Jim Chanos Thinks Art is a Bubble, He Wants You to Short Sotheby’s to Hedge It (BID)

From Art Market Monitor:

 

Robert Frank captures James Chanos’s comments on the art market from his appearance on Squawk Box this morning with a fuller description of Chanos’s argument for shorting BID, Sotheby’s stock:

“In the ’80s, the Japanese were buying Impressionists. Then it was modern art in the 1990s. But in the last 10 years, it’s been contemporary. As I like to point out, these people are still alive producing art,” he said.

So how do you hedge the art market? Chanos said that shorting the stock of Sotheby’s is the closest financial proxy to shorting the contemporary art market.
“For people who don’t want to sell their art, the best thing is to short the stock of Sotheby’s,” he said.

It’s odd that Chanos claims the last 10 years have been about Contemporary art when the most expensive lots sold were by Picasso until the recent Bacon sale with two modern works setting nine-figure records in 2010.

There’s also a problem with the chart Chanos showed (below,) it doesn’t match the market it is supposed to predict. Look at BID against the Dow Jones Industrial Average for the same period (above.)....MORE