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Why the Recent High in The Consumer Confidence Index is Scary

The Consumer Confidence Index hit another new high this month, the highest in 19 years. While one would think this is a positive, it’s actually as scary as it gets. Why?   That’s because consumers typically react to what’s in the rear-view mirror. They tend to be oblivious to what lies ahead. And this herd mentality usually gets it wrong.

To put this in historical perspective, consumers are the most bullish they’ve been about the economy in two decades, since the top of the stock market internet bubble in 2000. One year later the U.S. was in a recession and the stock market was in a serious decline.  Be wary when everyone is singing the same tune.

Why the Recent High in The Consumer Confidence Index is Scary
Why the Recent High in The Consumer Confidence Index is Scary

Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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