“
‘It reminded us so much of 1998 – late’ 90s’
“
That’s Chris Harvey, head of equity strategy at Wells Fargo Securities WFC,
talking to CNBC about how Tesla’s TSLA,
recent inclusion in the S&P 500 SPX,
is reminiscent of the last days of the dot-com bubble. Specifically, in highlighting Well Fargo’s 10 Best Predictions for 2021, Harvey made a comparison between Elon Musk’s electric car company and AOL, a poster child of the Internet madness decades ago.
“AOL, similar to Tesla, had breakthrough technology, incredible performance… it hits the index late in the year in December after a great run,” said Harvey. “But it was a groundbreaking event.”
Following its relentless rally in the late 1990s, AOL, like many causes of the dot-com bubble, couldn’t keep up with time, which is a risk that Tesla, up nearly 700% this year, will also face the next year he explained. “After ’99, many technology and growth companies lost 50% to 100% [of value], ‘Said Harvey. “We think everything will go much faster in 2020. So if it took 12 months for the end to start, it’s now going to take six months. “
According to Harvey, cyclical names, “COVID beta,” are a better place for investors. “Old economy, not new economy,” he predicted. Here’s the CNBC summary of the full list:
Watch the interview for more on Harvey’s thoughts on Tesla and 2021:
Tesla shares fell lower before Monday’s opening bubble, while futures on the Dow Jones Industrial Average YM00,
technically demanding Nasdaq Composite NQ00,
and S&P 500 ES00,
all pointed to a positive start to the week.