For younger investors (not me, that's for sure), it's good to take chances. That's because most of the money they invest over the next decade will be new money. If they score big on one investment, and completely blow out another, they win, and still have the nice flow of new money each year, to look for more winners. For older investors, most of the money they will be investing comes from returns on what they already got. One big mistake, and there is no way back.
That's for sure -- words to live by. Ask me, I recently got a reprieve from earlier losses in gold. I was in too early, taking Chartcraft's advice on gold in '97 and '98, before the central bankers started thowing their national reserves at the market price, targeting it for suppression in their enthusiasm to keep the G-7 monetary daisy chain intact. The result was some big early losses in Barrick common and Central Fund of Canada as the market was trying to bottom, and a U-boat ride in Battle Mountain (later Newmont) preferred that I recently closed out with a gain, having been under water still as recently as the start of the year.
Your words about "new money" and "old money" ring true. My industry is shedding older workers (illegally, but this is Texas, an employment-at-will state, and the malefactors are backed up in depth with a former Texas governor in the White House and a Texas oil-service CEO in the vice-presidency) and trying to rotate to Gen X and Gen Y as fast as they can to crush G&A by working the Gen X'ers on 72-hour workweeks and reneging on hiring, even (and especially) in the face of dire need. They are also using deliberate short-staffing as a tool to force line management to high-grade exploration portfolios. As a result, half the energy professionals in Houston, which is the energy capital of the planet, are underemployed or unemployed. This state of affairs reflects the advice dispensed to managements by Harvard B-school products over the last few years. A memorable Harvard Business Review article from 1994 or 1995 advocates imposing high work and intrapreneurial demands on the entire workforce, similar to what they did with the suite in the 80's and early 90's. No budget, no direction, but build us a division, a department, a wholly-owned subsidiary out of string and chewing gum. That kind of performance demand, the writer said, needs to be catholicized as a condition of continued employment. Well, they are in the implementation phase now, boy howdy -- people I know who are still working are twitchy-jumpy with multiple levels of fatigue and approaching burnout/neurosis/heart attacks pretty quickly. Hence the youth movement.