted by BoyAlley
I happen to have a rather extensive art collection containing many ORIGINAL Picasso drawings. I'm rather well versed.
I agree that certainly final auction prices at Sotheby's or the like, and high end gallery sales, delimited the high end of the piece's value. In fact, those prices are what professional appraisals are based on. This is what the piece could be expected to sell for at auction or high end commercial gallery.
I think where we differ, is that you're assuming these pieces were bought at a high end gallery or auction. When if fact, the situation is more similar to a brokered deal on the "secondary" art market.
As for increases in value, certainly no one can predict that with any certainty. I agree with you there 100%. But it's certainly been the case that the art market has been trending upward, and not the other direction. 
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I'm actually not assuming that these objects were bought at a high end gallery. I am assuming, and I think I am correct in that, that they were bought at a rather visible and professional dealership. Those, from what I have seen, have a tendency not to greatly undervalue objects.
Appraisals are generally based on few recent and visible sales of fairly similar objects. The problem with that is that that typically represents the maximum of what one could get, rather than giving a good indication of how likely it is to make a sale based on a given price.
A good example of this problem is my father. Some years ago, he found some good sources of 15th and 16th century icons. Not being an expert with regards to that specific material, he got some expert opinions, which confirmed his suspicions that he could acquire them at much lower prices than the typical market rate.
Only after having acquired a number of them did he find out that although auction prices tended to be rather high, there wasn't enough demand for him to be able to sell many of them. So, to this day, he has entirely too many of them hanging on his walls in every conceivable place
What I'm trying to illustrate is that while appraisals can give decent indications of what rare pieces for which there is a high demand will make in very specific contexts, in many cases they paint a rather unreliable picture of what something will sell for.
If that wasn't the case, every art expert would easily become extremely wealthy simply by buying up loads of art from dealerships and selling them at high end galleries and auctions. Some do this in reality, of course, but finding good deals is very rare, and very visible dealerships often aren't the best place to find them simply because their prices tend to conform to standard market values already.
As for the market trending upward, that trend will probably continue - although, with the recent commercialization of art, a slowdown should be expected to occur, simply because much current art is already held as a form of investment, and the untapped commercial potential of the art industry inevitably gets smaller as business continues to tap it
To keep up with or even beat the general trend, though, it is necessary to follow specific interests and hypes, at least partly. Because while art prices are growing, they are certainly not growing evenly across the board.