Selloff created best discounts in years: JPMorgan's Tom Lee
Longtime stock market bull Tom Lee has kept his optimistic outlook intact after Monday's brutal selloff.
In fact, he's telling investors to prepare to buy the dips after the selloff, and some of the best price-to-earnings discounts can be found in the companies most exposed to emerging market currencies, said Lee, JPMorgan Chase's chief equity strategist, on Tuesday during an interview with CNBC.
They should also prepare for modest losses if the selloff continues after Tuesday's slight rebound, Lee said, adding that a deeper crisis doesn't appear imminent. Lee said some of the stocks that saw the biggest declines Monday and last week now present the biggest discounts in years.
"A lot of people, when markets are down, have a hard time buying," Lee said on "Squawk on the Street." "So what you have to be willing to do is buy and be willing to take a bit of draw down or some selloff here."
(Read more: Stocks gain after bloody Monday)
A combination of concerns over emerging market currencies, the Fed's stimulus pullbacks and questions over lackluster U.S. economic data caused a much-worse-than-expected January on major stock market indexes, leaving market observers to question whether 2013's record gains could continue into this year. Stocks saw a modest rebound just past noon Tuesday.
Lee said lower gasoline prices and favorable interest rates will help drive growth at a household level, which will lead to improved economic data. He cautioned investors that the markets have not reached a "turning point" just yet, and that he would have to re-evaluate his thesis if the global economic picture worsens.
"It's always good to be a bit contrarian when you do see a lot of headlines like that," Lee said. "I actually think it's pretty encouraging."
(Read more: Markets fear economy slowing)
Stocks seem to have edged closer to the bottom of the selloff that caused the worst day on Wall Street in months, including a more-than-300-point drop in the Dow, two market professionals told CNBC on Tuesday.
"We're probably close," PNC Financial Services' Jim Dunigan told CNBC during an interview on "Squawk on the Street," adding that the S&P 500 could drop to 1,707 points before rebounding. "We're certainly in range here where we're starting to see the bottom," he said.
Monday's major selloff heightened fears, but Brian Belski, BMO Capital Markets' chief investment strategist, agreed that the bottom seems near.
"Calling bottoms is very difficult," Belski said. "I think it's a bit of a fools' game on a short-term basis. We've had an excessive amount of selling, especially into the weekend and then into Monday. Typically [and] historically when you see those types of moves, it usually portends to a bottom."
Dunigan said he believes the U.S. economy remains on solid ground despite a weak jobs report last month and disappointing manufacturing data released Monday morning. The Fed's monetary policy still seems friendly, even in light of plans to scale down its massive asset purchases, and fourth-quarter earnings were very positive, he said.
(Read more: Market strategists: Don't overreact here)
"So as we ended 2013, expectations about what 2014 would be like were impacted," Dunigan said. "And that sets up for some disappointments. The markets are all about expectations."
In December, Lee predicted that the U.S. stock market could see a 5 percent pullback if the Fed decided to scale down its asset purchases that month, which the central bank ended up doing. He described the pullback as "head fake."
—By CNBC's Jeff Morganteen. Follow him on Twitter at
@jmorganteen and get the latest stories from "Squawk on the Street."