Weekly Bot Brief Newsletter on Robotics 12/27/2019
"There is no force on earth more powerful than an idea whose time has come." -Victor Hugo
Bot Index Highlights:
Despite the NASDAQ having crossed the 9,000 mark for the first time in history, neither the Bot Index nor the S & P 500 experienced any significant headway during the week. The Bots dropped .4% while the broad market edged upward by just over one-half of a percent. As in last week, the Bot Index was negatively impacted by the decline of one particular issue. Last week that decline was attributed to the 32.8% drop in Ekso Bionics. This week it was the 18.87% slide in the shares of Qiagen N.V.. Investors were disappointed when the company declared that it was not considering a buyout offer purportedly from Thermo Fisher. The report that Qiagen had received a ‘conditional, non-binding indication of interest for a full acquisition” had pushed the stock up to over $42 from the upper twenties in the past few weeks.
NIO Corp. was the only other bot stock that experienced a double-digit decline during the week. The company is set to report earnings on Monday December thirtieth and investors are nervous on the status of the income outlook. To further compound investor unrest is the fact that its rival, Tesla, has received a 10% tax exemption from its Shanghai produced Model 3 and will start delivery next week.
On the positive side of the index were shares of Amazon who benefited from ‘Super Saturday’ which has been pronounced as the largest single retail sales day in history.
Following Amazon was Immersion Corp. whose 4.55% gain was based upon on a video commentary by Zach’s that mentioned the stock positively due to valuation and strong top line growth.
Both Apple and iRobot were mentioned in a piece by Investors Business Daily as beneficiaries of ‘gadget’ buying for the Christmas holiday. Both stocks gained around three and three quarters percent.
Some Projections for 2020:
Your ophthalmologist will tell you that 20-20 eyesight represents perfect vision. Unfortunately, the perfect vision for 2020 will be difficult to ascertain. With that caveat here are the Bot Brief’s projections for 2020:
Despite an easing of international trade that was somewhat subdued in 2019 due to tariffs, countries will closely guard their disruptive technologies in the coming year. The example of Huawei versus the U.S. is merely a precursor to governmental restrictions regarding predator technology disruptors.
Many companies will begin to employ AI assistance within their normal business cases. We don’t contemplate that AI will make radical self-learning capabilities simply because of the apprehension of releasing a new unbridled technology. However, the assistance provided by AI can dramatically enhance human productivity and the time it takes to assimilate and interpret data. As Shakespeare’s Polonius advised his son, “The wind sits on the shoulder of your sail.” Surely, companies will fear being left behind this branch of the Technological Revolution and, as we have seen with the impact that Amazon and internet sales have had on the retail industry, no company wants to be complacent. Hence, capital spending on AI and other automated technologies will begin to explode.
As we have stated in the past, economic growth will no longer be heavily dependent upon demographic labor force growth rates due to the impact of these disruptive industries on productivity. Therefore, we are anticipating continued world-wide economic expansion.
The advent of autonomous vehicles and personal electric aircraft will receive significant headlines in 2020 but not significant headway. A U.S. firm has indicated it will start marketing its solo flying vehicle in 2020 that has a 30-mile range and speed of 60 mph. A two-seater flying taxi is expected to be in use in several Chinese cities in the coming year. It is doubtful either self-driving automobiles or flying vehicles will produce much in the way of economic activity in 2020.
In the search for incremental production capital based upon our expectations for increases in technology CAPEX, a number of startup and incubation companies will successfully float equity issues in 2020.
As we are based within 20 miles of Cape Canaveral, we have been intrigued by the expansion in non-governmental space exploration. With the 2020 proximity between Earth and Mars, at least 4 nations are planning Mars probes. We feel robotics will play an increasing role in the research, development, exploration and colonization in the future. In 2020, these efforts will commence.
Member: American Economic Association, Society of Professional Journalists, Institute of Chartered Financial Analysts, Robotic Industries Association, Institute of Electrical and Electronics Engineers (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 and its commentaries, analysis, opinions and research represent the subjective views 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