[In]Securities Guest Blog: Still a Wonderful World by Aegis Frumento Esq

November 27, 2019

Still a Wonderful World

No doubt about it, it all looks grim as we work to close out the twenty-teens. Chaos truly seems to rule the world. Every day is filled with news of dysfunctional if not downright crooked leadership, in Washington and around the globe, and generally of a world in woe. I don't need to list it, everybody knows.

It's easy to think that the apocalypse is nigh. And it's easy to be wrong to think so. Those fears come from how we think, and only by rethinking how we think can we escape the gloom those fears darken.

One of the very best books of the past decade is Nobel Prize winner Daniel Kahneman's Thinking, Fast and Slow. If there is one non-fiction book everyone should read, this is it. Kahneman summarizes a lifetime of thinking about how we think, and his conclusions explain almost all the hysteria and anxiety we feel these days.

One of his most important observations is that in formulating any thought, we are necessarily confined to what we know, and what we know best is what we actually experience. From this commonsense premise comes what he has labeled WYSIATI - What You See is All There Is. WYSIATI determines how we view the world and make judgments on it.

Of course, there's a hell of a lot more to the world than what we see. We all know that. But we only know that intellectually. Emotionally, our first-hand experiences drive how we feel and what we believe more than any book-learning ever will. WYSIATI will explain most of the behavior of persons and groups that some of us are pleased to label "irrational." We do so because our imagination fails us. We don't stop to think that if our experiences were theirs, we too might very well act as they do. And so we become polarized.

The antidote to this is to learn more but more than that to imagine more. Kahneman offers, as a corollary to WYSIATI, a rule to remember: "Nothing is ever as important as you think it is while you are thinking about it." The mere act of contemplating a set of bad facts makes them feel worse than they really are. Likewise, pondering good happenings makes them feel better than they really are. It's a mind trick. And it screws us up all the time.

So we ponder the news and naturally conclude we are going to hell in a bucket. Someone wrote the other day that we should actually look upon these days optimistically. Throughout history, great positive change has always been preceded by what seemed like the darkest of days. The Civil War led to the industrialization of the country; the Robber Baron era led to the Progressive Movements of the early 20th Century; Depression and World Wars led to prosperity in the 50s and 60s. If you're old enough, like me, you don't even need to read history. You can just remember it. I lived through assassinations, race riots, draft riots, Vietnam, Watergate, the Iran hostage crisis, the Tech Bubble, the Dot.com Crash, 9/11, and the Great Recession. And I remember that each action led to an equal and opposite reaction. Why would I think that today, no matter how grim it looks, will play out any differently?

Being a fledgling Old Fart, I have a perspective that our younger citizens lack, simply because they haven't lived long enough to have seen with their own eyes how the world goes. Things go to hell, and then the sky brightens. No matter how dark, day comes again. It always does. We need to remind our children, some of whom are experiencing the night for the first time with fear it will never end. And we need to remind ourselves, too.

David Leonhardt in the Times suggests taking a "tech Sabbath" once in a while -- unplugging all devices to stop the newfeeds that clutter our neurons and distort our perspectives. It's not a bad idea, especially for Thanksgiving. Redirect your WYSIATI to something more wholesome -- to family and friends, food and football, joy and laughter. But before you unplug and enjoy your Thanksgiving turkey, listen as the wise Satchmo reminds us what to be thankful for.

Aegis J. Frumento
Stern Tannenbaum & Bell
Co-Head, Financial Markets Practice

380 Lexington Avenue
New York, NY 10168

Aegis Frumento is a partner of Stern Tannenbaum & Bell, and co-heads the firm's Financial Markets Practice. Mr. Frumento represents persons and businesses in all aspects of commercial, corporate and securities matters and dispute resolution (including trials and arbitrations); SEC and FINRA regulated firms and persons on regulatory compliance issues and in SEC and FINRA enforcement investigations and proceedings; and senior executives of public corporations personal securities law and corporate governance matters.  Mr. Frumento also represents clients in forming and registering broker-dealers and registered investment advisers, in developing compliance policies, procedures and controls, and in adopting proper disclosure documents. Those now include industry professionals looking to adapt blockchain technologies to finance and financial market enterprises.

Prior to joining the firm, Mr. Frumento was a managing director of Citigroup and Morgan Stanley, a partner and the head of the financial markets group of Duane Morris LLP, and the managing partner of Singer Frumento LLP.

He graduated from Harvard College in 1976 and New York University School of Law in 1979. Mr. Frumento is a frequent author and speaker on securities law issues, and is often quoted in the media on current securities law developments.

NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of BrokeAndBroker.com Blog.