Weekly Bot Brief Newsletter on Robotics 4/4/2020
Will the coronavirus serve as a 'tipping point' for the acceleration of the Robotic Revolution on the world economy??
Bots in the News:
The Bot Index declined 5.65% last week paced by two of the prior week’s massive movers. Ekso Bionics gave back approximately one third of the 1,645% move it experienced during the final week of March. Offshore International, who also contributed to that week’s large upswing, retreated to the tune of 25%. There were four other Bot Index components that fell by double digits. 3D Systems fell almost 20% as the implied volatility from option premiums signaled a potential large future move in the stock. The Chinese automaker, NIO Corp., declined 14.28% as InvestorPlace published a report that the company’s stock would go to zero sometime this year. The merger of United Technologies and Raytheon did little to assist the stock of United Technologies as it retreated 11.47%. The connection of engines produced by UTX and the problems of Boeing have been weighing on the company’s income. Finally, iRobot was reduced by 12.27% following an article by Zachs entitled, “4 Reasons You Should Avoid iRobot Stock Right Now”.
There were only eight stocks among the bots that produced positive results for their shareholders. The best of those included Immersion Corp. who rose 5.21% and Accuray Inc. that increased 3.59%. Other gainers were centered in the defense industry including Lockheed Martin, Northrup Grumman and Teledyne Inc. each of which produced mildly positive results.
Performance of the 2020 Bot Index:
A History of Economic ‘Tipping Points’ from Pandemics and Famines: Will Coronavirus Kick-Start the Robotic Revolution:
Of the Four Horsemen of the Apocalypse from the Book of Revelation in the New Testament and in the Book of Ezekiel in the Old, the rider of the Pale Horse, represents Death. Specifically, that form of death created by famine and plague was issued forth by God on mankind so that the earth could ‘rest’.
n looking back at past periods where mankind has faced both plagues and famine, it is interesting to witness the aftermath of such horrific conditions. Following the Antonine Plague of Rome in A. D. 165 five million people died, possibly as a result of a smallpox-like plague. Following the eventual decline of the disease, there was a marked increase in the Roman population to accept Christianity.
The Plague of Justinian which occurred A.D. 541 claimed 10% of the world’s population. Its impact brought about the demise of the Byzantine Empire which stretched from Western Europe across the Middle East.
The infamous Black Death, which purportedly killed half the population of Europe (and served as the inspiration for Edgar Allen Poe’s The Masque of the Red Death), led to two major changes in the course of world history. The first was the determination that it was transmitted due to unsanitary conditions which allowed rodents and their accompanying fleas to thrive. In the aftermath of the plague, more attention was made to a more sanitary environment. Secondarily, the plague led to the end of serfdom. Since labor had become scarce, wages increased and technological advancements to production were discovered.
In the mid sixteenth century, the Cocoliztli epidemic killed 15 million Mexican and Central Americans. The purge allowed the Spanish conquest of the mainland of Central and South Americas, whose population was ultimately decimated by an estimated 80%.
One of the most devastating diseases throughout history was smallpox. The disease has been found on Egyptian mummies and has been a scourge to mankind in the ensuing centuries. Much like today’s coronavirus, smallpox’s periodic spread was through economic commerce, colonization or the Crusades. Trade and travel allowed uninfected regions, which had no built-up immunity to the disease, to experience the full wrath of the ailment. Throughout history three of ten victims of the disease died. The eradication of smallpox, through Edward Jenner’s recognition that milkmaids seemed immune as a result of their development of the similar, but less lethal cowpox. His discovery led to the eradication of many communicable diseases through his publication and medical acceptance of his theories in On the Origin of the Vaccine Inoculation which was published in 1801.
The death of one million inhabitants of Ireland between 1845 and 1849 was a result of the potato crop failure that decimated one half of the crop in 1845 and three quarters of the crop for the next seven seasons. The failure forced the diaspora of perhaps one million Irish, many of which landed in the United States. The fact that Great Britain did little to assist in its dominion over Ireland has been presumed to serve as the foundation for the Irish Free State in 1922 and, ultimately, the Republic of Ireland founded in 1937.
Using the preceding examples of the consequences of past pandemics and famines it might be rightful to assume there will be some form of global repercussions to the coronavirus when this crisis subsides. May this become the ‘tipping’ point in advancing the Robotic Revolution? The international sequestering of the population has disrupted virtually every form of economic production and delivery. Humans are creators of both supply and demand for goods and services. When forced into a societal isolation, the demand remains, but the supply is disrupted. It is likely that this crisis may become the catalyst that will prompt a more widespread utilization of robots to augment both the production and delivery cycle.
Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association.
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.