Is free soloing a 101-story building risky? It’s an interesting (and relevant) question, and one that most people probably have a definitive answer to. And if you’re a Netflix subscriber, you’ve probably seen why this is relevant. On Saturday evening (after being delayed one day due to weather), Alex Honnold, the most accomplished rock climber in the world, didn’t just climb Taipei 101; he free soloed it. For those of you who have never followed climbing, this means he ascended the 1,667-foot megastructure without ropes, harnesses, or any safety net whatsoever.
It was a spectacle that had millions of people holding their breath. While this feat may seem like a reckless stunt to the uninitiated, it is actually the culmination of a lifetime of disciplined practice by an athlete who has spent decades mastering his craft. Beneath the adrenaline and the terror of the “Skyscraper Live” event lies a fascinating framework for thinking about risk and danger. Honnold isn’t reckless; he is perhaps the most calculating risk manager on the planet. And his philosophy offers a profound lesson for anyone trying to navigate the markets.
The Man Behind the Climb
Honnold’s journey to the top of Taipei 101 began long before he set foot in Taiwan. Born in Sacramento, California, he started climbing in a gym at the age of 5 and was climbing “many times a week” by age 10. Unlike many prodigies, Honnold claims he was never a “gifted” climber but rather one who loved the sport enough to climb constantly. He dropped out of UC Berkeley to live in a van and pursue climbing full-time, eventually gaining mainstream recognition in 2008 for his free solo of the Regular Northwest Face of Half Dome in Yosemite.
His approach is defined by meticulous preparation and visualization. He breaks climbs down into specific sequences, rehearsing them until they are ingrained in his muscle memory, often describing his process as imagining a “choreographed dance.”
This obsessive preparation was most famously demonstrated during his 2017 ascent of El Capitan, a feat chronicled in the Oscar-winning documentary Free Solo. Honnold became the first person to free solo the 3,000-foot granite wall via the Freerider route, a climb described by fellow climbers as the “moon landing” of free soloing. To prepare, he spent a year rehearsing the route with ropes, memorizing every hand and foot placement, especially in the most difficult sections. While El Capitan usually takes climbers days to ascend, Honnold completed his rope-free climb in just 3 hours and 56 minutes.
The “Bamboo Box”
The Taipei 101 itself presented its own unique challenges. Standing 1,667 feet tall, the building was once the world’s tallest skyscraper when it opened in late 2004 (before being displaced by the Burj Khalifa in 2009). It features a design inspired by traditional pagodas, consisting of eight stacked segments, known as “bamboo boxes.”
Unlike natural rock, which is varied, the building offers a monotony of repetitive movements on glass and steel. These sections overhang by 10 to 15 degrees, requiring sustained physical effort and core tension, which Honnold identified as the most demanding part of the ascent. While the building’s balconies offered periodic rests (a safety feature not found on El Capitan), the climb still required absolute precision to navigate the 101 stories without a safety net.
The Risk Equation
Honnold’s ability to perform in such high-stakes environments stems from his distinct philosophy regarding danger. He defines risk using a simple but critical distinction:
Risk = Probability (P) × Consequence (C)
Probability is the likelihood of a failure, while the consequence is the severity of the outcome if that failure occurs. For a free soloist, the Consequence (C) is static and catastrophic: death. There is no mitigating it. Most people look at that consequence and immediately label the activity “high risk.”
Honnold, however, focuses entirely on the Probability (P). By rehearsing every move, visualizing every potential error, and preparing for every contingency, he drives the probability of falling so low that the activity becomes, in his mind, “low risk.”
Even though Honnold may be wired a bit differently, as brain scans have shown that his amygdala (the brain’s fear center) is highly unresponsive to stimuli that would terrify the average person, his point of view is highly logical. Not only that, it is very similar to the math used for the expected value of a probabilistic event.
The Investment Angle
This framework of “low risk, high consequence” offers a compelling parallel to the world of investing. Investors often conflate risk (volatility or the probability of short-term loss) with consequence (permanent loss of capital). Just as Honnold mitigates the probability of a fall through research and rehearsal, a disciplined investor mitigates financial risk through due diligence, understanding of an asset’s fundamentals, and diversification.
A high-stakes investment (think a private equity investment in an early-stage startup) might carry a high failure rate, as most startups (~90%) never become viable companies. But does that mean this is a risky investment for a hypothetical investor? Well, it’s important to consider the consequences. If this investor puts all their investable net worth into the startup and needs that money for retirement, then yes, it is wildly risky. This is because of the combination of high probability of failure and high consequence of loss. However, if the investor sizes their investment appropriately as a portion of their overall portfolio, the actual risk may be lower than it appears. Conversely, avoiding all perceived “risky” assets might seem safe, but could carry the high consequence of failing to meet long-term financial goals due to inflation or lack of growth.
Tolerance vs. Capacity
This ties in nicely with a concept of “Risk Tolerance” vs. “Risk Capacity.” When most individuals think about their comfort level with certain investments, they primarily focus on risk tolerance. This is the emotional side of the equation; it can be innate or learned, but it dictates how well you sleep at night when the market is volatile. Risk capacity, while often overlooked, is a factor we try to discuss with our clients. Having the capacity for risk can present itself in multiple ways, but we’ll look at two short scenarios:
- Scenario A: A young couple, dual professionals with excess income, who have 30+ years to retirement. Not only does this couple have a long-term horizon, but they also have incremental savings, which can help them overcome short-term investing hiccups (such as an allocation to a startup that goes bust).
- Scenario B: A retired couple who have saved diligently throughout their lives and have a modest retirement lifestyle. It’s something we say all the time: it’s almost more important what you spend than how much you have. Given that this couple isn’t living the high life, they’re likely only drawing a small portion of their portfolio. This means even if there is a market correction, they’ll have time for growth and won’t permanently impair their savings by overdrawing while it’s down.
Understanding your capacity for risk can lead to a more appropriate total investment allocation and one that is not “too” conservative, given your specific situation.
Mastering Your Own Risk
Ultimately, Alex Honnold’s ascent of Taipei 101 serves not only as a masterclass in climbing but also as a lesson in distinguishing fear from actual danger through probability and consequence. Whether on a skyscraper or in a portfolio, the key to managing risk lies not in avoiding it entirely, but in rigorously reducing the probability of failure or the magnitude of the consequences. Honnold demonstrates that with enough preparation, what looks like a roll of the dice to the rest of the world can actually be a calculated, controlled, and well-executed plan.
Markets / Economy
- Markets were volatile but positive for the week as President Trump whipsawed the market with updates on Greenland and tariffs. The S&P finished the week down -0.4%, the Nasdaq down -0.1%, and the small-cap Russell 2000 down -0.3%.
- The U.S. economy expanded at an annualized rate of 4.4% in Q3 2025, slightly above the initial estimate of 4.3% and marking the strongest GDP growth since Q3 2023.
- The U.S. core personal consumption expenditures (PCE) price index increased by 0.2% MoM in November, unchanged from October and in line with market expectations. On an annual basis, core PCE inflation edged up to 2.8% in November from 2.7% in October, also matching forecasts.
Stocks
- U.S. equities were in negative territory. Financials and Real Estate led the decline, while Energy and Materials outperformed. Value stocks led growth stocks, and small caps beat large caps.
- International equities closed higher for the week. Emerging markets fared better than developed markets.
Bonds
- The 10-year Treasury bond yield increased one basis point to 4.24% during the week.
- U.S. bond markets were in positive territory this week, while International bond markets were negative.
- Corporate bonds led the week, followed by high-yield bonds and government bonds.
