Cockatoos Are Getting Smarter. Should Humans Be Worried? | Kanebridge News
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Cockatoos Are Getting Smarter. Should Humans Be Worried?

Scientists in Australia say some birds have figured out how to defeat efforts to keep them out of garbage bins, and now they appear to be teaching the others

By MIKE CHERNEY
Thu, Oct 20, 2022 9:00amGrey Clock 4 min

STANWELL PARK, Australia—Outside a local cafe, a sulphur-crested cockatoo perched on a garbage bin, trying to open the lid. Another loitered nearby, waiting to see if its companion found tasty morsels in the trash.

The birds, a type of parrot that is native to Australia, were acting out a common scene in this beachside suburb. There was a lock on the bin, but it seemed either broken or not properly closed. Coffee cups littered the street.

“It is chaos every Tuesday morning,” said Grant Drinkwater, 61, who has experimented with various devices to stop cockatoos from getting into his bins, which are collected that day each week. “Some people put bricks on top of their bins, but the cockatoos just push them off with their nose.”

This otherwise idyllic coastal neighbourhood is Ground Zero for what scientists call a potential “innovation arms race” between humans and cockatoos battling for control of the area’s garbage bins. As the cockatoos figure out ways into people’s bins, the humans respond with evermore elaborate devices to protect their garbage.

Trashy encounters between man and beast aren’t uncommon, as any suburban resident who has tried to keep raccoons out of the rubbish can attest. But in Australia, the age-old tension has reached wild heights.

The unusual bird bin-opening, a behaviour which scientists believe developed only in recent years, is now the subject of rigorous academic study. Researchers say it’s a unique opportunity to investigate how two species can learn—that is, cockatoos teaching others how to get into bins or people swapping bin-protection methods with their neighbours—to quickly adapt to what the other is doing.

Many days, the cockatoos seem to be winning.

Mr. Drinkwater thought he had a solution: He attached a piece of wood to the underside of his bin lid, which he figured would make it too heavy for the cockatoos to lift. It worked until the lid snapped off during trash collection one week, when a garbage truck used a robotic arm to grab the bin and turn it upside down.

He then switched to using a brick, but the cockatoos knocked it out of the way, got into the bin and threw trash all over the street. Now, he wedges a plastic drink bottle in the hinge of the lid, which he says prevents the birds from fully flipping it open. But some of his neighbours still have their guard down. On a recent trash day, an unprotected bin on his street was hit.

“It was a demolition derby,” said Mr. Drinkwater, recalling one particularly bad morning when cockatoos tossed garbage everywhere.

To open a bin, a cockatoo generally uses its beak and foot to lift the lid, shuffle along the side of it and then flip it over. Only a small percentage of cockatoos can flip the lid, but once it’s open, other birds dive in to search for food.

In a recent study, scientists found 52 different ways that people protected their bins from cockatoos. That ranged from weighting the bin lids to shoving old sneakers or a pool noodle in the hinge to fitting specially designed commercial latches onto the bins that residents call “cockie locks.”

In one case, someone tried to scare away the cockatoos with a rubber snake. Another person installed spikes to prevent the cockatoos from landing.

“I was just super excited about the variety,” said Barbara Klump, a behavioural ecologist at the Max Planck Institute of Animal Behavior, a scientific research institute in Germany, who led the research. “Originally I thought, ‘How many methods can there be to block the access to a bin?’ ”

The researchers grouped the bin-protection devices into multiple categories based on their sophistication, and confirmed the birds could defeat “low efficacy” methods like a rock on top of a bin. The study, published in the scientific journal “Current Biology,” included a picture of a cockatoo pushing away a brick.

Employing what they called a “spatial network approach,” the scientists found there were clusters of bins with similar protection methods. They also used data from an online survey to develop a mathematical model to show how human countermeasures changed over the years.

The cockatoos are good problem solvers, said Richard Major, a bird ecologist at the Australian Museum, a museum of natural history in Sydney. They generally eat a lot of grass seeds, roots and berries, but clearly aren’t picky. Dr. Major said he’s seen a cockatoo eating a chicken drumstick, and another gorging on what looked like a whole baked fish carcass.

“They’ve actually started to work in packs,” said Edith McNally, a retired school principal, who often sees cockatoos rummaging through bins on her morning walks in the neighbourhood. “It’s like gang warfare.”

Residents say the key is to prevent the birds from flipping the lid, which allows other birds to raid the bin. But the defences still have to allow the bin lid to open for the garbage truck. Ms. McNally, 73, tried wedging a broom handle into the lid’s hinge, but the handle sometimes fell into the garbage truck when the bin got tipped upside down.

Now she uses a cockie lock, which she says seems to be effective. One Australian company that makes the locks, Secure-A-Lid, says it uses a “gravity-release design mechanism” that disengages the main latch when the bin is tilted by garbage collectors.

Owner Brett Sweetnam was inspired to develop the device after his bins were raided by cockatoos, though it can protect against any creatures that might rummage through the garbage, he said.

Scientists say more research needs to be done. Dr. Klump and her colleagues are still running a survey to see if the bin-opening behaviour spreads to other areas.

Cate Bridgford, 22, who works at the cafe where the cockatoo was trying to open the bin, said that one time, the birds tossed soiled baby diapers from the garbage all over the ground.

“I don’t get mad at the birds. The birds, they just do what they do,” she said. “Those are our raccoons.”

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Equities are often seen as expensive after promising start to 2023

By CAITLIN MCCABE
Mon, Jan 30, 2023 7 min

A new trading year kicked off just weeks ago. Already it bears little resemblance to the carnage of 2022.

After languishing throughout last year, growth stocks have zoomed higher. Tesla Inc. and Nvidia Corp., for example, have jumped more than 30%. The outlook for bonds is brightening after a historic rout. Even bitcoin has rallied, despite ongoing effects from the collapse of the crypto exchange FTX.

The rebound has been driven by renewed optimism about the global economic outlook. Investors have embraced signs that inflation has peaked in the U.S. and abroad. Many are hoping that next week the Federal Reserve will slow its pace of interest-rate increases yet again. China’s lifting of Covid-19 restrictions pleasantly surprised many traders who have welcomed the move as a sign that more growth is ahead.

Still, risks loom large. Many investors aren’t convinced that the rebound is sustainable. Some are worried about stretched stock valuations, or whether corporate earnings will face more pain down the road. Others are fretting that markets aren’t fully pricing in the possibility of a recession, or what might happen if the Fed continues to fight inflation longer than currently anticipated.

We asked five investors to share how they are positioning for that uncertainty and where they think markets could be headed next. Here is what they said:

‘Animal spirits’ could return

Cliff Asness, founder of AQR Capital Management, acknowledges that he wasn’t expecting the run in speculative stocks and digital currencies that has swept markets to kick off 2023.

Bitcoin prices have jumped around 40%. Some of the stocks that are the most heavily bet against on Wall Street are sitting on double-digit gains. Carvana Co. has soared nearly 64%, while MicroStrategy Inc. has surged more than 80%. Cathie Wood‘s ARK Innovation ETF has gained about 29%.

If the past few years have taught Mr. Asness anything, it is to be prepared for such run-ups to last much longer than expected. His lesson from the euphoria regarding risky trades in 2020 and 2021? Don’t count out the chance that the frenzy will return again, he said.

“It could be that there are still these crazy animal spirits out there,” Mr. Asness said.

Still, he said that hasn’t changed his conviction that cheaper stocks in the market, known as value stocks, are bound to keep soaring past their peers. There might be short spurts of outperformance for more-expensive slices of the market, as seen in January. But over the long term, he is sticking to his bet that value stocks will beat growth stocks. He is expecting a volatile, but profitable, stretch for the trade.

“I love the value trade,” Mr. Asness said. “We sing about it to our clients.”

—Gunjan Banerji

Keeping dollar’s moves in focus

For Richard Benson, co-chief investment officer of Millennium Global Investments Ltd., no single trade was more important last year than the blistering rise of the U.S. dollar.

Once a relatively placid area of markets following the 2008 financial crisis, currencies have found renewed focus from Wall Street and Main Street. Last year the dollar’s unrelenting rise dented multinational companies’ profits, exacerbated inflation for countries that import American goods and repeatedly surprised some traders who believed the greenback couldn’t keep rallying so fast.

The factors that spurred the dollar’s rise are now contributing to its fall. Ebbing inflation and expectations of slower interest-rate increases from the Fed have sent the dollar down 1.7% this year, as measured by the WSJ Dollar Index.

Mr. Benson is betting more pain for the dollar is ahead and sees the greenback weakening between 3% and 5% over the next three to six months.

“When the biggest central bank in the world is on the move, look at everything through their lens and don’t get distracted,” said Mr. Benson of the London-based currency fund manager, regarding the Fed.

This year Mr. Benson expects the dollar’s fall to ripple similarly far and wide across global economies and markets.

“I don’t see many people complaining about a weaker dollar” over the next few months, he said. “If the dollar is falling, that economic setup should also mean that tech stocks should do quite well.”

Mr. Benson said he expects the dollar’s fall to brighten the outlook for some emerging- market assets, and he is betting on China’s offshore yuan as the country’s economy reopens. He sees the euro strengthening versus the dollar if the eurozone’s economy continues to fare better than expected.

—Caitlin McCabe

Stocks still appear overvalued

Even after the S&P 500 fell 15% from its record high reached in January 2022, U.S. stocks still look expensive, said Rupal Bhansali, chief investment officer of Ariel Investments, who oversees $6.7 billion in assets.

Of course, the market doesn’t appear as frothy as it did for much of 2020 and 2021, but she said she expects a steeper correction in prices ahead.

The broad stock-market gauge recently traded at 17.9 times its projected earnings over the next 12 months, according to FactSet. That is below the high of around 24 hit in late 2020, but above the historical average over the past 20 years of 15.7, FactSet data show.

“The old habit was buy the dip,” Ms. Bhansali said. “The new habit should be sell the rip.”

One reason Ms. Bhansali said the selloff might not be over yet? The market is still underestimating the Fed.

Investors repeatedly mispriced how fast the Fed would move in 2022, wrongly expecting the central bank to ease up on its rate increases. They were caught off guard by Fed Chair Jerome Powell‘s aggressive messages on interest rates. It stoked steep selloffs in the stock market, leading to the most turbulent year since the 2008 financial crisis. Now investors are making the same mistake again, Ms. Bhansali said.

Current stock valuations don’t reflect the big shift coming in central-bank policy, which she thinks will have to be more aggressive than many expect. Though broader measures of inflation have been falling, some slices, such as services inflation, have proved stickier. Ms. Bhansali is positioning for such areas as healthcare, which she thinks would be more insulated from a recession than the rest of the market, to outperform.

“The Fed is determined to win the war since they lost the battle,” Ms. Bhansali said.

—Gunjan Banerji

A better year for bonds seen

Gone are the days when tumbling bond yields left investors with few alternatives to stocks. Finally, bonds are back, according to Niall O’Sullivan of Neuberger Berman, an investment manager overseeing about $427 billion in client assets at the end of 2022.

After a turbulent year for the fixed-income market in 2022, bonds have kicked off the new year on a more promising note. The Bloomberg U.S. Aggregate Bond Index—composed largely of U.S. Treasurys, highly rated corporate bonds and mortgage-backed securities—climbed 3% so far this year on a total return basis through Thursday’s close. That is the index’s best start to a year since it began in 1989, according to Dow Jones Market Data.

Mr. O’Sullivan, the chief investment officer of multi asset strategies for Europe, the Middle East and Africa at Neuberger Berman, said the single biggest conversation he is currently having with clients is how to increase fixed-income exposure.

“Strategically, the facts have changed. When you look at fixed income as an asset class…they’re now all providing yield, and possibly even more importantly, actual cash coupons of a meaningful size,” he said. “That is a very different world to the one we’ve been in for quite a long time.”

Mr. O’Sullivan said it is important to reconsider how much of an advantage stocks now hold over bonds, given what he believes are looming risks for the stock market. He predicts that inflation will be harder to wrangle than investors currently anticipate and that the Fed will hold its peak interest rate steady for longer than is currently expected. Even more worrying, he said, it will be harder for companies to continue passing on price increases to consumers, which means earnings could see bigger hits in the future.

“That is why we are wary on the equity side,” he said.

Among the products that Mr. O’Sullivan said he favours in the fixed-income space are higher-quality and shorter-term bonds. Still, he added, it is important for investors to find portfolio diversity outside bonds this year. For that, he said he views commodities as attractive, specifically metals such as copper, which could continue to benefit from China’s reopening.

—Caitlin McCabe

 

Find the fear, and find the value

Ramona Persaud, a portfolio manager at Fidelity Investments, said she can still identify bargains in a pricey market by looking in less-sanguine places. Find the fear, and find the value, she said.

“When fear really rises, you can buy some very well-run businesses,” she said.

Take Taiwan’s semiconductor companies. Concern over global trade and tensions with China have weighed on the shares of chip makers based on the island. But those fears have led many investors to overlook the competitive advantages those companies hold over rivals, she said.

“That is a good setup,” said Ms. Persaud, who considers herself a conservative value investor and manages more than $20 billion across several U.S. and Canadian funds.

The S&P 500 is trading above fair value, she said, which means “there just isn’t widespread opportunity,” and investors might be underestimating some of the risks that lie in waiting.

“That tells me the market is optimistic,” said Ms. Persaud. “That would be OK if the risks were not exogenous.”

Those challenges, whether rising interest rates and Fed policy or Russia’s war in Ukraine and concern over energy-security concerns in Europe, are complicated, and in many cases, interrelated.

It isn’t all bad news, she said. China ended its zero-Covid restrictions. A milder winter in Europe has blunted the effects of the war in Ukraine on energy prices and helped the continent sidestep recession, and inflation is slowing.

“These are reasons the market is so happy,” she said.

—Justin Baer

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