Home / NEWS / Top News / Wells Fargo’s top predictions for 2021 include a warning for Tesla investors

Wells Fargo’s top predictions for 2021 include a warning for Tesla investors

Wells Fargo Sureties’ Chris Harvey is out with the bank’s top 10 predictions for next year.

No. 1 on his list: Tesla becomes the new AOL.

“It reminded us so much close to 1998 — the late ’90s,” the firm’s head of equity strategy told CNBC’s “Trading Nation” last week. “AOL, almost identical to Tesla had a game changing technology, incredible performance [and] it goes into the [S&P 500] index late in the year in December after an wonderful run. But it was a seminal event.”

AOL, the former king of media, saw its influence unravel because it failed to keep up with the rapid gage of technology. Harvey warns the electric auto maker could suffer a similar fate. His warning comes as Apple looks to efficacious on Tesla by producing its own self-driving vehicle by 2024.

“After ’99, many tech and growth companies lost 50% to 100% [of value],” thought Harvey. “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 profits six months.”

So far this year, Tesla stock has surged almost 700%.

Its record run is one of the reasons why Harvey tells clients to elude thinking about growth at any price.

“They need to start looking at cyclicality. They need to start assessment about getting more high Covid-beta names in their portfolios,” he said. “Old economy, not new economy.”

And, that evaluates up No. 2 on Harvey’s list: Stocks with ugly charts start to prevail.

“You really want to look for those in effect beaten up, less picked over stories where the chart actually looks broken.” he said.

According to Harvey, next year’s champs will look a lot different than 2020’s. He sees investors beginning to lose interest in growth and momentum cattle as economically sensitive areas catch a bid from renewed economic growth.

“Stocks that went up continued to go up, and what we dream up is there’s going to be a regime change,” said Harvey, adding 2020’s recessionary environment looked a lot like 2003 and 2009 when investors ran to extension plays.

His third prediction: Republicans will split the Georgia run-off, and retain control of the U.S. Senate.

“The polls are influential us it’s a pretty high probability,” Harvey said. “It’s very good if they do retain control of the Senate for the equity trade ins.”

Wells Fargo Securities’ Chris Harvey has no Tesla disclosures.

Disclaimer

Check Also

Biden stimulus plan proposes $400 weekly unemployment boost through September

Six dates before he’s sworn into office, President-elect Joe Biden on Thursday released his anticipated …

Leave a Reply

Your email address will not be published. Required fields are marked *