Correction could top 5 percent: Wien

Stocks, while inexpensive, could still have farther to fall, Blackstone Advisory Partners Vice Chairman Byron Wien said Wednesday.

"You know, the stock market is not expensive. The price-earnings ratio of the market is very reasonable right now," he said. "I think the market has further to go on the downside."

On CNBC's "Fast Money," Wien added that stocks weren't necessarily predictable.

"The market always has a tendency to go farther than you think, up and down," he said. "And I think the correction could be greater than 5 percent."

Wien laid out his case for where he saw stocks headed for the remainder of 2013.

"My concern about the second half is that the economy isn't building the kind of momentum that everybody thought," he said. "When the stock market was doing well and it looked like the economy was going to pick up, there were a lot of people who thought economic growth was going to go to 3 percent real. I don't think that's likely. I think we could have another couple of quarters at 2 percent."

Looking at the amount of quantitative easing from the Federal Reserve, Wien noted that its balance sheet in 2008 was $1 trillion.

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"At $85 billion a month, they're going to put $1 trillion in this year. And they can't get the economy to grow at 2 percent in the first half," he said. "I don't think the monetary expansion is having the impact."

Wien saw a narrow effect of the Fed's asset purchases.

"I think if you look at it, a significant portion of the money that the Fed has pumped into markets has gone into financial assets, pushing stocks up and keeping yields low," he said.

Wien said that he preferred sectors with outsized performance potential.

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"I like the open-ended areas, where the earnings surprises can be beyond what you expect, where it isn't just going to be an incremental call," he said. "Technology and pharmaceuticals appeal to me."

Wien also weighed in on the investment climate abroad.

"There's a major shift in approach in Europe, and the shift is away from austerity," he said. "The Europeans have finally woken up to the fact that austerity is bad news, not good news. And I started to buy Europe at that point."

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China, Wien added, could hit a potential speed bump.

"I've been a bull on China. I think they will grow in the 7s," he said. "I think reforms are a negative for the economy, and they're going to take a long time to kick in."

(Read more: China crash risks are 'overblown': Stephen Roach)

— By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

— CNBC's Katie Young contributed research to this report. Follow her on Twitter: @katiecnbc.

Trader disclosure: On Aug. 21, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long BBRY; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long GE; Pete Najarian is long PFE; Pete Najarian is long MRK; Pete Najarian is long LLY; Pete Najarian is long BMY; Pete Najarian is long MNKD; Pete Najarian is long SUNE; Pete Najarian is long KWK; Jon Najarian is long AAPL; Jon Najarian is long EBAY; Jon Najarian is long GRPN; Jon Najarian is long MSFT; Jon Najarian is long QCOM; Jon Najarian is long MSG; Jon Najarian is long TOL; Jon Najarian is long JCP; Jon Najarian is long HLF; Jon Najarian is long CREE; Steve Milunovich is long AAPL; Steve Milunovich is long UBS.