Need proof of a speculative bubble?
Closely watched hedge fund manager Jim Chanos says he has the best barometer for gauging where 1 percenters are putting their money, given the Federal Reserve's easy money policies that have been fueling their portfolios to record highs. During an interview Thursday on CNBC's "Squawk Box," he pointed to the stock chart of Sotheby's.
"That's what people are buying," Chanos said.
The chart shows that shares of Sotheby's have peaked before every major financial bubble since 1987, starting with the leveraged-buyout spree that fueled the stock market before the Black Monday crash that year.
Read MoreHow to short this bubble
The stock "double peaked" in the past few years, since rising exponentially following the 2008 financial crisis. Chanos attributed Sotheby's run-up to the Fed's super-low interest rates and aggressive asset purchases, attempts to kick-start a sluggish economic recovery reeling from the subprime mortgage bubble.
The contemporary art market has gone "bonkers" under the Fed's easy money policies, Chanos said. Many credit those policies for creating a "wealth effect" that has increased the prices of all asset classes, stocks and art included.
Read MoreRare stamp from murderer's estate seen setting record
It's as if the Fed now includes asset prices as part of its mandate, Chanos said. Record selling prices at auction houses don't trickle down to the 99 percent, however, Chanos said.
"This is still driven by art, which is socially acceptable conspicuous consumption," Chanos said. "It's one of the ultimate barometers of the 1 percent, or the one-tenth of 1 percent."
Chanos, founder of Kynikos, the largest short-selling hedge fund, said he had a short position against Sotheby's and he advised art investors to tread carefully.
"I own a couple pieces," Chanos said. "Anybody who buys art should be looking to hedge it right now."