Learn To Invest With Squid Games 
Posted 24,October

By Chaveendra Dunuwille

In Articles

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Inspired by South Korean children’s games played in the 60s and 70s, Squid Games is the most popular show on Netflix. It was released in 31 languages in over 190 countries on the same day, making the ‘Squid Game effect’ a global phenomenon. 

Thanks to the show, the sale of white vans increased by 7800%, and global searches for the color teal increased by 130%. One of the show’s actors even managed to increase her following on Instagram by over 19 million. Amidst the blood, gore & brutality, a particular aspect of the Squid games can be considered a lesson to all investors. 

(Please note that the subsequent passages may contain spoilers for the show) 

In Episode 3, Cho Sang-Woo, the banker, convinces his team members to pick a different shape in the honeycomb game, containing a circle, triangle, star & umbrella. While at first glance, it may only seem like a high stakes recreation of a children’s game. But, investors may notice that the game makes a subtle reference to risk management, which is a common practice and lesson for all investors. 

In financial terms, the risk is considered the probability of loss relative to the expected return. Unfortunately, many confuse risk-taking with volatility, which often leads to premature judgments with disastrous consequences. As the episode would show, each shape represents a level of difficulty, with the circle being the easiest and the umbrella is the hardest to complete. 

The circle can symbolize cash, low risk for maximum safety. The triangle can represent bonds that are low to middle-risk investments. The star can be considered a stand-in for equity which is riskier than bonds. Finally, the umbrella can represent alternative investments such as property, commodities & private equity, which are high-risk investments. 

The lesson here is not to put all your eggs in one basket, and spreading risk with different investment types is the strategy many successful investors follow. The FTSE Russell UK Investor Balance Index follows this advice as it places 6% of its assets in cash, 20% in bonds, 64% in equity & 10% in alternatives. 

While Squid Games is known for its high stake version of a classic South Korean children’s game, there are a few things we can learn as we enjoy the show. So the next time you invest, think Squid Games.