{"id":24187,"date":"2013-01-28T20:11:06","date_gmt":"2013-01-28T19:11:06","guid":{"rendered":"http:\/\/feedproxy.google.com\/~r\/zerohedge\/feed\/~3\/vl365D1oR7w\/story01.htm"},"modified":"2013-01-28T20:11:06","modified_gmt":"2013-01-28T19:11:06","slug":"jpms-tom-lee-announces-his-dow-jones-industrial-average-price-target-20000","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/breaking-news\/jpms-tom-lee-announces-his-dow-jones-industrial-average-price-target-20000\/","title":{"rendered":"JPM’s Tom Lee Announces His Dow Jones Industrial Average Price Target: 20,000"},"content":{"rendered":"
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Back in July 2008, just before all hell broke loose and the S&P was trading in the upper 1,200s, everyone’s favorite permabull, JPM strategist famously reiterated his S&P 500 price target<\/a> for the end of 2012: 1450<\/strong>. Two months later Lehman filed for bankruptcy, and 4 months later the S&P closed 2008 some 40% lower than said price target. Another two months later and anyone who had listened to Tom Lee lost 50% of their investment.<\/p>\n

Today, as the Fed’s balance sheet crosses $3 trillion, and the global central banks have pumped a total of some $15 trillion into the markets, Tom Lee ws back on CNBC with what is his most permabullish prediction ever: he now expects the S&P to generate some 150 in earnings to which he applies a 17x multiple. His conclusion “If you put a 17 multiple on $150, the S&P really sort of peaks around 2,400 or 2,500.” In Dow terms, this means a Dow Jones Industrial Average of, drumroll, 20000<\/strong>. He does, caveat it, however: “that’s obviously 4 years away.” And if Tom Lee was off by 40% in 4 months<\/em>, we can’t help but wonder what the hit rate on his 4 year<\/strong><\/em> prediction will be, and if, by using the same ruler extrapolation mechanism he applies to corporate earnings nand multiples one extrapolates the Fed’s balance sheet at some $7 trillion in 4 years, what a loaf of bread will cost just as the DJIA crosses 20,000. For future humor purposes, it may be useful to bookmark this post.<\/p>\n