'You qualified as a barrister, why did you become a fund manager?'
'It's a long story. My father, Lucky Mafuta, was an anti-apartheid activist in the seventies and eighties. He spent time on Robben Island, when Nelson Mandela was there.'
'So you were a little girl when he was in prison?'
'Yes. Those were tough times. My mother had to bring up four children in a hut with one room. We were very poor. She struggled to find enough money to visit him in prison. So we moved to Cape Town.'
'When did Lucky get out?'
'Soon after Nelson was released. When Lucky was young he was a socialist. But after South Africa became a democracy in 1994, Mandela wanted the blacks to share the whites' wealth. My father was a miner and the big mining companies made him a director and gave him shares. So he became a rich capitalist.'
'Why didn't you stay in South Africa?'
'To be quite frank, Jack, my Dad embarrassed me. From being a struggling activist with high ideals, he became a fat cat,' she continued. 'The government managed to spread some of the whites' wealth, but it landed in the pockets of elitist blacks. The rest of the people remained very poor. I felt guilty about that, so I decided to leave.'
'You're still privileged.'
She winced: 'I wanted to prove to myself that I could go it alone. So I studied hard and did well at school. For the hell of it, I applied to Oxford. I was amazed when they accepted me. I studied law because I was interested in human rights. But when I qualified as a barrister I couldn't get much work, so I became disenchanted.'
'You could have practised in South Africa.'
'I would have had to retake the exams. English law is different to South African. They practice Roman Dutch Law there.'
'That doesn't prevent you from taking the exams.'
'Too late, I've got used to earning a good living. I don't have to rely on any money from Lucky,' she laughed. 'My fund allows me to keep an eye on Africa. I can monitor corruption. I'm a trustee and advisor of a human rights group.'
'What about your love life, Maffie?' I asked touching the back of her hand. She withdrew it quickly.
'How many times do I have to tell you, Jack? We're good friends. I don't want to spoil that.'
Maffie noticed the disappointment on my face. She knew that at work, things weren't going right for me. It seemed that my gold and bank stock winnings were just beginners luck. I had become frustrated with my trading. I had followed the Manson way, but the system wasn't working. It required patience, but hedge funds are supposed to perform consistently every month. If the shares aren't making profits, you have to close your positions. I wasn't used to that.
At first the shares that I had bought rose about five to ten per cent and then slipped back. Under the risk controls of the fund, I was 'stopped out'. This meant that my losses were limited to a maximum of ten per cent. Time and time again, I was forced to sell. Previously I would have waited. Indeed, several of the shares that I sold, went up a lot afterwards, but it was too late for me, as I was already out.
I had to follow the rules of the hedge fund game and rigidly follow Ruffish's risk controls. That was reasonable from his point of view. He was risking the company's money and couldn't take any chances. I made money some months, but March wasn't a good one. The $1 million fund had fallen to $900,000 and I had traded actively with no success, for six months. It seemed that the boy trader experiment was a flop.
I was having lunch with Maffie that day, because she cheered me up. I was miserable ahead of a meeting with Ruffish early afternoon and was sure that he would fire me. Maffie punched my arm gently.
'In South Africa they call me Themba. It means "Trust, Hope and Faith". That's what you should have Jack.'
'I have trusted myself, but it hasn't got me very far,' I said gloomily as we walked back to the office. 'I like Themba. Why do you call yourself Maffie?'
'Maffie's short for Mafuta. It means Fat. They used to call me fatty Maffie at school. The nickname stuck.'
I glanced at her, but couldn't tell what was hidden under her flowing dress.
'You're not fat, Maffie,' I lied.
She laughed: 'Really? I spend my life dieting. Exercise doesn't seem to work.'
'You could run with me this weekend, Maffie. I could be your personal trainer. My fee is . . .'
I leant over and gave her a kiss on her cheek.
'I think church will cool your ardour Jack. Did you know that I'm in a gospel choir? Come and hear us next Sunday.'
'Provided I see your Zulu war dance after Ruff fires me,' I said half joking.
She slapped me on the back cheerfully and we walked into the building and raced up the stairs.
Aram Zabkian was leaving Ruffish's office as I was about to enter.
'Caught any fish yet, Jack?' he sneered. 'Your aquarium must be almost empty by now.'
I bit my lip. It was best to ignore him. Ruffish was looking at the Aquarium Fund file, when I walked in. He pulled out the results for the end of March. I waited for the worst.
'You're struggling to get going, Jack. Any problems? Girlfriends? Family? Money? Tell me, I'm here to help.'
'I guess the incubator isn't working,' I replied glumly. 'Your chick hasn't hatched.'
'You've been here six months, trading like mad, but you're still down ten per cent. That's not terrible, but not terribly good either.'
'If I continue like this, we'll be down a lot more.'
'Yes, I'm afraid you're right,' sighed Ruffish.
He examined the results over the period; three months when the fund went up and three down months. Down overall, despite all the trading! Only the brokers did well.
'Maybe it's time you went back to school, Jack?'
'Too late. Must wait until September.'
Maffie knocked on the door. Ruffish waved her away. She ignored him and walked in.
'The other guys think that you're crazy to let him manage money. My view is that you should give him more time.'
'And lose more money?'
'You were going to try him out for a year, so stick to that Ruff,' Maffie insisted. 'The other funds are doing pretty well, but emerging markets turn quickly. Who knows? Our funds could slump. He could carry us one day.'
'What do you want to do, Jack?' asked Ruffish. 'You can't be enjoying this.'
'I dunno. I feel like a footballer who is out of form. I just need a good game.'
'Give him another game,' said Maffy. 'I'll back him. But first he must pass his exams. If he does, I'll put $100,000 in Aquarium.'
'I know your fund's performed. But that's a fair whack from your Christmas bonus, Maffie. Sure you want to do this?'
'Sure. He's learnt a lot in the past six months. He'll come right. I'm sure of it.'
The next few weeks, I worked hard on the investment course. I sat the exams expecting to fail, but by some miracle, passed. I was now on the way to becoming a fully-fledged fund manager. Maffie kept her word and put in $100,000 of her own money. The fund's capital was back to $1 million.
* * *
Maffie lived in Kennington, not far from the Imperial War Museum in south London. I was to meet her there at the museum at 10.30am, but I arrived earlier to wander around the place. I climbed up to the cockpit of a Lancaster bomber and looked inside. The plane was huge, but inside it looked cramped. It must have been a sitting duck for German Messerschmitt fighter planes. I walked over to the First World War Section where they simulated the trenches and watched a film about the Battle of the Somme. It put everything in perspective. Succeed or fail in the next few months, I was one of today's fortunate people. Teenagers in the trenches were lucky to reach their twentieth birthday. Many who lived, lost an arm, leg, or eye or eventually died from the effects of mustard gas poisoning. Most World War I veterans were either shell-shocked or had nightmares for years afterwards.
I waited outside for Maffie. It was Sunday. The first week in April. The warm sun brought out the best in the red, pink, white, purple and black tulips
that were swaying gently in the spring breeze. I hadn't felt as relaxed and good as this for a long time. Sitting on the stairs of the museum, next to the columns, I read a book about Christmas Day, 1914 when the British and the German soldiers played football. The next day they were killing each other again.
I looked up and saw her. She was all in white and looked beautiful. The braids were gone and long straight black thick hair, gleaming in the sun, fell over her shoulders. If only she wanted me as much as I wanted her.
Maffie came up and kissed me lightly on both cheeks: 'Hi there soldier! Ready for some gospel.'
She looked me up and down and said that I looked good.
I was going to be Maffie's escort at some fancy lunch after the service and was glad that she approved. We walked to the church, which was a short distance away from the museum. The traffic was dense and noisy, but in a quiet turning, it seemed as if we were slipping back a few centuries. The Georgian church with its white clean walls stood before us. Not far from the green lawn in front was its graveyard with tombstones going back three to four hundred years.
Maffie introduced me to a cheerful, young couple. I walked into the church with them and looked around. It was packed, with a dozen white faces at the most. The vicar of the church didn't deliver the normal boring sermon.
Instead he whipped his congregation into a frenzy. Praised God, Jesus and the community.
'Love your brothers and sisters be they Christian, Muslim or Jew,' he shouted, holding up his fist.
'Amen. Hallelujah,' cried the congregation in response.
The vicar went on making them more and more excited.
'When a man is down, what do you do?'
'Pick him up!' the congregation shouted. 'Jesus loves, Jesus forgives!'
The huge preacher beamed, white teeth shining. Dressed in a black, red and gold robe, he stood out from the choir, only a few feet behind him. All the women were in white. The men wore white shirts and black trousers. It wasn't a church service. It was more like a show and what a performance! Gospel music, moving and uplifting. Sopranos, bass and tenors in harmony. It was not much different from the soul music that my Dad liked so much. In the stifling cell where I'm writing this, I can still hear those wonderful sounds in my head.
Time passed by unnoticed, as members of the choir sang solo and the chorus and the congregation followed. I never thought that I had much of a voice, but I got carried away and sang along with them.
'Singing does a lot for your soul,' said Lettie, the pretty friend of Maffie. I nodded my head. For the first time in my life, I had a true religious experience and it felt good. We stepped out of the church into the bright spring sun. Maffie came up glowing and gave me a huge bear hug. She introduced me to the preacher who shook my hands warmly.
'God bless you young man. I could see that you enjoyed it. Come back any time.'
* * *
Later Maffie and I climbed into a taxi to go to the lunch. The cab got stuck in thick traffic. At the pace that we were going, we were likely to arrive at tea! As the cab crawled passed Elephant & Castle, we decided to get out and rush for the underground. Luckily there wasn't the usual weekend repair works on the line and within half an hour we arrived at Gloucester Road Station. The Coffee Board of India was hosting the lunch at the Bombay Brasserie, nearby.
We arrived about halfway through the buffet lunch. I was expecting a small number of people. But when we walked into the large conservatory in the courtyard at the back of the restaurant, there was a large crowd there. Maffie had told me that the lunch was being held ahead of talks at the International Coffee Organisation. She was meeting some contacts from South America and Africa to get some information about their economies and markets.
I felt small and out of place. These were top government officials from Brazil, Colombia, Costa Rica, Kenya, Ghana, Guatemala, Jamaica, India, Indonesia and other coffee producing nations. They were going to negotiate with delegates from the leading coffee consuming nations -the US, Germany, France, Britain, Italy, Japan and other countries.
We filled our plates with tandoories, curries and poppadoms and found two empty places on a large round table. Two Colombian delegates were at our table. Maffie spoke Spanish and I listened, admiring her. Maffie was not only a lawyer and fund manager, but a singer and linguist. Besides English, Zulu and Xhosa, she could speak French and Spanish. She could even converse with the Brazilians in Portuguese.
The Colombian on my left, realised that I couldn't understand a word.
'Louis Rondario,' he said, giving me his card. He was a top official of the Colombian Coffee Federation, based in Bogata.
'Jack Miner,' I replied. 'I'm afraid I know nothing about coffee. I just go to Starbucks and places like that.'
'A cup of coffee costs you about £1.50, right? That's almost $3,' said Rondario.
'Not sure, never think about the price.'
'No of course you don't. You buy coffee in the supermarket. It costs you about £2.80. That's almost $5, correct?'
'I think so. My landlady buys Fairtrade coffee. They say that they give the farmers a good deal.'
There was a hint of sarcasm in his chuckle: 'Really? Your packet at the supermarket weighs about half a pound. So they are selling you coffee for around $10 a pound. Guess the average price of coffee for farmers in the past six months.'
I thought about the fishing business and the price chain. The fishermen sell fish to the market, which in turn sells to the fishmonger and shops and then the customer. 'Around $3 to $4?'
By now a few around the table were listening.
'60 cents. That's what the Colombians and Brazilians get. We Ghanaians, 48 cents,' shouted a big woman sporting a red and yellow African headdress.
'That's peanuts!' I said.
'They screw us on those as well!'
'Why is your price lower than the Colombians?'
'Colombia, Brazil and other South and Central American countries produce Arabica coffee. It's mild and more expensive than African Robusta coffee which is more bitter…Just like we feel,' she said with a hollow laugh.
'And a year to two years ago, what price coffee?'
Rondario didn't wait for an answer: 'About a $1 a pound Arabica and about 90 cents Robusta. And in the shops? $10 a pound!'
'I know you guys think that you've been screwed,' said Maffie, itching for a good debate. 'But your green coffee beans from the trees must be stored in your warehouses and shipped to the US, Europe and Japan. Lorries must then take the coffee to the manufacturers that roast the coffee beans, so that they're ready for drinking. The coffee must be packaged and distributed to the retailers. They must advertise it. All that costs a lot of money. Labour, machinery, fuel, insurance, rent and marketing. I could go on. Aren't all these guys in the chain entitled to a profit? To a living?'
'We don't dispute that! All we're saying is that between 60 cents and $10 there is one a hell of a gap. Jack's guess is about right. Coffee farmers should be getting $3 to $4 a pound.'
'OK, you think that they're screwing you. So why can't you raise your prices? It's a free market,' argued Maffie. 'That's our big complaint. As an African you should know that only too well, even with your Oxford accent,' said the coffee delegate from Ghana, a little nastily.
Maffie shrugged and I defended her.
'Maffie's a lawyer. She believes in both sides of the story. Why are your prices so low?'
'There used to be international coffee, cocoa and sugar agreements to help poor farmers in developing countries,' explained Rondario. 'The aim was to give the producers a fair deal and consumers a fair stable price. There were minimum prices to help farmers make a living and support their families and a maximum price to protect buyers.'
I was puzzled: 'How did you manage that? If the farmers had big crops, how could they prevent prices from falling?'
'Good question. Producers and consuming nations would meet once or twice a year and thrash out an International Coffee Agreement. The deal was that
farmers around the world were given production quotas. When there was a glut of coffee, farmers around the world would plant less to reduce the size of their crops. If there was a shortage, quotas would be increased and producers would farm more to supply the coffee manufacturers. The agreement was to keep coffee in a price range to satisfy the farmers and Nestle, Maxwell, Lavazza and other manufacturers.'
'Why did the agreement fall apart?'
'Quite simple, you can't interfere with the free market,' said Maffie. 'When there are crop failures, prices go through the roof. The farmers always want more and the consumers want lower prices. Those sorts of agreements always fail.'
'That's true to some extent. It sometimes took three weeks into the early hours of the morning to come to an agreement,' recalled Romario. 'Then the Americans, British and Germans decided that they had had enough.'
'That was the eighties and early nineties when President Reagan and Margaret Thatcher were in power. They believed in the free market,' Maffie said.
'And do you know what then happened? Prices of coffee collapsed,' said Romario angrily. 'Thousands upon thousands of coffee trees were left untended because the farmers were so poor. The land was eventually sold. Guess who bought it?'
He didn't wait for an answer.
'The Colombian drug barons. The land is now used to farm coca to make cocaine! So much for your free market!'
'OK, OK, I take your point,' said Maffie. 'So why are you bothering to meet this week?'
'We want to discuss how to increase consumption around the world. Then your free market should lift prices,' said Romario. 'If the price doesn't rise, more coffee farms will close down.'
'Where do you hold your meeting?' I asked.
'Berners Street, in the West End. You can't observe the meeting of course, but there's a visitor centre. It explains what coffee is all about. You can taste our coffee there.'
An idea began to germinate in my head.
12 - THE COFFEE TRADER
Trader Jack -The Story of Jack Miner (The Story of Jack Miner Series) Page 13
