Billionaire hedge fund manager David Tepper said the S&P 500 is "fairly valued" but that it could rise another 8 to 10 percent from current levels.

"I think we'll have a good year," he said in a phone conversation on Monday, referring to 2015. Fair value, he said is a range, not a specific number and with the S&P having a price-earnings ratio of 16, stocks could rise to the upper band of the range, about 18. Also, central bank easing plays a key role in fueling stocks' rise.

"You have people responding to deflation all over the place. First thing that goes up when people try to fight deflation is asset prices," Tepper said.

When asked how he's positioned in equities now versus in April when he was 70 to 80 percent long, he said "longer." In May, Tepper warned "don't be too frickin long" at SkyBridge Capital's SALT conference in Las Vegas.

Read More Appaloosa's David Tepper: 2015 might be like 1999

"It's not the time to be careful now. Enjoy the ride," Tepper said. But he also warned that investors should be aware of overvaluation. "Don't get too comfortable when the ride starts. The ride hasn't started yet."

Tepper's Appaloosa Management, like other funds, has had a tough year in 2014. He said he had underperformed the S&P but was "up on the year" and "up" for the month of December.

Last week, Tepper, in an email to CNBC's "Squawk Box," compared 2015 to 1999, the year after the Russian financial crisis and easing in Europe. "1999 was a fantastic year," he said, pointing out that the Nasdaq was up 85 percent. "But at some point in '99, you had to wake up" to overvaluation.