Be Like an Octopus: A Children’s Day Letter

Every Children’s Day, I find myself thinking about the things that first sparked my curiosity as a child. For me, it was animals, the way they moved, survived, thrived.

I remember standing at the Delhi Zoo with my father, pressing my face against the glass, mesmerised by creatures I’d only seen in books. The zoo just reopened this past Saturday after being closed for two months, and over 8,000 people showed up on the first day. It reminded me that some fascinations never really leave us. What I didn’t realise back then was how much those early lessons in nature echo deeply in the world of finance.

Finance, too, has its own animal kingdom. You’ve heard me discuss how bulls and bears dominate markets, sharks circle deals, unicorns emerge from startups, and doves and hawks guide central banks. But lately, I’ve been thinking about a creature entirely different. Not the loudest or the biggest, but perhaps the most intelligent: the octopus.

Stay with me here! The octopus survives, thrives, through adaptability, intelligence, and a kind of strategic patience that, frankly, most of us could learn from. Especially when it comes to investing in the world we’re living in right now. Here’s what’s remarkable: an octopus can live anywhere. Shallow reefs, deep ocean trenches, coral forests, and rocky caves. It changes its colour, texture, and even its behaviour to match whatever environment it finds itself in.

Sound familiar? It should. In the past 25 years alone, we’ve navigated at least six massive financial shifts together: the dot-com crash, the 2008 financial crisis, the COVID-19 pandemic, the copyright frenzy, the green transition, and now the AI revolution we’re all trying to understand.

Each time, the investors who did well weren’t the ones who held on white-knuckled to old strategies. They were the ones who adapted early. The data backs this up. Morningstar tracked diversified investors who rebalanced their portfolios at least once a year during market turmoil. Over the past 15 years, they earned about 1.8% more annually than those who remained in place. That might not sound dramatic, but compound that over time — it’s the difference between a comfortable retirement and exceptional wealth.

What I’m trying to tell you is this: the “set it and forget it” era is over. We’re now in the “learn and adjust” phase. Adaptability isn’t just an admirable trait anymore — it’s alpha. It’s how you win.

Here’s my favourite octopus fact: two-thirds of its neurons aren’t in its brain — they’re in its arms. Each arm can sense, decide, and act somewhat independently. One arm can be searching for food while the other arm is defending against a predator. Yet somehow, they all work together as one coordinated organism. And it is precisely how I want you to think about your portfolio. Your “eight arms” might look something like this: equities, bonds, gold, real estate, international exposure, startup investments, alternative assets, and continuous learning (yes, I’m counting that as an asset class).

Each one operates differently. Each responds to different conditions. But together? They form a single, intelligent, and resilient whole. McKinsey found that globally diversified portfolios beat concentrated equity portfolios by 2.5% annually over the last decade. That’s not luck — that’s distributed intelligence at work. When one arm is struggling, the others keep you stable. When opportunity strikes, you have multiple ways to seize it.

The octopus is also famous for its camouflage, but here’s what people miss: it’s not about hiding from everything. It’s about observing before acting. The octopus watches, waits, reads the room, then makes its move with precision. In investing, this is gold.

Right now, India’s seeing record IPO enthusiasm. Everyone’s excited. Everyone’s jumping in. But here’s what the numbers tell us: nearly half of these IPOs underperform within a year. The octopus investor would wait. Study the fundamentals. Let the hype settle. Then act when intrinsic value becomes clear.

I know it’s not exciting to sit on cash when everyone around you is making “quick gains.” But in an era of algorithmic trading and sensational headlines, sometimes the smartest thing you can do is be strategically invisible. Quietly accumulate quality. Let everyone else chase the noise.

If an octopus loses an arm, it doesn’t panic. It doesn’t give up. It just grows back. Patiently. Methodically. This is the resilience we need to build into our investing lives. Losses happen. They’re not failures, they’re tuition. What separates wealth-builders from wealth-destroyers is what happens next. Do you panic-sell at the bottom? Or do you rebalance rationally, learn from what happened, and rebuild deliberately?

Behavioral finance research shows that investors who stayed invested and rebalanced after market crashes outperformed panic sellers by nearly 4% annually over 20 years. Four per cent. That’s not just money — that’s peace of mind, compound interest, and the confidence that comes from knowing you can weather storms. Wealth isn’t built by avoiding losses. It’s built by regenerating wisely, over and over again.

Behind all these octopus traits of adaptability, distributed intelligence, patience, resilience, there’s a single meta-skill that makes everything else possible: learning to learn. We were all born with this.

Think about yourself as a child. You explored, questioned, and experimented without fear of failure. You were a learning machine. Somewhere along the way, many of us stopped. We settled into what we know. But in a world where hard skills become obsolete in five years and algorithms can do routine thinking better than we can, the ability to learn, unlearn, and relearn is what future-proofs you. The octopus embodies this. Each of its eight arms explores independently. It experiments in real time. It encounters something new and figures it out. That’s what I want for you — not just as investors, but as people navigating an uncertain world.

My dear readers, this Children’s Day, I’m thinking of that child at the zoo, fascinated by the creatures behind glass. I’m thinking about the fearless curiosity we all had before we learned to be afraid of being wrong. The octopus reminds me that intelligence isn’t about being the biggest or the strongest. It’s about being curious, adaptable, resilient, and strategic. It’s about learning from every environment, every setback, every surprising opportunity. That’s the investor I want you to be. Not the bull or the bear. The octopus.

Stay curious. Stay patient. Keep learning, unlearning, and relearning!

Best Regards

Dr. Tarunika Jain Agrawal Ph.D.

Alpha Research

Disclaimer: The perspectives provided reflect our expectations of the economy, market, and investments, which may or may not materialize. Investors are encouraged to conduct their own due diligence before investing.