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Lots of market observers have been maintaining for months that the rising stock market is not dangerously overvalued.
 
After all, earnings growth for the first quarter is expected to be stronger than it’s been since 2011 and investor sentiment isn’t as frothy as it was in the late 1990s.
Still, signs of a toppy market are everywhere.
 
On Tuesday, for example, Tesla (ticker: TSLA), the electric-car and solar panel company that last year sold a mere 76,000 electric cars and registered a net loss of $675 million, surpassed(F) in market cap. Ford, by the way, sold 6.6 million cars last year, generating a net profit of $4.6 billion.
 
Whlie stock market valuations are largely based on estimated future cash flows, not past results, Tesla would have to have an awfully mistake-free and stellar future and Ford would have to fall into the toilet to justify this passing of the torch at this point in Tesla’s young life.
 
Anyone who viewed this Tesla-Ford news as a sign of irrational exuberance is to be forgiven.
In a piece for thestreet.com, writer Brian Sozzi, a former money manager, decided to do a Google search of the words “stock market overvalued” to get a feel for where the pockets of overvaluation may lie based on popular opinion and press accounts.
 
Not surprisingly, his search unearthed many stories about Tesla surpassing Ford in market cap.
 
“Now, the money-losing entity that has been known to break promises to investors (mostly on hitting production figures) is closing in on General Motors as the most valuable automaker,” writes Sozzi, a former money manager. “If this doesn’t scream as reckless investing synonymous with market tops, then I might as well retire.”
 
The Google search also unearthed stories about the relentless climb of shares of Amazon                      (AMZN).
 
“At least this is somewhat justified, given how Amazon is killing bricks and mortar retailers such as Macy’s (M) and Sears (SHLD). But, also as a result of indications Amazon has tapped into a new pocket of technological innovation, its delayed high-tech grocery store will be a game-changer if it’s ever opened.”
 
Still, Sozzi rightfully points out that Amazon’s stock ascent – the company now has a market cap of $430 billion on a 2016 net profit of $2.37 billion -- “seems too much, given the company’s propensity to put investment ahead of profits and the market potentially approaching correction zone.”
 
Sozzi also points out that corporate insiders, the so-called smart money, are tripping over themselves to dump stock. “The ratio of buyers to sellers is now at a 29-year low,” he adds.
 
While Sozzi’s short piece doesn’t address valuation, that’s also part of the picture. In a recent column for the New York Times Robert Shiller, the Yale economics professor who in the year 2000 wrote a book about the dot-com bubble entitled, “Irrational Exuberance,” writes that the current market is overvalued based on the cyclically-adjusted price to earnings (CAPE) ratio he developed years ago.
 
The CAPE, he writes, are now close to the same level that it was at in 1929 but still far off from the level attained in the year 2000, when tech stocks crashed.