Why Robert Shiller is 'dead wrong': Analyst

Forget Jackson Hole, stocks will still rise: Pro

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 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.

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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.

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"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.

Robert Shiller
Petras Malukas | AFP | Getty Images

"We have huge community of unbelievers, and this is the most disrespected rally of my lifetime," said Boroudjian.

"We've watched the stock market go up 1,000 percent in the last ten years, but we have had so many people in the last five years looking at the at 10-year yield and saying this is a warning signal. Well, guess what? That has kept people on the sidelines and it's a shame because they've missed out in the greatest rally of our lifetime," he added.

Other analysts told CNBC they also believe the S&P 500 could see further upside.

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"The S&P 500 can be shown to be trading above most of the stock price measures that you can use – so you can certainly point to it [and say that stocks look expensive]," said Evan Lucas, market strategist at IG.

"But if you look at the S&P 500 over the past few weeks amid all the geopolitical uncertainty it only moved down 3-4 percent. Nothing in the trend suggests it's broken. Yes, there are bearish metrics and they will come to roost soon-ish. But there is no reason to see anything in the macro data that would put the S&P on a downward trajectory yet," said Lucas, adding that he sees the index rising to between 2,000 to 2,100 by year-end.