An expert on stock valuation who warned about the late-1990s Internet bubble says that stocks aren’t near bubble territory today. 

Stocks are only “slightly expensive relative to their long-term average,” John Campbell, who is the chairman of Harvard’s Economics Department — and who was with Robert Shiller the co-author of a late-1996 paper that warned Federal Reserve officials of a stock market bubble — tells MarketWatch’s Mark Hulbert. Back when they presented their paper to Fed Chairman Alan Greenspan and other Fed officials in the 90s, Campbell and Shiller warned that the cyclically adjusted price/earnings ratio (CAPE ) was nearly 28, among the highest readings in history, Hulbert notes. Now, the CAPE (which uses inflation-adjusted average earnings for the past decade) is high — 21.9 — but still well below where it stood when the Internet bubble ballooned.

And Campbell says there are other factors that are making today’s 21.9 figure better than it may seem. “Campbell added [that] stocks may be justified in being priced at slightly above-average valuations,” Hulbert writes. “That’s because, he said, there appears to be no good alternatives. The bond market, for example, which is the only other asset class that could readily absorb even a portion of the trillions invested in the stock market, is particularly unattractive for long-term investments right now.”

Hulbert also ntoes that the CAPE looks a lot better when compared to more recent averages. “The CAPE has been higher in recent decades than it was in the latter part of the 19th and early part of the 20th centuries,” he says. “And when compared to its average level in these most recent decades, the current CAPE level doesn’t appear to be so out of line. In fact, it is only 12% higher than the average level of the last 50 years, and it is right in line with its average level of the last 30 years.”