HORAN Capital Advisors

Disciplined Investing

Here We Go Again: Value To Finally Outperform Growth?

 September 20 2020     David Templeton
So far for most of the month of September, the large cap value stock space has outperformed large cap growth. Since the end of the financial crisis of 2008/2009 I have probably written about the market's turn to favoring value at least a dozen times. If performance is the yardstick, the growth style has ultimately been favored by investors for the last ten or eleven years as seen in the below char...

Mega Cap Stocks Run Into A Headwind

 September 17 2020     David Templeton
The first two days of September saw the S&P 500 Index get off to a nice positive start, up 2.29% on a price only basis. Since then though the market has declined 5.4% on a total return basis. This decline has been led by the large cap technology stocks in the index. The blue line in the below chart represents the average return of six large cap technology companies in the index, Facebook (FB), Ama...

Small Business Optimism, And Importantly Hiring Plans, Remains Favorable

 September 8 2020     David Templeton
The NFIB Small Business Optimism Index for August was reported at 100.2, which is a 1.4 increase over July's reading. The NFIB report notes seven of the 10 index components increased while two declined. The Index remains at a high level, a level which was reached following the recession after the technology bubble. The NFIB report also notes the August reading is slightly above the 47-year average...

The Stock Market And Economy Seem To Be In Sync

 September 6 2020     David Templeton
There are times when I write a blog article and I remind readers the stock market and the economy are not the same. By that, I mean the stock market sometimes moves counter to what one might expect based on economic data releases. Often times this divergence occurs as the stock market is forward looking and its movement anticipates better or worsening economic conditions while much of the economic...

Stock Prices Reflecting A Resumption In Earnings Growth

 August 29 2020     David Templeton
One factor about the equity market is its movements are often influenced by expectations. Economic news that is reported better than those expectations can impact broad equity market prices and earnings that beat expectations are an important variable impacting the price of stocks too. For the broader marker, in this case the S&P 500 Index, earnings expectations for 2021 appear to have bottomed as...

So Far Not A Year For The Dogs Of The Dow

 August 17 2020     David Templeton
This year has not been a good one for the Dogs of the Dow strategy. A number of reasons can be cited, like energy sector weakness and both Chevron (CVX) and Exxon Mobil (XOM) included in the strategy this year or Cisco System (CSCO) and IBM a part of the Dow Dog portfolio and not Apple (AAPL). In a year where the FAANG + Microsoft (MSFT) portfolio is so dominant from a return perspective, it is cl...

A Healing Job Market

 August 15 2020     David Templeton
With over 15 million individuals unemployed based on Thursday's jobs report and an additional 10.7 million individuals receiving Pandemic Unemployment Assistance, labor market improvement can not happen fast enough. However, employment related reports this past week indicate the job market is improving. Initial jobless claims for the week ending August 7 were reported at 963,000, a far cry lower t...

Economic Tailwind Contributing To Favorable Equity Market

 August 14 2020     David Templeton
In a number of my recent blog posts I have written about the "V-shaped" recovery unfolding in both the equity market and the economy. Economic data reported over the last two weeks continues to support this V-shaped narrative. Much of the recent economic releases are positive and the data, when plotted on a chart, trace out a V-shaped pattern as well.Last week the New Orders Index reported by the ...

VIX/VXV Level Warrants Investor Attention

 August 2 2020     David Templeton
July's return for the S&P 500 Index of 5.64% pushed the index into positive territory for the year, returning 2.38% year to date. More impressive is the S&P 500's return since the March 23 low at +46.2%. It is hard not to agree there appears to be an upward bid to the equity market in spite of concerns around the virus induced weakness in some of the economic data, especially in the jobs/employmen...

Market Climbing A Wall Of Worry: Weakening Bullish Investor Sentiment

 July 30 2020     David Templeton
AAII reported bullish investor sentiment fell 5.83 percentage points to 20.23% in the Sentiment Survey release today (7/30/2020.) This is the lowest bullishness reading since bullish sentiment was reported at 17.75% on May 26, 2016. The Sentiment Survey is derived from AAII's requests of its members to report their expectation about the stock market's direction in the upcoming six months.Sentiment...
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