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There's room left to run after Dow 20K, but smart money is keeping an eye on these metrics

Strategists are keeping an eye on valuations after the Dow Jones industrial average breached the 20,000 level Wednesday morning, Ed Yardeni, president and chief investment strategist at Yardeni Research, said on CNBC's "Halftime Report."

As the market moves higher, he explained analysts are raising their forward earnings estimates as well.

"What changed? Everything changed on Nov. 8. We had a radical regime change in Washington, D.C., and now I think we can actually look forward to the fundamentals of earnings validating these euphoric [price-earnings] multiples," Yardeni said.

Richard Saperstein, chief investment officer at HighTower Treasury Partners, said on "Halftime Report" that naturally there are risks to investors, "if the animal spirits are ignited and the market moves to excessive valuations."

However, he said, "the market is not excessively valued right now." While the market may continue to sell at "stretched valuations," Saperstein argued that its likely earnings will continue to grow as the environment improves.

Michael Farr, president of Farr, Miller & Washington, explained there's a disconnect between share prices and valuations.

"Could [the Dow] go up another couple thousand points on this momentum? Yeah, it could, but it's going to go up a lot faster than the fundamental earnings and gross sales are going to increase" he said on "Halftime Report."

If the rally continued, Farr said he would grow more cautious as the market got more expensive.