There are supposed to be four times more litecoins (84 million) than bitcoins (21 million) so with everything else being equal, Litecoin should cost 1/4 that of Bitcoin. But Litecoin is currently trading at about 10 dollars each while Bitcoin is trading at around 400-500 dollars each which makes it undervalued by a factor of 10.
Has it got something to do with the distribution curve (ie. more litecoins are produced in the first few years compared to Bitcoin)?
This thread was more valid 6 months ago. It's pointless now, because a) Litecoin brings nothing new compared to Bitcoin; b) some other alts have sprung into being over the past 6 months, that do bring something new to the table compared to Bitcoin.
Meaning, capital will continue to pour more into alts with more perspective and less into Litecoin, which will go as low as 0.01 BTC by the end of 2014. It can stay the same dollar wise though, around $10.
The market has decided , Litecoin is number 2 and once litecoin goes on Coinbase even more money will pour into it and less into other crap coins.