Dow loses 1,300 points erasing nearly all advances under the Trump presidency

And in a panic stocks can dip far below what would normally be a fair value before beginning to recover.

What does overvalued even means? You cannot compare historic prices in isolation. Value is relative, so while yes ratios are higher and have been higher the past few years, stocks were still undervalued compares to bonds, real estate, commodities etc. It's useless to compare 1980s stock prices when interest rates were at 13% to now. That's why you usually see the "stocks are a bubble, too expensive" from retail investors that just cannot understand relative value and fixate on the "good old times". It's simple, getting 13% returns on bonds meant that stocks would always underperform in terms of yield so they had a lower relative value. This is why no one professional investor is waiting for a return to those level. Because they would be impossible and non sensical.