Sotheby’s and Christie’s are also on the hook for guaranteed lots, those artworks that are consigned only after the house commits to selling the work above a specific level -- or buying it outright if the bidders don’t. In a rising market, the auction firms can clean up on these deals, but they can also get slaughtered when the market is on the downswing.

As an example, just witness the recent sale of 10 Andy Warhol Skulls at Sotheby’s London earlier this month. The cluster of canvases sold for £4,353,250 ($7,543,312), less than the presale low estimate of £5,000,000 -- a transaction that insiders say cost the house over $1 million. The houses have supposedly cut back on the guarantees for this round of sales.

For a collector, the strategy during the sales should be to bid only on works that you know are hard to find, regardless of whether it’s an up or down market. First-rate examples by painters such as Robert Ryman, Roy Lichtenstein, Brice Marden, David Hockney and Richard Diebenkorn have always been scarce and thus will always be in demand. Ditto for major works by Wayne Thiebaud, Sean Scully and Joseph Cornell, to name just a few others.

Even if you feel like you are overpaying, it’s better to buy a great painting now, because you may never have another chance. Unless you’re an octogenarian, and aren’t in it for the long run, what you pay now won’t be that important in the future.

Then there are the great artists whose works always seem to be available: Mark Rothko paintings on paper, small Maos by Andy Warhol, late works by Ed Ruscha, Josef Albers “concentric squares” and Gerhard Richter “squeegee” paintings. These are paintings where a buyer can drive a hard bargain. Since there’s no sense of urgency, you only buy the above if you perceive you are getting good value. It’s smart business to let them pass at the sales and then make an offer afterward.

Many art-market observers take a skeptical view of the hyper-appreciation of post-1980s artists such as Richard Prince, Elizabeth Peyton and Cecily Brown; ditto for recent European high-flyers like Neo Rauch, Luc Tuymans, Marlene Dumas and Peter Doig. The argument is that not enough time has passed to accurately assess their places in art history.

If the contemporary art market is going to suffer a major correction, you’re better off staying away from such speculative wares at auction. Rather, you should try to buy their work from their primary dealers. While that sounds easier said than done, be patient. In six months, I daresay that their dealers will suddenly be less concerned about who you are in the art world hierarchy than whether or not you can pay. They will be under intense pressure from the artists themselves to keep the gravy train rolling.

A final category is the artists who are being hoarded by the world’s biggest collectors/speculators -- specifically, Takashi Murakami, Jeff Koons and Damien Hirst. While they’re all strong artists, there’s no way, despite the recent “less than meets the eye” $200-million Hirst sale in London, that their investors will be able to defend their positions. No one has enough money to prop up these artists in perpetuity. The artists are too prolific -- their “assembly line factory” manufacturing philosophy will work against them.

At the end of the day, as always, your only protection is buying quality works by significant artists. All you need to do is consult the auction catalogues from the acme of the last boom year (1989) and compare the results for the same artists from that market’s nadir (1993). Those who held up the best may provide a few clues as to what might happen this time around. But if you’re feeling lazy, and don’t want to do the research, you can always buy an Alexander Calder.

RICHARD POLSKY is a private dealer based in Sausalito. He is currently working on a sequel to his book I Bought Andy Warhol, to be called I Sold Andy Warhol (too soon). Comments can be directed to: Polskyart@msn.com