The stock market continues to make record highs even though profits do not warrant current valuations. Looking at four standard valuation models we find that the stock market is highly overvalued relative to earnings. For most Americans with little stock ownership, this is merely a sideshow as to what is unfolding in the real economy. Based on an average of four popular valuation models we find that the S&P 500 is overvalued by 68 percent. Typically you want to see earnings justify current valuations but something else is going on here. Either stocks are being priced at very optimistic future levels or hot money from the Fed is flowing into the stock market to avoid the slow erosion brought on by inflation. It is interesting to see some people falling for the myth that inflation is muted when housing values are up, college costs are soaring, energy costs are high, and healthcare costs continue to go up. Of course the CPI measure tends to understate inflation so it might be the case that market participants are diving into the game even with high valuations because they realize underlying inflation is much higher than what indicators are noting. One thing is certain and that is the current stock market is highly overvalued.