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The Bot Brief

POSTED 07/30/2023

"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

Both the Bot Index and the S & P 500 recorded modest gains in last week’s trading. The broader index exceeded the 73-basis point gain of the bots by 27 basis points. The bots were led by a sterling 13% increase in shares of Textron. The company reported earnings and revenues of $1.46 per share and $3.42 billion respectively. Earnings growth was 31.5% year over year while sales gained 8.6%. The company increased guidance for the year of $5.20-$5.30 from $5 to $5.20. The Bell Helicopter subsidiary recently beat out Lockheed Martin for the replacement of the famous Black Hawk.

Continued excitement over AI led to the 10.55% gain of Google and the 5.51% increase in NVIDIA Corp.

The cyber-knife producer, Accuray Inc., rose 6.33% following its addition to the Russell 2000 Index and a Wall Street report entitled, ‘There’s Been No Shortage of Growth Recently for Accuray’s Return on Capital.’

On the weaker end of the bot’s performance for the week included a near 10% drop that was due to a defect in one of its product lines. “The company disclosed it discovered a manufacturing defect in its Pratt & Whitney unit from a rare condition in powered metal used to make certain engine parts, which will require "accelerated fleet inspection." The defect does not impact engines currently in production, but a "significant portion" of the PW1100G-JM engine fleet will require removals and inspections in the next nine to 12 months. The PW1100G-JM engines power the A32neo commercial planes made by Airbus.  RTX estimates roughly 200 accelerated removals will be required by mid-September this year.

Teledyne fell 7.35% despite reporting a beat on both earnings and revenues.

Lastly, iRobot led the weaker group with its 16.59% decline. Amazon informed investors that it would be reducing the pricing for its acquisition of iRobot due to the company’s new capital raise to support operations.

 2020's Decade of Bot Index Performance

Not So Fast AI:

As Lee Corso has frequently regaled us on Game Day with his ‘Not so Fast’ comments that are in opposition with his co-anchors, it seems that AI has some explaining as well. In the latest of Popular Mechanics (yes, the one you read as a kid!), the magazine noted that in 2011 the governor of Michigan got caught up in the allure of Artificial Intelligence. The governor “authorized funds for the Michigan Unemployment Insurance Agency to develop a new algorithm that was designed to detect fraud. Over the next two years, the AI system falsely accused more than 40,000 people of fraud, in many cases forcing them to pay egregious fines.” According to the paper, the problem with the $47 million program was that it created such a short-cut to recognizing fraud outside human purview that allowances for deviations in reporting was not accounted for adequately.

Evidently, there have been several instances where governments have utilized AI to extend employee capabilities. Consequently, the need for more human oversight and not AI reliance is imperative.

 

 

 

 

 

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 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 the material presented.