The S&P 500 and Dow Jones industrial average now stand within 1 percent of their record highs. But they shouldn't, says James Montier, a portfolio manager at money-management firm GMO.

"There is no doubt that the U.S. stock market is exceedingly overvalued," he told Money magazine.

Robert Shiller's price-earnings (P-E) ratio, which is based on 10 years of earnings, proves that assertion, Montier said. Shiller's ratio stands at 25.5, far above its average of 16.5 since 1881.

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So are stocks in bubble territory?

Not like in 1999, he says. That was "a good old-fashioned mania," he said. "People really did believe this time was different — that the dotcoms would change the way the world worked forever. I think what we are seeing today is more of a near-rational bubble."

What he means is that global central bank easing is pushing investors to buy stocks.

"I'd call it a foie gras market, in which investors are the geese being force-fed risk assets by central banks," Montier said. "It isn't pleasant, but it may be the best that you can do given the alternatives that are available to you."

Some investors are skeptical that stocks can keep climbing.

"You need to see good, sustained earnings growth at this point for stocks to continue to rise," Jim Lauder, a portfolio manager for Wells Fargo Funds, told The Wall Street Journal. "I don't think you're seeing overwhelming evidence of that at this point."

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