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Tom Lee warns against making the mistake investors made in 1990

Perennial bull Tom Lee said Thursday he's not convinced low bond yields are flashing a bearish signal.

In fact, the co-founder of Fundstrat Global Advisors suggested they could simply amount to a 1990-style head fake.

"In 1990, bond yields stabilized … after huge declines from '82 to '90, and there were a lot of investors who thought the bull market would run out of steam in 1990, and they missed really the 10 years of the biggest returns in the stock market," Lee told CNBC's "Squawk Box."

The U.S. 10-year Treasury is yielding about 1.5 percent, up from a 52-weak low of 1.36 percent.

Lee acknowledged it is "strange" to see negative bond yields around the world, but noted the amount of debt yielding negative returns has been moderating.

Further, while low bond yields typically mean markets aren't pricing in inflation and expect slow growth, Lee thinks they also reflect the search for carry, or a trade in which investors borrow at low rates in order to invest in an asset with higher returns.

Lee said it's starting to make sense for investors to think about growth trades.

"That's why commodities are working. That's why equities are working, and I think some of the economic data is supporting that," he said.

Fundstrat expects the S&P 500 to gain 6 to 8 percent by year-end to close 2016 at 2,325.


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