"This market is insanely overpriced. The price-to-sales ratio for the S&P 500 is at 3x. That's 30% above the peak of 2000 which was crazy."Market cap-to-GDP is at record highs, too. Basically, every indicator other than the P/E ratio is at a record high. The only reason the P/E ratio is slightly below the 2000 record is because of all the financial engineering that's done to try to pump up the earnings."As insane as the 2000 bubble was, this is more insane – and it's broader. It's a direct result of the Federal Reserve and the other central banks pumping enormous amounts of money into the system."This market has become terribly narrow which is another big risk. The record highs are driven mostly by five stocks: Apple, Microsoft, Amazon, Google and Facebook. Their combined total valuation is $9 trillion, and people continue to pile into this small group of names. This trend has been accelerated by the movement of passive investing where everybody just piles into the same ETFs."The market cap of the S&P 500 is $36 trillion, and those five companies are now 25% of the index. So when people put money into the ETFs, they essentially buy more of these big tech stocks. It's a self-perpetuating phenomenon until it ends — and when it ends, the market is going to collapse because the valuations don't make sense."Look at Apple: Only a couple of years ago, people were getting excited about Apple hitting $1 trillion. Now its market cap is $2.5 trillion, and the stock trades at 33x peak earnings. That's absolute insanity!"