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Confidence remains low, and that's good for investors

The September reading from this measure of confidence fell, and that spooked the market temporarily this mornign. In my view, this is old news, and it simply validates what I have been saying for a long time: the market is priced to very pessimistic assumptions. Optimism is hard to come by, and consumers especially are still quite concerned about what's going on in Washington and the lack of a meaningful recovery. But when the majority of people are very worried, that gives optimists some attractive odds to bet against the prevailing mood. If there is just a little bit of improvement going forward, this could be good for prices of risky assets. Investors should worry when confidence is high, as it was before every recession in the past.

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