Balcones Investment Research Logo

Member Since 2016


Investment Research and publication of The Bot Brief.

Content Filed Under:



The Bot Brief

POSTED 09/25/2022

v>"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
The robotic sector of the investment world was dealt a bad blow in the market last week. The Bot Index fell 6.39% for the period, well below the 4.65% slide in the S & P 500.
There was only one component within the 30 stock Bot Index that turned in a positive weekly return. Cognex gained 5.67% based upon management comments that raised  revenue guidance for the third quarter. Cognex now sees revenue between $195 million and $205 million, up from a prior range of $180 million to $190 million.
Of the remaining 29 stocks, there were five that fell by double digits. In order of devastation, they were Oceaneering International (-18.3%), NIO Inc. (-12.45%), 3D Systems (-11.41%), Immersion Corp. (-10.37%) and Faro Inc. (-10%).
There was an interesting brief on one of the components of the Bot Index in the IEEE Spectrum Magazine. Entitled, NVIDIA’S New Chip Shows its Muscle in AI Tests, the feature touted NVIDIA’s new Hopper GPU for its 400% increased performance of the company’s already powerful previous models. The new chip bested Qualcomm’s AI 100 to continue the domination by NVIDIA in the AI testing.
2020's Decade of Bot Index Performance
Bots In Space and Energy Making Headlines:
The Chinese have announced that their Chang’E 5 mission has been successful in its exploratory efforts. The assignment to collect samples from the moon and return them to Earth has not only discovered traces of water but has found an altogether new mineral. The mineral is a clear crystal which has been named Changesite-(Y). It is unknown, as yet what properties the new crystal may contain that could be useful, however, Earth crystals have been used in a variety of ways for centuries. A more intriguing find was that of helium-3, an isotope that might be utilized to produce energy via fusion. The element consists of two protons and one neutron, which would make it a non-radioactive alternative to currently used tritium reactors. Currently used in neutron detectors, helium-3 is extremely rare on Earth and has been trading at $17,500 per gram. In perspective, there are estimates that the moon could contain 1.1 million metric tons of the element which, if harvested at a rate of three missions per year, could provide enough fuel for the entire world consumption. In a China National Nuclear Corporation press release, “Analyzing the composition of lunar soil and lunar rock samples and studying nuclear science to assess potential nuclear energy resources on the moon is one of the strategic goals of China’s Lunar Exploration Project.” In 2024, the endeavor is to initiate a construction for a permanent research station.
In Wired Magazine, there is an article in its upcoming September 28th issue regarding the U.S. discovery of what is likely to turn out to be organic molecules on Mars. NASA’s Perseverance Rover has found rocks that have the appearance of barnacles, signifying the potential for some form of life on the Red Planet. The samples were taken in an area that scientists had believed to be an ancient (aka. billions of years ago) lakebed and river erosion. While we won’t know for sure if these visual samples are indeed some forms of primitive life until the samples are returned to Earth in 2033, the discovery is certainly promising. In addition, Perseverance found an empty beer bottle near the edge of the lakebed, prompting speculation about it having been a popular party spot (just kidding about that).
In news closer to home, Amazon announced the construction of a 2.8 million square foot robotic fulfillment center just south of the Daytona International Speedway. The five-story facility is expected to provide 1,000 human jobs and costs $200 million. The Daytona project caps the $18 billion investment by the company in the state of Florida and will provide 52,000 jobs and many thousands of robots. Amazon has developed a number of proprietary robots to fit specific functions. The Fanuc 6 Axis Robot (Fanuc is a component of the Bot Index) is a robotic arm which lifts 3k bound pallets, the Robotic Drive Unit will carry inventory pods within the warehouse to specific locations, the Mobile Order Pod carries inventory to picking stations then to shipping, Hydrogen-fueled forklifts move between shelves and Box on Demand machines produce a selection of package for each individual item to be distributed.
Finally, a Wall Street Journal article noted that China has installed as many robots in its factories in 2021 as the entire world. Due to its past ‘one child’ proclamation, China finds itself with a population of working aged citizens that is rapidly diminishing. Add this to the impact of pandemics and lockdowns, robotic production on the factory floor will be essential for the growth of the Chinese economy. With a need to keep costs down and fill the labor gap, robotic automation is a critical element in achieving growth goals and enhancing productivity. The article noted, “After rising at a 9% (productivity) annual pace on average between 2000 and 2010, output an hour worked in China grew 7.4% a year in the subsequent decade.” By way of contrast, U.S. non-farm productivity FELL 4.1% in the second quarter of 2022. As we have noted in past Bot Briefs, the secular growth pattern of a nation is a combination of its labor force growth rate together with its productivity. The Chinese recognize this and are turning quickly to robotic productivity enhancements that will overcome the pending labor force contraction.
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.
Association for Advancing Automation