Why stocks maybe are not cheap

from Clusterstock an interesting blog run by the once infamous Henry Blodgett.

Jeremy Siegel's Mistake: Why Stocks Are NOT "Dirt Cheap"

Henry Blodget | Nov 7, 08 10:48 AM

Yesterday, we noted that Wharton professor Jeremy Siegel's "fair value" estimate for the S&P 500 is a startling 1380, which is about 40% higher than most other estimates (Robert Shiller, Jeremy Grantham, Andrew Smithers, John Hussman, et al). Prof Siegel, who is now a pitch man for WisdomTree funds, uses this estimate to conclude that stocks are "dirt cheap."

The other experts, meanwhile, who use a consistent, historically predictive, and fully explained methology, estimate that fair value is around 900-1000, about where we are now. In their view, stocks are just fairly valued.

So who's right?

It comes down to apples to oranges but I much prefer the oranges to Professor Siegel's apples because he uses forward earnings estimates and they are notoriously unreliable.