But that confidence is normally not so overreactive to news. We are in the longest business expansion ever, with generally good news for years about inflation and unemployment rates, and about company earnings. A successful stock market sounds like good news. What's troubling, though, is that the gap between stock prices and their actual worth by any standard measure has never been greater. As a nation, we are impressed with each other's upbeat moods.
Investors seem to have confidence in being confident.
Confidence is what took the Dow Jones industrial average from 5,000 to 10,000. Confidence could take it to 15,000. And somebody besides Alan Greenspan ought to be worried about this, because there are consequences looming ahead. Overconfident individuals, companies and foundations are heavily invested in the market. Some retirees have sunk all of their savings into stocks.