We managed to get up, get ready and move some stuff at our garage sale which lasted from about 8 until 11am. I think we did $300 which is nothing to sneeze at. We then donated some stuff to the church via out neighbor next door who is a pastor and also to Lori’s friend Andrea. I was hoping for a bit more as we really need a new couch but we’ll take the $300 and be thankful.

Lori took 4 boys on their new favorite walk or nature hike down along the river. I’m always nervous as there’s lots of homeless people that call the woods down there home but she had Andrea also meet her so there were 7 of them in all when you throw in Andrea’s daughter. I have a ganglion cyst on my foot which comes and goes from too much weightlifting. It seems whenI’m standing lifting a few hundred pounds, it puts pressure on a specific part of my left foot that then fills up a little with fluid. It either goes down on its own or I run up to Panorama Orthopedics and have them drain it. They just stick a thick needle in it and then squeeze it out. It sounds a lot worse than it is as it doesn’t bother me at all.

Today the boys want to go to Cabela’s so we’ll head out early like 8:30. Lori did too much yesterday as usual so I might have to tie her to the couch today. I think we’ll then go to the park or take a drive to the mountains, something relaxing. Lori planted a few things yesterday and I’m sure will be all over the same today but we’ll see.

No politics today as it’s Sunday but you have to see these two articles below. Hope all’s well, God Bless.

What Goldman Is Telling Its Clients: Sell In May And Don’t Come Back For One Year

Submitted by Tyler Durden on 05/16/2015 18:27 -0400

While Goldman gives the following explicit warning in all of its public research pieces: “Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research”, the reality is that in recent months Goldman’s chief equity strategist David Kostin has been getting increasingly “toppish” if not outright bearish on stocks. In his latest report he now openly warns that “the market will rise to 2150 by mid-year but fade after the Fed raises interest rates in September for the first time in nine years.” As a result Goldman’s “year-end forecast is 2100 and its 12-month target equals 2125.”

Which is where the S&P 500 closed on Friday. In other words, sell in May and don’t come back until next May.

Here is what else Goldman is telling its buyside clients:

During the last 50 years, dividends accounted for nearly 80% of the total return generated by US equities. The proportion fell to 45% during the past 25 years and 35% for the past decade. However, since the 2009 financial crisis lows, price return has accounted for more than 80% of the total return of the S&P 500 as the P/E multiple soared from 10.1x to 17.3x. Looking ahead, the market implies 46% of the total return for stocks during the next decade will be generated by dividends, in-line with the past quarter-century.

 

 

The median S&P 500 stock trades at a P/E of 18.2x, the 99th percentile of historical valuation, and has limited scope for further upward expansion. Investors are looking to enhance performance by buying stocks returning cash to shareholders. We forecast S&P 500 firms will return $1 trillion to investors during 2015 via dividends and buybacks. Cash dividends will total $400 billion, a 7% increase from 2014, while buybacks will climb by 18% to $600 billion. The median S&P 500 stock trades with a 1.9% annualized dividend yield, slightly below the ten-year US Treasury note yield of 2.2%.

 

In addition to high dividend yields, investors are also looking to boost returns by finding stocks growing dividends at a rapid pace. The median S&P 500 stock is expected to grow its dividend by 8% annually during the next two years. However, with record levels of cash on corporate balance sheets, many firms are increasing dividends at a much faster clip.

 

The dividend swap market foreshadowed by more than six months the underperformance of shares in our dividend growth basket. The rebound in the dividend swap market at the start of 2015 presaged by two months the recent rally in our dividend growth basket.

 

At the sector level, Telecom and Utilities offer the highest dividend yields at 4.8% and 3.7%, respectively. Information Technology and Financials account for the largest proportion of gross S&P 500 dividends paid, each at 15% of the index total. The fastest dividend growth is found in Financials, Health Care, and Consumer Discretionary, each with a 13% pace.

 

 

The historical relationship between the cyclically-adjusted P/E multiple (currently 23.4x) and forward equity returns suggest the prospective 10-year annualized total return for the S&P 500 will be 5%. Dividend levels implied by the swap market suggest that 46% of the total return during the next ten years will be derived from dividends, and 54% from price gain.

Which means annualized capital appreciation (i.e., price increases) over the next decade will be just about 2.5%. And that is assuming record central bank intervention. One wonders: what happens if and when the central planners finally pull the plug?

 

AND NOW, FROM THE TRULY UNBELIEVABLE……

Jefferson Parrish, LA — In a Jefferson Parrish School District in Louisiana, an eighth grader was handcuffed and dragged out of the classroom…for throwing skittles. He was then held for six days.

For throwing skittles.

The boy had allegedly thrown the candy on a school bus the previous day. A report from Vocativ states:

“The following day, as the boy was taking a social studies test, a police officer assigned to the school handcuffed him, dragged him out of class and arrested him. He was charged with “interference with an educational facility” and battery.

As the officer led the handcuffed teenager out of the school, both students and faculty heard him threaten to “beat the f*** out of [the boy],” or to have his son, who is about the same age, do it for him. The student, who is African-American, spent six days in a juvenile detention facility before seeing a judge, whose first comment was: “Am I to get this right? Are we really here about Skittles?”

The mother has pulled the young boy from the school.

This is no isolated incident. According to the Southern Poverty Law Center, the Jefferson Parish School District has had over 1600 kids arrested for things like carrying a cell phone, swearing, or not adhering to dress code. Arrested.

In what universe is this acceptable?

They also found that black students make up 80% of those arrested, despite that fact that black students make up only 40% of the school district. The SPLC has reportedly called on the Department of Justice “to intervene with the school’s unwarranted arrests of overwhelmingly minority students.”

According to SPLC attorney Eden Heilman,

“The Jefferson Parish Public School System has continued its destructive practice of arresting and jailing children for minor, and often trivial, violations of school rules and decorum. It’s nothing less than a racially biased system of criminalizing African-American children.”

The school district stated publicly that it was aware of the situation and will be working to fix it.