Is Tesla the next AOL? This is what this strategist warns

“It reminded us so much of 1998 – the late ’90s.”

This is Chris Harvey, Head of Equity Strategy at Wells Fargo Securities WFC,
talks to CNBC about how Tesla’s TSLA,
+ 2.44%
recent inclusion in the S&P 500 SPX,
+ 0.35%
reminiscent of the last days of the dot-com bubble. Specifically, with emphasis on Well Fargo’s top 10 forecasts for 2021, Harvey drew a comparison between Elon Musk’s electric car business and AOL, a poster child of the Internet frenzy decades ago.

“AOL, similar to Tesla, had a game-changing technology, incredible performance … it’s going into the index after an incredible run in late December,” Harvey said. “But it was an important event.”

After its relentless rally in the late 1990s, AOL, like many causes of the dot-com bubble, has not kept up with the times, which is the risk that Tesla, which is almost 700% higher this year, will also be in the coming year. facing, he explains. “After ’99, many technology and growth industries lost 50% to 100% [of value], ”Harvey said. ‘We think in 2020, everything will happen much faster. So if it took 12 months before the end started, it’s going to take six months. ”

For Harvey, the best places for investors are to take cyclical, “COVID-beta” names. “Old economy, not new economy,” he predicted. Here is the full list from CNBC:

Watch the interview for more information on Harvey’s thoughts on Tesla and 2021:

Tesla shares floated lower ahead of Monday’s opening clock, while the futures contract on the Dow Jones industrial average YM00,
+ 0.18%,
technical Nasdaq Composite NQ00,
+ 0.24%
and S&P 500 ES00,
+ 0.27%
showed everyone a positive start to the week.