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Why does Tesla becoming a member of the S&P 500 remind Wells Fargo Securities’ head of fairness technique of AOL and the dot-com increase and bust period? He defined on the newest episode of the “What Goes Up” podcast, in addition to why he’s sticking together with his year-end estimate of three,850 for the S&P 500 even after the benchmark index reached that degree within the first month of the yr.
Some highlights of the dialog:
“I keep in mind 1998, 1999 and I keep in mind what was occurring. You had loads of hypothesis, you had loads of retail buyers getting concerned. And we now have loads of humorous issues occurring now, however what was wonderful to me is AOL on the time was a recreation changer. It was an incredible expertise. The stock had an unbelievable run, a run I actually hadn’t seen earlier than.
“And it was added to the S&P late in a yr at a really giant market cap, or very giant weighting. That to me was the start of the top, proper? `99 was a improbable yr for stocks, however for, however after `99 a lot of your tech firms and lots of of your progress firms misplaced 50% to 100% of their value. Now you’ve got one other game-changing expertise in Tesla. And you’ve got a stock that has carried out amazingly nicely. And it is going into the S&P 500 when? December final yr. At a really giant weight or market cap, proper? That is signaling that we’re near the top of the growth-at-any-price sort funding technique. It is not a name out on a specific stock, however what it exhibits you is that we have reached a degree.”
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