Yesterday, professional climber Alex Honnold ascended the exterior of Taipei 101. No ropes or a harness. Just quiet precision on one of the world’s tallest buildings.
To most observers, the act looked incomprehensible. Reckless, even. Yet in the interview, Honnold described his decision-making in a way that was strikingly sober. He spoke not about courage, adrenaline, or risk-taking, but about understanding the difference between risk and consequence.
Risk is about probability. Consequence is about irreversibility.
This distinction matters far beyond climbing. In investing, it is the difference between enduring volatility and suffering permanent loss.
Honnold does not seek danger. He filters environments so thoroughly that only situations with tolerable consequences remain. Before any climb, he asks a simple question: if something goes wrong, can it be survived?
If the answer is no, the climb does not happen. No amount of preparation or confidence changes that rule. This is not fearlessness. It is discipline.
In financial markets, risk is often framed as volatility. Prices move. Sentiment shifts. Headlines change. These movements are uncomfortable, but they are recoverable. They are part of the journey.
Consequence is different. Permanent capital loss is not a fluctuation. It is not noise. It is irreversibility.
The primary responsibility of a long-term fund manager is therefore not to eliminate volatility, but to avoid ruin.
At Eu Capital, we have always believed that enduring wealth is built by accepting manageable risks while rigorously avoiding asymmetric outcomes. This is why we stay away from leverage, financial derivatives, and situations where a single mistake can permanently impair capital. Some of these paths can generate impressive short-term returns. They can also end journeys abruptly.
We prefer progress that looks uneventful. We accept periods of underperformance. We live with discomfort. But we design portfolios so that mistakes, when they occur, remain recoverable.
This philosophy is not about pessimism. It is about survival. Compounding only works if you stay in the game.
The calm that long-term investing requires is not a personality trait. It is the result of eliminating unacceptable consequences before they arise. Just as Honnold earns his calm upstream, through preparation and restraint, so too must investors earn theirs through structure, patience, and respect for uncertainty.
Risk is unavoidable. Irreversibility is not.
That difference has guided our decisions since inception, and it continues to shape how we steward capital today.