The Dow Jones Industrial Average could peak as high as 20,000 four years from now, JPMorgan Chief U.S. Equity Strategist Thomas Lee told CNBC on Monday. He predicted "2,400 [or] 2,500" as the top for the S&P 500 Index in a similar time frame.
Making his bullish case, Lee pointed out in a "Squawk Box" interview that the market has been able to reach multi-year highs, despite investor reluctance to be over-weight equities.
On Friday, the S&P closed above 1,500 for the first time since Dec. 10, 2007. The Dow finished at its highest level since Oct. 31, 2007.
"There's a lot of reasons investors are sort of fighting the tape," Lee said. "There are still a lot of memories of '08. We still have a taint on owning stocks."
But he believes that will continue to fade and the stock market could top out "around 18, 19, 20,000 Dow … that's obviously 4 years away."
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Lee explained the math behind that prediction. "We're at $100 of S&P earnings. … [But] the cycle peak in earnings is closer to $150. That really follows the historical pattern of S&P profit cycles."
He added, "Mid-cycle S&P multiples are at 17 [times earnings]. We're at 13 or 12 and a half."
"If you put a 17 multiple on $150, the S&P really sort of peaks around 2,400 [or] 2,500" on a time horizon similar to the Dow's top, Lee concluded.
—By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC