Investing with Confidence

"Don't Sell a Confidence Revival"!

Normally, the foundation of U.S. economic expansions and bull markets is “Confidence”! Individuals betting on their own ingenuity see a plethora of opportunities with anticipation, excitement, and optimism! Entrepreneurs with the help of participatory investors take the risks to build enterprises and individuals choose how to build lives. America is a product of risk taking, toil, sweat, successes, failures, and resurgences – all driven by an eternal confident and optimistic look to the future.

But oddly, this is not how the most recent American episode has worked out. As demonstrated in chart 1, U.S. confidence was destroyed during the 2020 Covid Crisis, and despite a renewed economic expansion commencing in April 2020 and a new bull market since October 2022, after a brief and only modest confidence revival during 2022-23, U.S. optimism has again wilted during the last couple years. Indeed, the contemporary economic expansion and bull market have been uniquely characterized by chronic pessimism. It seems an oxymoron to call a period of intense and widespread U.S. pessimism an “expansion” or “bullish”!