Yale professor Robert Shiller's recent warning on the valuation of U.S. stocks, bonds and housing sent ripples through global markets, but one analyst told CNBC the professor is "dead wrong."
Shiller's comments come as Wall Street's major indices continue to power higher. On Tuesday, the Nasdaq Composite touched a fresh 14-year high, boosted by reports offering a benign view on inflation and a better-than-expected view on the housing market. Meanwhile, the S&P 500 traded within seven points of its recently-set all-time high.
But Shiller highlighted worrying signs from the cyclically adjusted price-earnings ratio (CAPE) ratio – a stock price measure he helped create, which measures the S&P 500's average inflation-adjusted earnings over the previous 10 years.
The professor and economist told CNBC's "Halftime Report" on Tuesday that the ratio stands at 25, a level that has been surpassed only three times since 1881 – the years surrounding 1929, 1999 and 2008. The ratio averaged 15.21 in the 20th century and stood at 23 last year.
But according to Jack Boroudjian, chief investment officer at Index Financial Partners, Schiller's warning is unwarranted and stocks have much further to run.
"He is dead wrong. This market is not too expensive," Bouroudjian told CNBC Asia's "Rundown" on Wednesday, noting that the most common price-to-earnings measure for the S&P 500 is around its historical norm.
"Shiller uses a strange equation. I think there is a significant flaw in using average 10 year average earnings as the denominator in the P/E ratio... Most of us in the real world calculate the fair value of the market by looking at the forward earnings and then the multiple. Today, forward earnings are running around $120 for the S&P 500 for 2014, so the multiple is roughly 16.2," he said.
"There is no speculation in this market; if we saw speculation we would see a P/E [ratio] of around 20… now it is basically at the norm and this is one of the reasons why in this low-interest environment there is so much upside potential," he added.
Shiller is not alone, however. A growing chorus of naysayers warned of a potential correction in the S&P 500, which is up 197 percent since March 2009. But Boroudjian believes the index will see further upside.