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MitonOptimal Weekly Comment - Week 5, 2015Previously, I discussed the extinct Moa, a New Zealand bird that was wiped out by the Māori hundreds of years ago. Whilst I promise that this will be the last weekly piece about flightless Kiwi birds (pun intended), the Kakapo and Pukeko are also New Zealand bird species that faced the same dangers as the Moa and are still alive today.

The message from the Moa was that learnt behavior or complacency relating to the year ahead may be your biggest enemy. The Moa was not able to adapt to its new predator and became extinct.

The Kakapo is critically endangered and relies on Government conservation for survival. It is a flightless parrot that has also struggled to adapt to the new normal of the past 1,000 years and whilst hunted for its feathers and meat, probably would have gone the same way as the Moa unless it gave up and became a pet!

In contrast, the Pukeko is still common today and is much better adapted to the modern world. According to Māori mythology, they were renowned for bold scheming and determination. They even thrived once cats and rodents were introduced to New Zealand and when they are unsuccessful at repelling predators, they abandon their nest site and move to new arrangements.

What has this to do with investing? Well, the investment lessons from all this are that (1) quickly recognizing the danger, (2) adapting to the new normal, (3) not blindly accepting the past averages and (4) dogged determination, all potentially lead to survival. The VIX is commonly referred to as a ‘fear gauge’ and, when at low levels, complacency is at its highest, such as over the past 2-3 years in the chart above.

If we had a “predator” VIX in 1200 AD, the Moa, Kakapo and Pukeko would have obviously all traded that situation very differently!

Kakapo imageThe Kakapo (Māori: kakapo, night parrot) Strigops habroptilus (Gray, 1845), also called owl parrot, is a species of large, flightless, nocturnal, ground-dwelling parrot of the super family Strigopoidea endemic to New Zealand. Like many other New Zealand bird species, the kakapo was historically important to the Māori, the indigenous people of New Zealand, appearing in many of their traditional legends and folklore. It was hunted and used as a resource by Māori, both for its meat as a food source and for its feathers, which were used to make highly valued pieces of clothing. It was also sometimes kept as a pet. The Kakapo is critically endangered.

Pukeko imagePūkeko is the common name, derived from the Māori language, for the purple swamphen (Porphyrio porphyrio) of New Zealand. The subspecies occurring there is Porphyrio porphyrio melanotus, which is also found elsewhere in Australasia. The Takahē, a flightless endemic bird of New Zealand, has the purple swamphen as its closest relative, though its ancestor arrived in New Zealand, probably millions of years ago from Australia, long before the purple swamphen did.Pukeko are not endangered and classified as common.

Weekly comment Week 5 2015 - Kakapo and Pukeko - SC.pdf



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