That saying assumes a rational market, and while there is some evidence that the average human behavior trends towards the rational there are plenty of evidence against individual behavior being rational (see homo economicus).
As more and more wealth get distrubuted to fewer and fewer hands, and as fewer and fewer extremely rich individuals control more and more of the market, My gut feeling is that if the market was ever rational (which btw. I am not entirely convinced of) that very much no longer holds true.
In the short term it’s a voting machine, in the long term it’s a weighing machine (Ben Graham).
The current episode of irrational exuberance will pass, as others have.
The before ones have had outside influence which forces the irrational episodes to pass. A spectacular collapse is usually fallowed by mass protests and labor actions, strikes etc. which forces the market to change its behavior. Most of the time these will result in a change in government policy which imposes regulation onto the market, and only then does the market go back to being rational.