It's not the crash that invalidates it, it's the extreme variance. At one point, the S&P had two swings of 10% in one day. These kinds of swings were common, and they often happened without any shocking news arriving in between the swings.

Since the mid-1980's, stocks have traded as collectibles, not as cash flows. Thus the price of stocks is not based on fundamentals, but on game theory. The stock market is a coordination game with massive feedback loops in it.