An irreverent Wall Street Blog
[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.
ABOUT THE AUTHOR
Aegis J. FrumentoStern Tannenbaum & Bell
Co-Head, Financial Markets Practice
380 Lexington Avenue
New York, NY 10168
212-792-8979
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.