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Weekly Bot Brief Newsletter on Robotics 1/31/2020

POSTED 02/02/2020


   "There is no force on earth more powerful than an idea whose time has come."         Victor Hugo


Bots in the News:

The accelerating death toll by the spread of coronavirus has put investors at bay, at least for the time being. The higher beta bots, together with the more vulnerable Asian companies that comprised the Bot Index, forced the Bot Index well below the decline experienced by the S & P 500. With the broad market off 2.12%, the bots slid a bit over 4%. Three companies were off by double digit percentages while three Asian components slid over 7%. The worst performer for the week was, not surprisingly, the Chinese electric car company NIO Corp., whose fortunes fell almost 19%. The 53x price-to-earnings ratio of Cognex contributed to its 11.71% drop and iRobot fell 14.11%, to complete the double-digit decliners. iRobot’s reversal was based upon Zachs Research who announced its expectations for a 50% earnings reduction when the company reports fourth quarter results on Wednesday the 5th.

Of the thirty stocks that comprise the Bot Index there were only three that produced positive results for the final week of January. The 7.90% increase by Amazon led the few gainers due to a Benzinger’s analysis that noted, "Amazon Delivers In A Big Way And Analysts Say There's Even More Upside". Textron added 2.78% and Teledyne rose .88% as both companies rode the crest of positive earnings reports by the majority of defense manufacturers.

Technological Progress:

In an Economist article in its Free Exchange page, the author explored how economists can influence the course of technological advancement. In reviewing several papers on why technology advances occur as they do, it appeared that the allocation of scarce resources was a primary factor in past innovations. Now, the disruptive forces from Artificial Intelligence, which some policy makers feel could eliminate vast employment and create social unrest, can be engineered to assist human labor rather than replace. A paper from Nobel laureate Joseph Stiglitz suggests that AI could be channeled to assist labor rather than displace and avoid the social and ethical issues that are certain to accompany this new form of technological advancement. The feature ended with, “Innovations with overwhelming productivity advantages could prove devastating to social trust or equity. In the face of radical technological change – in ai, robotics and genetic engineering – societies will inevitably argue over which technological paths should be explored. Economists’ views belong in these conversations – provided they are crafted with humility and care.”

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