Jesse Felder is growing a “correction beard.”
The former Bear Stearns banker and current stock market blogger at thefelderreport.com, said back in late September that he would not cut his beard until we got a 10% correction in the stock market.
In October, the S&P 500 fell 9.8%, but never entered an official correction — which is a decline of 10% from recent highs — and so the beard continued.
Now, almost six months later, here is what Felder’s beard looks like.
In an email to Business Insider, Felder wrote that he thought he would be let off the hook in October, but added that now nothing really surprises him in the market.
“[T]hese days though it’s absolutely fascinating to watch the psychology,” Felder wrote.
“The trend is still up and that’s all that matters right now. Longer term the market is more weighting machine than voting machine, though, to paraphrase Ben Graham, so I’m very cautious, bearish in fact, over the next 5 to 10 years. But what happens this month or this year is anyone’s guess. The beard is actually a nice reminder of this fact.”
Over the longer term, Felder thinks the returns investors might be looking for in the next decade have largely been captured by the furious rally seen since the post financial crisis lows.
We also asked Felder about the “call” that Fed Chair Janet Yellen made on social media and biotech stocks back in July 2014 when she remarked that valuations in those sectors appeared “stretched,” and Felder said the comment reminds him of then-Fed Chair Alan Greenspan’s famous “irrational exuberance” speech from 1996.
“Ultimately, [Greenspan] was right as stocks retraced all of the gains they made after his ‘call,’ but he was also very early. I think Yellen’s ‘call’ may play out the same way.”
As for the future of his beard? Felder says that it looks like he and StockTwits founder Howard Lindzon are putting together a charitable fund for it.