The Bot Brief

Bots in the News:

Some clarity regarding the impending tariff and trade wars last week allowed financial assets to shuck off their bear cloth. The higher beta Bot Index jumped 6.32%, recovering about a third of the tariff destruction over the past few weeks’ trading. The broad market likewise jumped a significant 4.59%.

Of the thirty stock Bot Index there were only four stocks with negative returns. While most were somehow connected to the defense or energy industries, the largest drop occurred by Northrup Grumman. The company reported a 6.6% decline in revenues, a 49% slide in net and profit margins fell to 5.2% from 9.13%. The poor results prompted Jim Cramer to announce, “This One’s Moving to the Penalty Box”. No wonder shareholders forced the stock down12.43%.

The Bots enjoyed six stocks that gained double digits. The first quarter earnings by Faro Technology reflected a remarkable recovery from a $7.27 million loss to a net income of $906 thousand. Earnings per share of 4.8 cents compared favorably to the $.38 loss in the first quarter of 2024.

Other providers of double digit returns for their shareholders included: Tesla +18.06%, Yaskawa Electric +14.50%, NIO +14.45%, Joby Aero +10.36% and Cognex Corp. +10.05%.

Subsea Mining……Again:

The Bot Brief has been an ardent proponent of utilizing robotic exploration of both outer space and the oceans. Almost a decade ago we interviewed researchers from the Japan Agency for Marine-Earth Science and Technology (JAMSTEC) regarding their mining of their Exclusive Economic Zone. Short on land sourced minerals, Japan has been mining cobalt, molybdenum and manganese for years.

In the Bot Brief dated 9-1-2023 we noted, “The exploratory and extraction of manganese nodules by the Japanese Agency forMarine Earth Science and Technology (JAMSTEC) within the Japanese Economic Enterprise Zones (EEZ) was a bellwether in unmanned harvesting of the ocean’s mineral bounty. Lately, however, due to the overwhelming need of certain metals for batteries, other ventures are starting to view these nodules as a practical alternative to earth mining. Currently, Indonesia produces half ofthe world consumption of nickel which is essential for today’s cathode charged EV batteries. Consequently, Indonesia has been on a mining joyride, devastating its rainforests and impacting the environment while providing for economic expansion. Recently, however, two international firms are vying to have their robots harvest the manganese, cobalt, nickel and copper rich nodules in the Pacific’s Clarion Clipperton Zone southeast of Hawaii. It is estimated that the zone may contain 340 tons of nickel alone. While this figure is three times the estimate of the world’s land-based reserves, it is also notable that the nodules have much higher concentrations of the metal than land-based deposits. This translates to higher profitability and lower processing environmental costs."

Well, to follow-up, just this week an announcement from the U.S Administration indicates that there is some interest in replacing the foreign produced rare minerals with elements found underseas. This week, President Trump signed an executive order ‘to help foster and facilitate the exploration, extraction and processing of minerals from the seabed.’ With China imposing severe restrictions on its exports of rare earth minerals, the executive order was deemed critical to national defense and companies whose raw materials will be restricted or eliminated.

President Trump, in signing the order, made the following comments, “Our nation can, through the exercise of existing authorities and by establishing international partnerships, access potentially vast resources in seabed polymetallic nodules, other subsea geological structures and coastal deposits containing strategic minerals such as nickel, cobalt, copper, manganese, titanium and rare earth elements which are vital to our national security and economic prosperity.”

Yet further reinforcement for the use of robotics and automation in the advancement of mankind.

Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association (now A3 Automation), Member IEEE.

The Bot Brief is a weekly newsletter designed for economists, investment specialists, journalists, and academicians. It receives no remuneration from any company 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 the material presented.