Tesla, you’ve got mail and it’s not good a message.
The top Wells Fargo prediction for 2021 is that Tesla will head the way of AOL, a 1990s internet king before its rapid dot-com demise.
“It reminded us so much about 1998—the late ’90s,” Wells Fargo Securities head of equity strategy Chris Harvey told “Trading Nation” on CNBC, sounding as annoying as the sound of a dial-up connection to Tesla people.
“AOL, similar to Tesla, had a game-changing technology, incredible performance,” Harvey continued. “It goes into the (S&P 500) index late in the year in December after an amazing run. But it was a seminal event.”
AOL could not maintain pace with technology, a comparison that Harvey is making to how Tesla and Elon Musk have led electric vehicle technology much like AOL was the greyhound surging ahead early in the late-’90s internet race.
Tesla’s stock has increased by almost 700% this year, but competitors such as Apple are popping up. Harvey suggests investments in “COVID-beta” names that cyclical.
“After ’99, many tech and growth companies lost 50% to 100% (of value),” Harvey told CNBC. “We’re thinking, in 2020, everything happens much faster. So, if it took 12 months for the end to begin, now it’s going to take six months.”
Wells Fargo’s No. 2 prediction for 2021 is that investors will lose interest in growth and momentum stocks. No. 3 predicts a party split in the Georgia runoff elections to keep the Republican Senate in control.
Harvey also predicted that 2021 would be “the year of not good enough.” Don’t feel bad, 2021, you just do your best.