Dear Mr. Berko: 

I’m told there is a very private banking club of exactly 60 imperial Swiss financiers, none of whose members took any losses in the recent world economic downturn; they knew well ahead of time that the Dow Jones industrial average was going to crash. Two businessmen I’ve met have big deposits at one of their Swiss banks and tripled their money when the Dow collapsed between 2008 and 2010, and in the past three years they doubled their money again using the proprietary Kempieter/Schmissling-Schleuse market theory, which uses two quantum computers that make the Federal Reserve’s look like a Model T. They say this imperial club of 60 Swiss bankers believes that the market will rise strongly in the next two years. What can you tell me about this organization? Does it publish its projections? If not, how can a common working man like me get access to its projections? I have been in the oil and cattle business for over 48 years and can write a pretty big check. And I have a big wad of cash I’d surely like to invest with the numbers I’m hearing. I want you to tell me what the market will do by 2016. My secretary is typing this email for me and sending it to you for your answer. So I would appreciate your response to her at M.L. in Tulsa, Okla. This gal has been with me for 34 years.

M.L., Tulsa, Okla. 



Dear M.L.: 

I received a similar letter in February asking about the Kempieter/Schmissling-Schleuse market theory. I’m impressed, not because it’s a great theory but because I think those two businessmen are “funning” with your boss. In fact, I suspect they’re scamming him. But I made a phone call to a quasi-crook I know at Goldman Sachs and a high-placed gofer at the Swiss Embassy in Washington. Neither believes that Kempieter/Schmissling-Schleuse exists or that there’s an exclusive banking club for an “Imperial Swiss 60.” They can’t find an “Imperial Swiss 60,” nor do they believe that even one quantum computer exists anywhere in the world. Frankly, just a single quantum computer (if one exists) would have more computing power than all computers in the world combined.

So I can’t tell you with any degree of certainty whether K/S-S is or is not providing accurate financial forecasts for gnomes of the Alps, though I hear these stories several times a year. But I can tell you that starchy old Swiss banks such as Wegelin, Coutts, Maerki Baumann, Bank Sparhafen Zurich, Julius Baer Group, Vontobel, etc., have enjoyed extraordinary stock market successes, though their good manners preclude them from bragging about their successes. The proprietary consensus of two private Swiss banks (Kempieter/Schmissling-Schleuse notwithstanding) suggests a 91.66 percent degree of probability that the Dow Jones industrial average will set a record high of 17,200 in 2014. Then they suggest a record high again of 18,700 in 2015, breaking through the 20,000 barrier in 2016 and reaching 20,700. (There’s a margin of error of plus or minus 4.53 percent.) But that’s not an earth-shattering or exciting prediction, because most of Wall Street’s cocaine-sniffing and hash-eating professionals have their bloodshot eyes on that number. And because 2015 is a pre-election year and 2016 is an election year, even I believe that those could be realistic numbers. Be mindful that the party in power will always do everything in its power to ensure that it remains in power, and that includes juicing the market.

However, I suggest that you step aside and recognize the mathematical brilliance of Theodore (Ted) Kaczynski, Ph.D., a 1962 Harvard graduate. Some observers suggest that Kaczynski’s brilliant six-dimensional parallel algorithm construct in a relativistic quantum field predicts that the Dow can reach 20,700 in 2016, with a 4.13 percent margin of error. That 4.13 percent margin of error is eerily close to the private Swiss banks’ 4.53 percent margin of error and sends a couple of shivers dancing on my spine. Note that neither the Swiss nor the Kaczynski numbers include dividends, which can add about 2.5 percent to the total return number.