HORAN Capital Advisors

Entries for 2015

Better Investing Members' Most Active Stocks As Of August 13, 2015

 August 13 2015     David Templeton
It has been several months since I last provided readers with an update on the most active stocks from Better Investing members. At the top of the list is Apple (AAPL) which has been a favorite of Better Investing members for a number of months running. New to the list since I list provided an update is Ambarella Inc. (AMBA), Southwest Airlines (LUV) and Starbucks (SBUX).From The Blog of HORAN Cap...

Negative Investor Sentiment Abounds

 August 6 2015     David Templeton
The S&P 500 Index is down 2.2% from its late May high, up 1.2% year to date, and yet, up 9.1% over the last year and investors are becoming more concerned about an imminent correction in the stock market. The concern is certainly understandable given the fact the market is nearing four years since the last 10+% correction. This concern has translated into and equity put/call ratio that continues t...

The Risk In Chasing Performance

 August 4 2015     David Templeton
One of the blogs I read on a regular basis is Ben Carlson's A Wealth of Common Sense. Ben's articles are written with a style that employs one of Albert Einstein's quotes, "If you can’t explain it to a six year old, you don’t understand it yourself." His latest article, Avoiding Process Drift, focuses on the vagaries of performance amongst the different investment styles, i.e., large growth, large...

Pursuing Low Quality Equities Has Been A Winning Strategy

 August 2 2015     David Templeton
For most of the market advance since the end of the financial crisis, low quality stocks have been the driver of equity returns. One factor that historically leads to outperformance for high quality stocks is increased market volatility. This higher volatility has certainly been absent for nearly four years and is evidenced by the lack of a 10% market correction since October 2011 and a low VIX le...

Steep Drop In Bullish Investor Sentiment

 July 30 2015     David Templeton
Today's Sentiment Survey report by the American Association of Individual Investors shows bullish individual investor sentiment fell a steep 11.44 percentage points to a low 21.1%. The bull/bear spread is now -19.6%. The last time the bull/bear spread was at this level was the early part of 2013. For investors, this contrarian indicator suggests the market could be setting itself up for a move hig...

Equity Risk Premium In A Rising Interest Rate Environment

 July 27 2015     David Templeton
I have noted in several earlier posts over the years the importance investment professionals place on the equity risk premium (ERP). Although the ERP is one important factor to evaluate, there is quite a bit of disagreement on on how to appropriately calculate the premium. In short though, the ERP is the additional return above the risk free asset an investor requires to invest in stocks. For exa...

Weakening Sentiment Negatively Impacting Consumer Spending

 July 25 2015     David Templeton
The IBD/TIPP Economic Optimism Index reported this month continues to indicate weak individual optimism. For July the IBD/TIPP Economic Optimism Index was below the neutral 50% level for the third consecutive month.From The Blog of HORAN Capital AdvisorsIn addition to weakness seen in the TIPP Index, IBD notes, "the Six-Month Outlook Index fell for a third straight month, sinking 0.8 point to 44....

Market Correcting Over Time By Trading Sideways Versus Steep Price Drop

 July 24 2015     David Templeton
Since February the S&P 500 Index has essentially traded sideways within a 4.8% trading range. This sideways market movement may be resulting in a trading pattern where the market is correcting over time versus correcting with a steep price drop. A sideways market correction enables earnings to catch up to the market's price. As the below chart shows, several of the technical indicators suggest the...

Neutral Sentiment Investors Are More Bearish Than Bullish this Week

 July 23 2015     David Templeton
An interesting facet of the American Associations of Individual Investors Sentiment Survey has been the recent long streak of an above 40% reading for the neutral sentiment category. This week represents a record 16th straight week with the neutral reading above 40%. Although the neutral reading remains high, this week it did fall from last week's 45.95% to 41.87%. More of these neutral investors ...

Investor Letter Summer 2015: Countries/Territories Unable To Pay Their Debts

 July 22 2015     David Templeton
In our recently published Summer 2015 Investor Letter we highlight issues impacting the market in the first half of the year. In the second quarter the world was not short of market influencing events as Greece, China and Puerto Rico all dominated the headlines.  The second quarter proved to be another challenging quarter partially due to these events and volatility erased much of the year’s gains...
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