Winners suggest ‘nobody cares’ about recovery: Rich Bernstein


Institutional Investor Hall of Famer Richard Bernstein sees a risky market dynamic.

He’s questioning why so many investors prefer momentum names in technology when the economy is getting ready to boom.

“The whole innovation disruption thing is becoming a sucker’s bet,” the Richard Bernstein Advisors CEO and CIO told CNBC’s “Trading Nation” on Wednesday. “Fundamentals are improving dramatically as you look towards 2021, and it’s like nobody cares.”

Bernstein, who has spent decades on Wall Street and ran strategy for Merrill Lynch, has been bearish on technology. Last year, he told “Trading Nation” the tech rally showed parallels to the dot-com bubble.

That rally picked up steam during the coronavirus pandemic, due to the role technology has started playing in a new work-from-home culture.

The tech-heavy Nasdaq is up 41% so far this year and 84% since the March 23 low. On Wednesday, the index hit another all-time high.

“The unique opportunities come when fundamentals are improving and nobody cares,” he said. “You have that basically everywhere but sexy tech.”

But with the vaccines coming into the marketplace, Bernstein expects stocks closely tied to the economy will catch a bid. He lists energy, materials, industrials and small-cap value among his 2021 top plays.

“One of the big stories for 2021 is going to be a huge rebound in earnings. We’re coming off a pandemic-depressed base,” Bernstein said. “Right now, the sector that has the highest earnings growth projections by analysts for 2021 is the energy sector. Nothing is even close.”

The S&P 500 energy index is off 34% so far this year.


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