In early August, start-up investor George Zachary gave a presentation to his partners at Charles River Ventures, with data pointing to one conclusion: We're in a bubble.
Only his data had nothing to do with inflated valuations among venture-backed companies, the number of 20-year-old college dropouts raising millions of dollars or sky-high real estate prices in Silicon Valley. It was all about the public markets, specifically the price of U.S. equities.
For example, he showed a ratio favored by investor Warren Buffett, which gives the value of U.S. stocks relative to gross domestic product. Looking at the Wilshire 5000, the broadest measure of U.S. equities, versus economic growth, the market is more expensive than it was at the 2007 peak but still cheaper than the top in 2000. The average price-to-earnings ratio of the market over the past 10 years, meanwhile, has rarely been higher.
Even after the past month's stock market drop, the S&P 500 is up 33 percent in the last two years.
Read MoreSocial media froth?
"We're in an inflating bubble, not a bursting bubble," Zachary said in an interview Tuesday at his office in Menlo Park, California.
One slide he presented in August had a trend line that showed that the stock market was rising at almost the exact rate as the government's purchase of mortgage-backed securities. So, if the Federal Reserve takes away the punch bowl, look out below. Other problematic indicators include record low rates on junk bonds (there's since been a selloff, lifting rates), high margin debt and big time bank consolidation, making the "too big to fail problem worse," he said.