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‘It reminded us a lot about 1998 – late 90s’
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This is Chris Harvey, head of stock strategy at Wells Fargo Securities WFC,
talking to CNBC about how Tesla’s TSLA,
recent inclusion in the S&P 500 SPX,
it is reminiscent of the last days of the dot-com bubble. Specifically, Harvey, in highlighting Well Fargo’s top ten predictions for 2021, made a comparison between Elon Musk’s electric car company and AOL, a poster boy for the Internet frenzy decades ago.
“AOL, similar to Tesla, had revolutionary technology, incredible performance … it enters the index at the end of the year, in December, after an incredible race,” said Harvey. “But it was a seminal event.”
After its relentless rally in the late 1990s, AOL, like many dot-com causes, has been unable to keep up with the times, which is a risk that Tesla, almost 700% this year, also faces next year, he explained. “After 99, many technology and growth companies lost 50% to 100% [of value]”Said Harvey. “We are thinking about 2020, everything happens much faster. So, if it took 12 months for the end to start, now it will take six months. “
For Harvey, the best places for investors to look include cyclic “COVID-beta” names. “Old economy, not new economy”, he predicted. Here is the summary of CNBC’s complete list:
To learn more about Harvey’s ideas about Tesla and 2021, watch the interview:
Tesla’s shares were falling before Monday’s opening bell, while futures at the Dow Jones Industrial Average YM00,
High-tech composite Nasdaq NQ00,
and S&P 500 ES00,
pointed to a positive start to the week.