Chris Harvey, head of equity strategy at Wells Fargo makes the comparison between AOL and Tesla.
“AOL, similar to Tesla, had a game changing technology, incredible performance… it goes into the index late in the year in December after an amazing run,” Harvey said. “But it was a seminal event.”
Following its relentless rally in the late 1990s, AOL, like many causalities of the dot-com bubble, failed to keep up with the times, which is a risk that Tesla, up almost 700% this year, also faces in the coming year, he explained. “After ’99, many tech and growth companies lost 50% to 100% [of value],” Harvey said. “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.”
For Harvey, better places for investors to look include cyclical, “COVID-beta” names. “Old economy, not new economy,” he predicted.