Salient to Investors:

The S&P 500’s P/E ratio is below the ending level of 8 of the 9 bull markets since 1962, below the average of any bull market since Reagan, and up 35 percent since March 2009 versus an average 55 percent in bull markets since 1962. 245 of 500 S&P 500 companies have P/E ratios below their 5-year means versus 196 same time last year and 174 two years ago.

The average strategist expects the S&P 500 to rise 17 percent to a record 1,585 by year-end 2013. Earnings are forecast to rise to a record $110.80 a share in 2013, double those in 2008.

The average economist predicts global GDP will increase 2.6 percent in 2013 versus 2.2 percent in 2012, and US growth will fall to 2 percent in 2013 from 2.2 percent in 2012.

Brian Jacobsen at Wells Fargo Advantage Funds said stocks are cheap and predicts the S&P 500 will rise 47 percent to 2,000 in 2014.

Douglas Kass at Seabreeze Partners Mgmt expects the S&P 500 to rise 18 percent to 1,600 in 2013 as the economy expands. Kass said investors are playing the last war and their fears misplaced.

Savita Subramanian at Bank of America says the S&P 500 will rise to 1,600 on rising profits and diminishing global economic concerns. John Stoltzfus at Oppenheimer expects 1,585 and David Kostin at Goldman Sachs expects 1,575 on QE3.

James Bianco at Bianco Research said optimism is misplaced unless we avoid the fiscal cliff. Bianco said we’ve only been pricing in the fiscal cliff for a week and expects much more pain.

James Paulsen at Wells Capital Mgmt said we go from glum to glee over and over again.

Hank Smith at Haverford Trust said valuations are cheap relative to earnings, and corporate balance sheets are exceptionally strong and corporations flush with cash. Smith expects profit growth to re-accelerate in half2 2013.

Michael Shaoul at Marketfield Asset Mgmt said bull markets normally end with a burst of hyper enthusiasm – the transition from tepid enthusiasm to hyper enthusiasm is worth another few hundred points in the S&P.

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