Rich Bernstein has seen this movie before.
In a tweet on Wednesday, Rich Bernstein, the CEO of Richard Bernstein Advisors and the former Merrill Lynch strategist, said: “#Energy CEOs bullishness seems to mimic #Tech CEOs calling tech bottom in Summer 2000.”
In the summer of 2000, the Nasdaq was trading at around 4,000 or so, down from the tech index’s March peak above 5,000.
The Nasdaq wouldn’t bottom, of course, for another two years when it hit 1,200.
Bernstein’s comments follow noise out of some oil CEOs, notably Continental Resources Harold Hamm, that the oil and gas industry will survive the more than 50% drop in oil prices that has been seen over the last several months.
In an interview with Bloomberg late last month, Hamm said that as producers cut back on spending, oil prices will recover.
As Bloomberg reported:
Well completion costs should come down in the future, Hamm said, adding that if a producer can save 5 per cent of those costs, it can wait a year to go forward. If more producers take that approach, the biggest drop in oil prices in five years will quickly be a memory, he said.
“Analysts will be able to see this supply going away within the first half and say, ‘Woo, that projection was wrong. These prices are way too low. Supply is not going to be replaced at these prices, so it’s gonna have to come back up,'” Hamm said.
Hamm added that while the number of oil rigs in use has fallen, the same thing happened in 2008 and the industry was fine.
“At that time, there wasn’t no bust up there,” Hamm told Bloomberg. “There was a slowdown felt. It helped everybody catch their breath.”