After Friday’s dip that was instigated by a surprisingly negative jobs report and tariff turmoil, my old feelings of fear set in with echos of Liberation Day ringing in my ears. All week I’d been watching Alex Honnold documentaries on NatGeo streaming. Honnold is considered one of the greatest rock climbers of all time. And arguably the greatest free soloist ever—ascending deadly routes without a rope.
One of the main reasons Alex is so good at what he does is that he’s got an uncanny ability to remain calm under extreme pressure. Watching him summit rock face after rock face helped put my recurring market worries and fears into perspective, causing me to draw parallels about investing in the stock market.
Take Warren Buffet who is considered one of the best investors of all time. He too can remain calm when all others are afraid. This has been a key driver of his enduring success. It isn’t to say that these guys are without fear during very scary moments; it’s that they’ve conditioned themselves to not let fear dictate their demeanor, and the subsequent actions they take in the moment.
“I've done a lot of thinking about fear. For me the crucial question is not how to climb without fear--that's impossible-- but how to deal with it when it creeps into your nerve endings.”— Alex Honnold
In addition to their mutual ability to not panic when it matters most, both Alex and Warren share other similarities in how they approach their trade. They are both extremely methodical and disciplined about analysis and preparation. Alex meticulously studies every hold and move up any given rock face before a free solo ascent. Warren reads through years of annual reports and financial statements before investing in a company.
But the most critical commonality that I see between Alex and Warren in the context of their respective domains is the fact that they always both maintain a margin of safety. Warren invests in intrinsically undervalued companies with solid fundamentals, paying less than what they’re inherently worth. So he has a built-in margin of safety in his investments despite unpredictable market conditions. Alex’s margin of safety—though he often climbs without ropes—is in his constant physical and mental conditioning. He can easily support his body weight (and then some), doing countless two-finger pull-ups with ease. If he’s unexpectedly surprised by anything during a climb despite his meticulous preparation, he has the margin to power through physically, while keeping composed mentally and emotionally. These aspects about Alex serve as a sort of virtual rope. This is his margin of safety.
"You build a bridge that 30,000-pound trucks can go across and then you drive 10,000-pound trucks across it. That is the way I like to go across bridges.”— Warren Buffet
Not sure where to start or know someone that could use the help? Help them ascend toward financial security and build a margin of safety in their investments by sending them this article and the UVstocks.io link.
P.S. I'm sharing some investment information, but it's important to remember that what I'm providing is for informational purposes only and should not be construed as financial advice.
Happy Investing,
John
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