It a bit complicated to explain as everybody falls in the trap time and again.
It is, as the name suggest a ' Greater fools theory'. You buy something without investigating the realistic cost of an article with a hope that you will be able to sell it to a bigger fool later on. It depends on the ability of a party to find a buyer; as blind and fool- unrealistically optimistic.
A certain section of stock market raises the values to make more money and in the glistening mirage of high returns every body invests in.
This is not good for the health of economy if we always look for high flying returns and don't care for the actual worth. A very good example is the real estate boom, Mortgages in USA. Be better informed- Warren buffet is a realistic / value investor and he is the world's most successful investor.
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