You might remember back in December we wrote about some common cuckoos who spend the Spring and early Summer in the wetlands near Beijing, China and then migrate South. No one knew exactly where these cuckoos went so scientists fitted five birds with micro solar tags connected to satellites. Two of the birds were lost but three made it not only to India but an additional 2,300 non-stop miles to the East coast of Africa.
So where are these birds today? Two of them made it all the way back from Africa and are now happily feasting on caterpillars in the Beijing wetlands. Three of the original five didn’t make it or lost their responders. The survivors, Flappy and Meng, covered over 19,000 miles. Remember these birds weigh all of 3.5 oz. Quite a story of evolution and the diversity of our world.
Speaking of evolution, someone once said that life is all about chance and the laws of physics. The three tagged cuckoos who didn’t make it had their luck run out. Humans like to say, “there but for the grace of God go I.” We humans never know when our luck is going to run out as recent random terrorist attacks around the world attest.
The Economist did a piece some years back about luck and the laws of physics (and in this case, the laws of geology). In April 1815 Mount Tambora, a volcano on the Indonesian island of Sumbawa, erupted. It was, and still is, the most powerful eruption of the past 500 years, and as the chart above shows, volcanoes have an effect for years on global climate and the global economy. In the case of Tambora, agriculture suffered, famines ensued and climate-wise, some areas got incredible amounts of rain while other previously lush areas went bone dry.
What is the point of all this? First, that we can’t do much about disasters, either natural ones or even man-made ones. (The only good news about volcanos is we usually get advance notice before eruptions). A second point is, the best way to position ourselves for calamities is to be balanced. In our investments, this means holding some real estate, some stocks and some bonds. We just don’t know what the future holds.
Most all of us crave certainty but certainty is not something we can buy, even at the highest prices. So be careful what you pay for investments. Be a skeptic and a Value investor. Stay as balanced as possible, live within your means and yes, be an optimist and hope for the best. This last part is probably good health advice!
