Record Enterprise-Value-to-Sales Ratios Shows Why Stock Market is So Unstable. It was no surprise to us that an unexpected event like the coronavirus scare of China would spark a major stock market decline. That’s because, as we’ve discussed in recent weeks, the stock market has been vastly overvalued. The market is at record levels by a number of different measures. That has made it highly susceptible to major downturns when there’s unexpected bad news. A great example of the market’s record overvaluation comes from Otavia Cresta of Crescat Capital. He shows in the chart and table below that the great majority of industrial sectors in the S&P 500 are trading at record levels using their enterprise-value to sales ratios. Those levels greatly surpass even the lead-up to the 2000 tech bubble. In other words, because the enterprise value-to-sales ratio compares total valuation of a company to sales, the record high ratios show how ridiculously overpriced the market has been.