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Weekly Bot Brief Newsletter on Robotics 9/4/2020

POSTED 09/06/2020

"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, 9-4-2020

Despite the disastrous Thursday and Friday of last week, early week market strength and an upswing by all the Japanese holdings within the Bot Index, allowed it to exceed the S & P 500 during the first week of September. Led by Cyberdyne Inc.’s double digit return, the Japanese stocks of Fanuc, Yaskawa Electric, OMRON Corp., and Keyence all produced positive gains in NIKKEI trading. Irrespective of the resignation of President Abe, Japanese stocks were buoyed by the announced $6 billion investment by Warren Buffett into several Japanese business concerns.

Despite being placed on Zacks’ Strong Buy List during the week, shares of Brooks Automation was the leading loser during the week. Off almost 10%, the stock’s recent strength served as a catalyst for investors to take profits in the international concern. Tesla’s recent 5 for 1 stock split was insufficient to support the stock’s still skyrocket valuation. Consequently, investors dropped the stock as well as its sister splitting tech company – Apple, during the week.

Concerns over earnings for the second quarter led investors to drop AeroVironment 6.5% and a class action lawsuit impacted Cognex to the tune of 7.62% for the week.

A Recovery of Reason:

Several years ago, we wrote a piece entitled, “A Recession of Reason” that parodied Dicken’s 

A Tale of Two Cities. Our perception was   reason and logic were becoming less important than political ideology. What was once considered good behavior and correct human choices, were becoming less paramount than ideological conceptions. In a clear contrast to this unique form of ‘recession’ was the publishing of Marion Tupy’s upbeat new book, Ten Global Trends Every Smart Person Should Know. In reviewing the statistical trends of the advancement of humankind, Tupy weaves a narrative of just how much improvement has occurred since the Industrial Revolution (1760 – 1820). Since that time, “the size of the world’s economy has grown more than a hundredfold. Over the past 200 years, the world’s population grew somewhat less that eightfold.” World poverty levels have fallen from 84% in 1820 to 8.6% by 2018. Urban population has risen to 55% and since, “Cities are the centers of innovation, engines of growth and are home to the richest segment of the population”, the movement away from rural to urban environments has been a boon to the human condition. 

With the Industrial Revolution, came a changing nature of work. In 1790 the percent of U.S. workers in agriculture was 90% and has fallen to only 2% today. With changes in regulations and alternative sources of production, even the manufacturing 2020 Bot Index vs. S & P 500, 9-4-2020sector (which initially drew workers from the farm) has been superseded by the service sector. This factor is significant in demonstrating the malleability of workers to adapt to changing economic circumstances.

Positive changes in the environment, education, gender and income inequities, agricultural production, nutrition, health, and democracy have all been experienced in this ‘sweet spot’ of humankind over the past 50 years. Given these contributions to the human condition since the Industrial Revolution, would it not be reasonable to assume a similar level of advancement might be associated with the Robotic Revolution? Certainly, humans will need to be adaptable to the new work and social environment but, as with all species, adaptability is the key to survival. Undoubtedly, mankind will prevail and prosper under the integration of robots into society.

Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association, 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 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.