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Two events happened last month that made me question if there is a peak years of experience for advisors.
The first one was my sister was due to have her baby the weekend after Thanksgiving but she hoped she would be able to hold off until that Monday. She believed only the doctors who recently graduated from medical school had to work on holidays and she wanted “someone with experience in case something went wrong.”
The second one was when Magnus Carlsen, age 22, defeated Viswanathan Anand to become the world chess champion. In a New Yorker article about the match, the author states Anand “at nearly 44 years old was getting old for top-level chess.”
I have no doubt both the new world chess champion and the new doctor put in their 10,000 hours of studying and practice in their respective fields yet why does youth inspire confidence in one instance yet have the opposite impact in another?
I believe it has to do with the speed of change and the price of failure.
Some industries, such as IT, evolve so rapidly that your years of experience fixing yesterday’s problems (Commodore 64) are meaningless to me today (iPad).
Other industries, such as medical and financial, experience tends to inspire confidence because if things go wrong the results can be severe.
Is there, however, a peak years of experience?
I believe I am a better investor now because I have lived through market highs and lows and seen how people reacted than I was when I first graduated from college and had only read about bubbles and panics.
I also know I have hesitated buying certain stocks and bonds because I remember when they were priced much lower only to watch them go up even higher.
