Balcones Investment Research Logo

Member Since 2016

LEARN MORE

Investment Research and publication of The Bot Brief.

Content Filed Under:

Industry:
N/A

Application:
N/A

The Bot Brief

POSTED 09/18/2022

"There is no force on earth more powerful than an idea whose time has come."       

- Victor Hugo

 

Bots In the News:Bot Index vs. S & P 500

With a plethora of relatively weak economic news, perhaps the most compelling was the pronouncement by the CEO of Federal Express that he is anticipating a ‘worldwide recession.” With the shipping company something of a bellwether of economic activity, the comments by the CEO not only caused a 21% plunge in the shares of Fed Ex, but also served as a catalyst for a general market retreat. The broad market fell 4.77% for the entire week and the Bot Index declined 4.73%.

There were only two bot stocks that experienced positive returns within the entire thirty stock index. Both NIO Inc. and Tesla gained due to micro and macro news. NIO rose 5.17% following management announcement on positive deliveries of the E57 SUV and the introduction of a new ET5 sedan. The news prompted a comment by Deutsche Bank that the company’s stock could double. Tesla, which is also a recommendation of the Deutsche Bank’s auto analyst, increased 1.22% to follow NIO. Both companies are benefitting from some of the provisions of the Inflation Reduction Act and governmental emphasis upon the substitution of internal combustion vehicles with electric alternatives.

The poorest performer during the week was 3D Systems with its 10.68% decline. Faro Corp. and NVIDIA followed 3D Systems closely with drops above 8%. There was a plethora of other components that traded off 7% to 8%. They included AeroVironment, Accuray Inc., Google, Faro, and OMRON Corp.

2020's Decade of Bot Index Performance

Productivity…..Again:

With the dismal quote “Our analysis comes to a depressing conclusion. So far, there is little sign that the global economy is getting more productive.”, the staff of the Economist opined in the September 3rd edition. In viewing the expected post pandemic boom, the authors explored the failure of digitization and new ways of working to lead to a level of productivity growth. The article correctly points out that productivity is the main driver of higher real wages, however, tries to explain away the weakness due to the lag between investment spending and output. Our take, however, is that there are different dynamics at play than merely the impact of cash injections. Not mentioned is the likely weaker productivity created by the stay-at-home mentality, the fact that our service-oriented economy is considerably more difficult to measure productivity than a goods generating economy, that new forms of employment ie. ‘social influencers’, YouTube content producers, day traders, and gig employment contributions to economic growth are negligible. Indeed, it is a conundrum that the labor participation rate is so low, and labor so hard to find, that there have not been further advances by corporate America into the world of robots. Perhaps it is just a matter of time, and the words of Victor Hugo will resonate with abound.

 

 

Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association, Member IEEE.

The Bot Brief is a weekly newsletter designed for economists, investment specialists, journalists, and academicians. It receives no remuneration from any companies that may from time to time be featured in the brief and its commentaries, analysis, opinions, and research represent the subjective view of Balcones Investment Research, LLC. Due to the complex and rapidly changing nature of the subject matter, the company makes no assurances as to the absolute accuracy of material presented.