While talk is percolating about a bubble in the stock market, led by the Internet sector, Wall Street Journal columnist Mark Hulbert, editor of Hulbert Financial Digest, is skeptical.

He cites studies by finance professors Jeffrey Wurgler of New York University Business School and Malcolm Baker of Harvard Business School to make his case.

"Wurgler and Baker developed five indicators that were well correlated with periods of speculative excess over the past 50 years. None of them currently is detecting the levels of exuberance that prevailed at the top of the Internet bubble," Hulbert writes.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

One of the indicators is the number of initial public offerings (IPOs). In the three months ended Nov. 14, there were 73 IPOs, compared with 123 in the first three months of 2000, according to University of Florida finance professor Jay Ritter

The second indicator is IPO returns. The average first-day return in the last three months was 25 percent, compared with 96 percent in 2000, according to Ritter.

Third is the dividend premium. Wurgler and Baker's research shows that divided-paying stocks have higher valuations now than non-payers do, the reverse of 2000.

Fourth is the percentage of new corporate cash coming from stock issuance rather than from long-term debt. The equity percentage is now 11 percent, compared with 20 percent in 2000, Hulbert explains.

The final indicator is the turnover rate of shares on the New York Stock Exchange. That rate now averages 60 percent, compared with 89 percent in 2000, according to exchange data.

"The investment implication of all five sentiment indicators: If you were thinking of reducing your stock holdings out of a concern that a bubble was forming, you can instead continue to give the bull market the benefit of the doubt," Hulbert concludes.

To be sure, the torrid rise in social media stocks stems largely from investor hopes, rather than financial performance, experts say.

"Investors are certainty rewarding social media names on potential ad revenues, and ultimately profits, in the years ahead," Andrew Wilkinson, chief economic strategist at Miller Tabak, tells MarketWatch. "All that excitement is helping drive the sector more than fundamentals."

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

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