Rob Arnott Warns Tesla Stock Is Showing Signs of a Bubble — and Indexers Are About to Buy High
Tesla’s soaring shares may start heading downhill after the electric-car maker joins the Standard & Poor’s 500 stock index next week, with funds tracking the index poised to buy high, according to Research Affiliates. “Tesla is entering the S&P 500 with a stupendously high valuation,” Research Affiliates founder Rob Arnott and the firm’s Vitali Kalesnik and Lillian Wu said in a paper released Thursday. “Given all the classical signs of a bubble in Tesla’s stock, and the evidence of 31 years of S&P additions and deletions, December 21–22 likely marks the beginning of a revers...