Those who don't learn from history are doomed to repeat it, or so the saying goes. Wise words and sage advice for investors. When the market seems to be making new all-time highs weekly, and there is tremendous enthusiasm on Wall Street and in the world of amateur investors, it can feel as if stocks will go up forever and valuations are irrelevant. But this is when investors should be cautious.

The most recent example is the 2021 tech bubble. The economy was flush with economic stimulus, interest rates were near zero, and stocks traded for ridiculous valuations. For example, edge-computing company Cloudflare's (NYSE: NET) stock valuation reached an astounding 114 times sales, as shown below.

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Source Fool.com