JPMorgan's Tom Lee has long been a bull on stocks, and even as the has risen impressively to meet his 1,775 year-end target, he has not lost his enthusiasm for the market's potential. In fact, the unrelenting bearishness among so many on Wall Street is precisely the reason he foresees stocks sailing higher still.
"No one's really embraced this as a sustainable bull market, and I think when we start to see the market that way, multiples could expand a lot—especially for sectors like technology," Lee said on Tuesday's "Futures Now."
Lee, who is JPMorgan's chief U.S. equity strategist, draws on personal experience to make the case that investors "aren't really that bullish": "I still continue to find that both in my meetings with professional managers and with individual investors that they're viewing this rally purely as a Fed-induced sugar high."
Because they take such a dim view of the market, investors are still positioned relatively bearishly, according to Lee.
"They haven't made much change in allocations—they're happy with their stocks, but in a lot of cases, a lot of asset allocators are actually selling equities," Lee said.
But the strategist throws cold water on the whole thesis that stocks have rallied despite weak fundamentals.
"You have to remember that as you start the year, everyone's resetting their outlooks, companies are resetting their bar, I think a lot of major sectors are going to say, 'We haven't put capital to work for the next couple years and yet we didn't have the second recession people were talking about,' " Lee said.
"And if capital spending picks up, that's going to be good news for S&P profit growth, which really helps stocks. I don't have a particular view right now of where we start 2014, but I wouldn't necessarily start out by thinking it's going to be bad."
And once the remaining bears come around to his perspective, Lee believes that the market could go much higher indeed.
—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.
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