Don’t count hedge fund guru Ray Dalio’s Bridgewater Associates among the investors who think the stock market is in bubble territory.

“We think asset prices are high and, as a result, the future expected returns of passive investing are likely to be low. But … we do not see current conditions as a bubble,” Bridgewater co-CIO Greg Jensen and Jacob Kline wrote in a private note to clients on May 1 obtained by CNBC.com.

Jensen and Kline offered a number of reasons why they don’t think stocks are in a bubble. Among them: Valuations are still in “normal territory”; Leverage isn’t a major driving force of prices and overall lending is still “modest”; U.S. retail and foreign investors have “modest” positions; and Economic sentiment is “less ebullient” than other bubble periods.

Jensen and Kline do refer to “frothy” bullish sentiment and they say there are “pockets of froth” in high-yield bonds and commercial real estate. But those areas don’t even amount to bubbles, they said. “Assets not being in a bubble doesn’t mean they can’t decline and aren’t vulnerable to surprises, but it does make a cascading pop in asset prices much less likely,” they wrote.