Cyprus, Cheat funds and the Cost of Ignorance

“Where is Cyprus?” asked my friend Swami as we were having our weekend coffee meeting. We had met after a long time, as my broker friend Jigneshbhai had been out of town.

Jigneshbhai knew what was coming next from the ever-questioning Swami, but like all his terse, double-edged and somewhat unclear answers, he said “Somewhere in Europe I think”.

Swami shooted next from his unending question bag, “So why is Cyprus causing gold to fall?”

Jigneshbhai gave him an amused look and replied, “Apparently they need to sell gold for their bailout. But it may be rumours perhaps”.

Always perplexed by my broker’s not so clear answers, Swami complained, “I invested in gold for the past 3 years and now I am in loss even in that. All because of this unknown country somewhere in Europe apparently”. One could see that he was a bit perplexed, and when in that mood, he usually turned to my broker friend for answers.

But this time, like many times in the past, Jigneshbhai wasn’t relenting. He maintained his silence. And I had nothing to offer to Swami. So Swami’s frustrated outburst was followed by a few awkward seconds of silence.

Unperturbed by that, Swami continued, “Markets are going nowhere, property is unaffordable, bank deposit interest rates are going down, and now even Gold which was going up is falling. Where should normal people invest in now?”

Another frustrated outburst from Swami, and some more seconds of silence followed.

Finally Jigneshbhai had a smile on his face – which always perplexes Swami even more – and after a minute of silence, he said “May be you should try investing in chit funds”.

That was almost the nail in the coffin for Swami. This time he turned to me. “I will stop coming to these coffee meetings if your broker friend keeps teasing me like that. I am telling him about my losses, and he is telling me to get into another fraud.”

Jigneshbhai looked at me and then at Swami again, and broke into laughter. That lightened our mood, and also Swami’s, who flashed into a smile also.

Bending forward towards Jigneshbhai, he spoke in a hushed tone and confessed, “By the way, I had almost fallen prey to a chit fund few years back, but thank god, at the last moment I backed out.” And then relaxing in his chair, he asked, “By the way, what are chit funds?”

Jigneshbhai looked at Swami and smiled again. “I am not going to educate you again on everything now. Why don’t you invest in a bit of education for yourself?”

A bit confused, Swami thought about it and said, “Yeah, but I do watch CNBC everyday!”

Hearing that, Jigneshbhai burst into the loudest laugh I had heard from him so far. “Arre Swami, I don’t mean entertainment, I mean real education. Take some genuine courses, maybe buy some good books. I can recommend a few.”

Hearing that from my broker friend, it was Swami’s turn now to break into a silence. He sipped his coffee for a while and thought about it. When we finished our coffee, he asked for the bill. As we were preparing to leave, he finally said “Yeah perhaps I should. It might keep me out of trouble. But they are expensive.”

Just then, the wealthy man from the sprawling bungalow walked across our table and stopped near Swami’s chair. He had been over hearing our chat for the past few minutes like so many occasions in the past.

He paid our bill, and as we stepped out, with a firm tone, he told Swami, “If you think education is expensive, try ignorance.”