These actions appeared perfectly sound to the decisionmakers at the time of the decision. In this stage, you and I may call it overconfidence. Historians will call it something else. Experience also shows euphoria is rampant before the crash. In 1989, for example, price-earnings ratios of Japanese stocks climbed to ridiculous levels as the Nikkei index soared to 39,000.
Euphoria leads to carelessness.
In America, at present, the ratio of dividends to price is lower than the interest rate on bank deposits. This means a bank deposit is providing a higher return at a sizably lower risk than stocks. Buyers of stocks confidently expect to sell to someone else at an even higher price. If they cannot, they lose. And again history teaches us that this theory makes its grand entrance, time and time again, before a crash.