This is How Financial Chaos Begins

[davidn3600]

3. Market has been overvalued for awhile

So many stocks are overvalued right now. I look at some of these stock prices right now for different firms, and I just feel the instinct in my gut that there is no way they are worth this much.

In order to make money in the stock market, the market needs to keep going up. When the market prices go up faster than the true growth, you end up with an overvalued market. Technically, on paper, this isn't supposed to happen. A stock price is ultimately based on the market capitalization. But as we all know, prices are far more complex than that. There are many speculative forces playing with supply and demand. So overvaluation and undervaluation is a reality of economics.

It doesn't mean a correction will happen next week or even next year. But eventually gravity will win out.