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Weekly Bot Brief Newsletter on Robotics 4/5/2019

POSTED 04/07/2019

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

Bot Index Highlights:
For the first week of the second quarter both the Bot Index and S & P 500 did not disappoint investors. The bots gained 3.71% while the broad market jumped 2.06% on favorable employment news and hopes that continue to swirl around China/U.S. tariff issues. Several Asian-based components of the Bot Index provided superior performance, with Yaskawa Electric leading the charge having a 14.89% gain for the week! Hiwin Technologies and Fanuc Corp. each rose almost double digits while Omron Corp. increased 7.87%. Six other Bot Index components experienced performance exceeding 5%. They included NVIDIA Corp. whose 6.34% upswing led the shares to a new YTD high. Lincoln Electric’s purchase of Baker Industries prompted the shareholders to bid up the stock 6.84%. IRobot, Rockwell Automation and Faro Technologies gained 5.67%, 5.63% and 6.38% respectively. NIO Corp. recovered some 5.10% (despite ‘piling on’ by more litigation firms) as news of Chinese economic improvement filtered into Wall Street. The stock may have also benefited from an Investor Place article, “High-Risk Stocks to Trade: Go Long NIO”.

There were only three names within the portfolio of robotic issues that produced negative returns. Cyberdyne Corp. fell 6.24% following last weeks appearance in the Bot Brief as being one of the first quarter’s strongest gainers. Accuray Inc. suffered a 5.87% decline as Simply Wall Street indicated it is not likely to turn a profit until 2020 and is currently encumbered by an excessive level of debt. Finally, Ekso Bionics (the best performer for the first quarter within the Bot Index) declined less than half of a percent as the stock may be ahead of its positive fundamentals.

Artificial Intelligence Again:
It was extremely disappointing to hear about the failure of Google’s initiative to create an ethics council regarding Artificial Intelligence. Google executives sought outside advice on AI’s impact on various projects within the company such as facial recognition and the impact of human biases within the machine learning framework. Barely a week into the project, however, it was halted due to those same biases the company had sought to overcome as it moved forward into the complicated world of Artificial Intelligence.

It is imperative that, before the Pandora’s Box is totally opened, there is supported and international dialogue on how AI can be best used for the betterment of mankind. The disappointment over a failure to address these issues is reminiscent of Dicken’s Tale of Two Cities opening paragraph, “it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter if despair, we had everything, we had nothing.” Surely, Artificial Intelligence can provide us with wisdom, belief, light, hope and everything. Unfortunately, it can also bring foolishness, incredulity, darkness, despair and nothing. Like any tool within the agricultural, industrial, electronic and robotic revolution, it must be controlled and maintained so we can have the ‘best of times’ and not the ‘worst of times’.

With the Artificial Intelligence market set to grow from $21.46 billion in 2018 to $190.61 billion by 2025, the applications of AI within virtually all aspects of human life will be significant if not revolutionary. In order to prepare for the uncertainties that AI will bring governments, educational facilities scientists and corporations must come together to define, measure, control and monitor how this new tool can best be of service.

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