A Stockbroker’s Tale, Part 2: The Questions We Never Ask

All of us, the entire sixth floor of brokers, stood with muted headsets dangling from our necks as we clustered around televisions hanging from the ceiling. Normally, ticker tape scrolled 24/7 across the bottom of the screens as talking heads breathlessly spelled triumph or gloom depending on the energy of the hour. But now the screens filled with scenes of black smoke billowing from the Twin Towers and images of planes crashing into the Pentagon and into a field in Pennsylvania.

It was eerie—in that vast space usually humming with the cacophony of so many voices and so much frenetic energy—to have everything be stone cold still. All the money in the world, all the power in the world, was impotent in that moment, even if only for a flash. Reports detailed how Cantor Fitzgerald, a financial services firm, lost virtually its entire New York workforce, 658 dead. These were people like us, working in a building like us, doing a job like us. That morning they went to work just as we had, but they would never be going home.

In the years previous, the dot.com boom had led to wild speculation and people treating the stock market like a slot machine. Technology stocks had been on a five-year scorcher, but, in a Wall Street-style Chernobyl, it culminated in a cataclysmic meltdown. The Nasdaq index dropped 77%. A slew of companies went belly up. Unemployment skyrocketed. Things were dire. And then terrorists struck, and everything about our future and economy and way of life felt threatened. On that terrible day, we couldn’t have imagined the recovery that was coming. Soon the phones would go mad again. That feverish ticker tape would scroll again with new highs. The talking heads would soon be punch drunk with how the good times were back. 

The Fed responded to the shock of 9/11 by doubling down on lower interest rates in an attempt to stimulate the economy, while shoppers responded to the odd patriotic call to defy the terrorists with consumeristic abandon: spend! spend! spend! The money engines revved with new fury. Capital poured into the markets. Only a year previous, my firm had (for the first time ever) laid-off employees, but now they couldn’t hire brokers fast enough. Management cajoled us into working overtime. One afternoon an American Express Travelers Cheque arrived in my mailbox, a crisp gold bill that was my employer’s way of saying: Thank you for enduring the insanity…please don’t leave. 

I learned that markets and economies have little interest in deliberative discernment. Few paused to wonder whether all that we’d endured as a nation—all our hubris and our greed, all that we’d suffered through the terrorist attack and the financial collapse—had anything to teach us. Who had time for reflection when it was boomtime again? 

Sometimes the most important questions are the ones we never ask. 

So, with no time for discerning reflection, the market surged. Amid this frothy environment, IPOs (initial public offerings, where a company sells its shares for the first time) were exploding, and I joined our firm’s new IPO team. With the technology boom reigniting new frenzy, a few IPOs’ stock prices skyrocketed, filling headlines with sensational stories of overnight billionaires. The gold rush was on. Investors rushed after the next quick profit, often without any basic understanding of the company they were investing in, or the risks involved. Folks were stepping up to the slot machine again.

As I began to learn the world of IPOs, I saw afresh the underbelly I’d discovered when first interviewing for a broker job. With lots of firms, their only driving concern was to move the IPO shares they’d been allotted. They had a product to sell, and they wanted to sell it—whether or not it was a wise investment for their customer. Eventually, regulators insisted brokers assess customers’ awareness of what they were getting into, but this process was often merely perfunctory. 

This wasn’t our approach. My manager drilled into us how much care we needed to take in explaining what an IPO was and how perilous the whole process could be. We’d slowly walk clients through the litany of questions: Did they understand how the IPO could go down just as easily as up? Were they investing money they were willing to lose? Did they understand the investments they were making? I was proud of our ethical commitments, our forthrightness and attempts to ensure no one was taken advantage of. But this wasn’t how things worked everywhere. 

And yet, in the years since, it’s become obvious that what was needed here was more than only ethics and honest dealing. Remembering our diligence in all those conversations with clients, all those methodical queries, I’m struck yet again by how easy it is to never ask some of the most important questions. Our exchanges—in every broker interaction, not only with IPOs—centered around profit or loss, around risk and portfolio suitability—but we never asked anything more fundamental. How does this company’s business or product align with your faith? Do you actually want to be an owner of this company—do you want to use your resources to contribute to their work in the world? How will your investment in this company contribute (or not) to the common good—and does that matter to you? How is the nobility of work and the goodness of creation being sustained, or harmed, with your investment?

While we wouldn’t expect a broker to pose each of these questions to a client at every turn, the fact is that these vital questions never even occurred to me. They weren’t part of the larger vision. Was anyone having these conversations? Was anyone considering what responsibility we’re taking on whenever we become a partial owner of some enterprise? Was anyone thinking through the immense privilege of using our dollars to do more than prepare for retirement, to actually do good in the world? 

With any investment, we’re foolish if we don’t consider the basic concerns familiar to every investor: risk, market volatility, return on equity, etc. However, wisdom invites us to give diligent attention to far deeper questions, to the many core questions that prevailing investing philosophies rarely stop to ask.