I had a similar experience at the Robert Miller Gallery. The gallery was offering a small (8 x 10 in.) Tom Wesselmann Smoker canvas, from the 1970s, for $60,000. Once again, just a scant two years ago, it would have been approximately $35,000. Is the art market really that scalding hot?

Looking for answers, I attended the 2004 Armory Show. As anyone who went will attest, it was an overwhelming event. In terms of attendance, the two piers were packed to the point of barely being able to see the artwork. As for sales, business appeared to be brisk -- especially for works under $20,000. For instance, the Richard Heller Gallery from Los Angeles was rapidly going through a roll of red dots.

One of Heller's big sellers was Marcel Dzama. When Heller held his first Dzama show, the drawings, composed of watercolor, ink, and root beer (a la Ed Ruscha), were a mere $60 each (no, that's not a typo). The show easily sold out. I remember thinking how the dealer Marc Selwyn had been smart to commit to ten of them. What's a $600 investment if you like the work and think the artist is going places? Dzama's works now command $1,100 apiece.

At booth after booth, I saw quite a number of other inexpensive works being gobbled up. However, I also witnessed the sale of a fair number of relatively expensive ($10,000-$20,000) works by less established artists -- such as some of those who were selected for the current Whitney Biennial. Then there were the mid-career artists, like Caio Fonseca, whose medium-size pictures have entered the rather pricey range of $45,000-$65,000. Fonseca's dealer, Paul Kasmin, is probably having fun selling those pretty canvases.

However, to really put things into perspective, all one had to do was walk over to the PaceWildenstein booth. A brand new ten-inch-square Robert Ryman painting was $100,000 and a new 12 x 12-in. Agnes Martin weighed in at a hefty $250,000.

As a private dealer, I'm in the business of placing bets on those artists who produce quality work and are undervalued. Sure, if I really thought Marcel Dzama was going to make it, I could easily afford to buy ten drawings at $1,100 each. But he's not my taste. His work seems to be part of a current trend of artists who have been influenced by cartoonists like R. Crumb. Others in this category include Christian Schumann and Marc Bell, who just had a successful show at the Adam Baumgold Gallery. In fact, "Ace" Baumgold told me that he sold 60 Bells at prices that averaged $750.

Regardless of my personal "likes and dislikes," there's something to be said for an artist who sells for hundreds of dollars rather than thousands.

As for speculating on some of the young artists who were selected for the Whitney Biennial, that's a case of risky business. If you were to sift through past Biennial catalogues -- from at least ten years ago -- chances are you would marvel at the number of artists who never made it. That's why buying a current young hot shot and spending $10,000-$20,000 is too rich for my blood.

When I look at mid-career artists who are in the $50,000 range, I also find the future scenario to be scary. Not to pick on Fonseca, but for the same $50,000, I can still buy a small (but not tiny) John Chamberlain, a high-quality Joseph Cornell collage, a recent small Ed Ruscha canvas, an Andy Warhol five-inch "Flowers," and even a black-and-white Richard Diebenkorn figure drawing. All of these artists, safe to say, are permanently ensconced in the world's top art museums.

That brings us to Robert Ryman and Agnes Martin. I can easily understand why a miniscule Ryman can be worth $100,000 or more. He's one of the top living painters and his work has already survived the test of time (I consider the test of time to be a minimum of 20 years). Vintage small works from the late 1950s and early 1960s can easily bring $250,000 at auction. I find it a lot less frightening to potentially spend $100,000 for a new Ryman than $50,000 on a new Fonseca. An artist like Ryman, who has genuinely brought something fresh and innovative to the course of art history, is a sure bet. That's what you're paying $100,000 for. Ditto for Agnes Martin.

Yes, one could create a valid argument that all contemporary art is too expensive. But that's not the point. The point is that those artists who have paid their dues, survived the winnowing out process, and have created works of lasting significance, deserve their high prices. Most young artists should be priced like Marcel Dzama and Marc Bell -- under $5,000 -- and most mid-career artists should be priced under $20,000 -- until it's apparent that their achievements are long lasting.