Interview With Louise Yamada

Louise Yamada is the Managing Director of Louise Yamada Technical Research Advisors (LYA) founded October 2005. Previously Louise was Managing Director and Head of Technical Research for Smith Barney (Citigroup), and while there, was a perennial leader in the Institutional Investor poll and the top-ranked market technician in 2001, 2002, 2003 and 2004. At Smith Barney for 25 years, in her years as head of Technical Research, Louise authored a weekly flagship report "Market Interpretations".  Louise Yamada is very often interviewed on CNBC Financial News for her keen market observations.

GOLD-EAGLE had the great pleasure and honor of interviewing market maven Louise Yamada recently. 

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Gold-Eagle:  What is your overall Investment Outlook for 2015?

Louise: We noted some evolving structural trends including continued structural decline in energy (identified in early 2014); Yields still in a basing process (historically 2-14 years) for falling rate cycles reversing to rising rate cycles; Structural Bull Market intact but aging and volatility growing (we turned defensive in Feb only to see new highs) but still some serious divergences suggesting caution (only once in history have we seen more than 5 up years in a row, in the 1990s, there were nine … we are at 6); US dollar breaks out of 9-year base into new structural bull market; Gold remains in a structural bear market (notwithstanding interim rallies).  Overall STAY ALERT.

Gold-Eagle:  What asset classes are grossly over-valued?

Louise:  We don’t follow fundamentals, so I cannot answer this one.  Many stocks are parabolic and due for pullbacks.

Gold-Eagle:  What assets classes are considered today very inexpensive relative to historical standards and current global economic conditions?

Louise:  Similarly we don’t follow the fundamentals, but there are stocks forming bases that might prove interesting.

Gold-Eagle:  In light of the US Fed fueling US stocks via the levitating action of Quantitative Easing (QE),  do you foresee an imminent crash in the S&P500 Index during 2015?  And If so, what percent do you expect US equities to crash?

Louise:  We don’t see a crash, these are hard to predict, but as the structural sell signals fall into place we would become more defensive.

Gold-Eagle:  And if indeed US stocks commence a new secular Bear Market, where might prudent investors seek safe haven?

Louise:  Cash, to be prepared for the next bottom.

Gold-Eagle:  What is your forecast for gold and silver during these troubling and volatile times?

Louise: Both in structural bear markets, we’d stay on the sidelines and consider rallies as temporary.

Gold-Eagle:  As you well know, The Peoples Bank of China and Japan’s Central Bank are the world’s largest holders of US Treasuries. They own $1.3 TRILLION and $1.2 TRILLION, respectively. In your estimation do you feel the Peoples Bank of China and Japan’s Central Bank will soon awaken to the imminent FOREX danger this represents…and will subsequently dump Uncle Sam’s fiat paper to diversity their dire FOREX risks?

And in the event The Peoples Bank of China and Japan’s Central Bank divest themselves of US Treasuries, might that cause a crash in the US Bond market…and a related crash in the value of the US greenback?  

Louise:   We have no opinion on this.

Gold-Eagle:  With regard to building cash in your own investment portfolio, are you in the same conservative boat as billionaire Warren Buffett who has amassed a cash position of over $70 BILLION (in anticipation of a stock market meltdown)?

Louise:  I’m always conservative.

Gold-Eagle:   What is your opinion of the ramifications of Swiss National Bank’s unexpected decision to abandon the currency’s cap versus the euro…which drove one of the biggest shakeups in foreign-exchange history?  Will the SNB decision cause the Euro currency to crash…i.e. thus paving the way for the eventual collapse of the Euro Union?

Louise:  I don’t see the Swiss move as anything other than protecting their own currency.

Gold-Eagle:   To date the only member of the Euro Union that has been living high on the hog so to speak (i.e. referring to the PIIGS) has been Germany.  What might Germany do to salvage what it can?

Louise:  Germany has been one of the strongest European countries and their market has been doing very well.

Gold-Eagle thanks to renowned market maven Louise Yamada for taking the time to share her insightful and timely views with our global readership.