Apple trades at just 11.3 times forward earnings. Microsoft, 9.9 times earnings. Johnson & Johnson, about 12 times earnings. Hewlett-Packard, a depressing 6.3 times earnings.

The S&P 500 index trades at about 12 times earnings -- a below-average reading historically.

Stocks look cheap.

But are they? Some say earnings are unsustainably high, due for a drop that could make what look like good buys today bargain traps tomorrow. For example, Yale economist Robert Shiller measures stock valuations by taking the average of 10 years' earnings adjusted for inflation -- a process called the cyclically adjusted P/E ratio, or CAPE. It shows that stocks may in fact be overvalued at current prices.

Wharton professor Jeremy Siegel doesn't buy it. He thinks broad indexes like the Dow Jones Industrial Average (INDEX: ^DJI) and the S&P 500 (INDEX: ^GSPC) are as much as 25% undervalued and says fears that earnings are unsustainably high are overblown. Check out why in this video from our conversation in December:

What do you think? Share your thoughts in the comment section below.

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