A two minute excerpt from a 1979 Phil Donahue show where Milton Friedman talks about capitalism and socialism.  Read more...

Although the equity market liked the employment report this morning, the labor market is far from where it needs to be to absorb the jobs lost since the last recession. The 243,000 jobs that were added was the highest in the last nine months; however, the number of employed is far below the level prior to the recession--5.6 million below.From The Blog of HORAN Capital AdvisorsCertainly the addition of 200,000+ new jobs is a positive, but this recovery remains one of the weaker recoveries in term...  Read more...

In a recent research report by Thomson Reuters they note that a company's stock buyback activity generally does not add value subsequent to the buyback. A reason cited is the fact companies generally have more cash on hand in good economic environments and this tends to be after the stock price has already reflected a more positive operating environment. Even for the market (S&P 500 Index) overall, the increased buyback activity occurs at ever increasing price levels.From The Blog of HORAN Capit...  Read more...

Fortunately for investors, the calendar has turned to a new year and 2012 has gotten off to a strong start in January. As our 4th Quarter Investor Letter notes, 2011 was a flat but volatile year for the market (S&P 500 Index); however, as of 12/31/2011, the 3-year annualized return for the S&P is 14%. Not bad for a 3-year time period. The disparity in valuations between stocks and bonds is near record levels as we discuss in our Investor Letter.The Letter can be accessed directly from our websit...  Read more...

Approximately two years ago Carmen M. Reinhart and Kenneth S. Rogoff completed a comprehensive study, “Growth in a Time of Debt”, which looked at public debt levels around the globe and the resultant impact on economic growth for the respective economies. The study noted the historical consequences of various debt levels relative to an economy's GDP growth with the impact of increasing public debt levels on a country's economy being different for emerging and developed economies. The study autho...  Read more...

From time to time questions arise about using leveraged ETFs in one's portfolio strategy. We caution longer term oriented investors to not use these type of ETF investments. For example, if an investor believes the market will rise in the near term, why not consider a two or three times ultra bull ETF. In this case an investor would expect the ETF to generated two or three times the return of the underlying index. Well, for an investor, it is not that simply due to how the math calculation works...  Read more...

The recent WealthTrack interview conducted by Consuelo Mack features Ed Hyman, Chairman and Founder of ISI Group, and Bob Doll of BlackRock. Ed Hyman has been rated the #1 economist by Institutional Investor for 32 years running. Both strategist see the U.S. as the best house in a bad neighborhood for investors. Hyman notes the US economic data has been better, but not great, every week for the past three months. For more on their insights for 2012, readers can view the below video.  Read more...

The equity risk premium recently reached levels last seen at the height of the financial crisis in 2008. The high risk premium level suggests equities are attractive at this point in the market cycle. One key is whether corporate earnings can continue to make new record highs in 2012. Earnings growth is expected albeit at a slower rate than achieved in 2011. Given the level of stock buybacks and more importantly, company dividend increases, it seems equities could do well looking forward. The bu...  Read more...

The Dogs of the Dow in 2011 significantly outperformed the Dow Jones Industrial Average Index (DJIA) and the S&P 500 Index on a price only basis in 2011. The Dow Dogs returned 12.2% versus the DJIA return of 5.5%. The S&P 500 Index was essentially flat on the year.The Dow Dog strategy consists of selecting the ten stocks that have the highest dividend yield from the stocks in the Dow Jones Industrial Index (DJIA) after the close of business on the last trading day of the year. Once the ten sto...  Read more...

During moderate periods of inflation, equities tend to generate decent performance results. I posted the below chart in a post, Where To Invest In An Inflationary Environment, in mid 2010 that details the performance of various investment categories based on different inflation ranges going back to 1972.From The Blog of HORAN Capital AdvisorsSince mid year 2010 inflation has been trending higher with the latest year over year report showing inflation running at nearly 3.5%.From The Blog of HORAN...  Read more...