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Weekly Newsletter

Weekly Newsletter on Robotic Research and Investment Review 1-6-2017

The BOT Index is an unweighted reflection of the major public companies that are involved in robotics relative to the broader S & P 500. Currently, it is comprised of 30 corporations which are broken into categories including (1) users of robotic equipment in the production phase of product development, expansion or distribution; (2) creators of mechanical robots; (3) drone manufacturers; (4) 3-D printing; and (5) artifical intelligence. The Index is international in scope with 20 U. S. based concerns, 5 Japanese companies and 5 European entities. As the industry evolves and the scope of robotic application

expands, the technicians at Balcones Investment Research will make modifications to the Index’ components. For a list of the current BOT Index representatives, please contact BalconesInvestmentResearch.com.

Bot Brief Index Highlights

The Bot Index surged during the first week of the new year, its 3.33% gain almost doubling the 1.7% return of the S & P 500. Paced by the 10.31% increase recorded by Mazor Robotics, the Bot Index had only 4 of its 30 components in negative territory during the week. Mazor’s double digit return followed the company’s announcement of the placement of 21 surgical guidance system orders in the final quarter of 2016 and 62 systems for the entire of the year, a 138% improvement over 2015. Other robotic companies noting significant gains for the week include ReWalk Robotics (up 8.9%), 3D Systems (gaining 8.8%) and Faro Technologies (an 6.11% increase).

The Bot Brief

There is no force on earth as powerful as an idea whose time has come! Victor Hugo

The stock that captured the interest of investors last year lost some of that luster in the first week of 2017. NVIDIA Corp. dropped 3.41% as investors took profits following the year-end. It appears that self-driving cars are the hit of the Consumer Electronics Show and NVIDIA’s products are an instrumental component. It would be surprising if NVDA doesn’t rebound in the coming week’s trading, as its CEO will be the keynote speaker at the Wednesday Forum.

“Economic Policy Making is Like Playing Chess With 128 Pieces, Each of Which is Moving Simultaneously Over 224 Squares.”Not Only Are There Inevitable Unintended Consequences From Every Policy Decision, There Are a Myriad Of External Forces Impacting and Distorting Each Piece’s Movement!

With that in mind, the U.S and perhaps several European nations are about to embark upon a directional delta in their economic policies. A strategic focus on job generation will, apparently, characterize the new Trump Administration. Half of the agenda is based on job creation through tax incentives and growth

expectations, with the other half upon job protection. It is this latter portion of the platform that was the catalyst for the Trump victory and has contributed to the growing nationalism and immigration concerns in Europe. As a recent New York Times article entitled, The Long-Term Jobs Killer is Not China. It’s Automation, aptly noted, the robotic revolution is a wild card that could wreak havoc on President Trump’s chessboard.

There have been hundreds of articles written about the impact that robots and AI will have on employment. In academic and journalistic circles, the debate revolves around whether that impact will be additive or contractive. At least in these groups there is a debate and relevant facts are uncovered and used to substantiate or refute the hypotheses. However, nowhere within the political and legislative universe does there appear to be any recognition whatsoever on this looming economic opportunity or pariah. Without the anticipation of the implications of the robotic revolution on employment, taxation, education and defense, there can be no strategy on the chess board. The advances in automation are becoming exponential and there is a real need to prepare for, and make

allowances for, a force that is destined to become a major factor in our collective economies and within our social framework. Ignoring the significance of this event is not an option.

Throughout history the primary focus of obtaining an advanced education was in preparation of obtaining a job upon graduation. Already, we are seeing many college grads unable to find full time, fulfilling employment. The situation will only be exacerbated as robotics assumes a greater and greater relevancy. From where will the taxes to run the government and service its debt come if unemployment is endemic? Without income, what will drive consumer demand? Just as there are no Ferrari dealerships in Haiti, the ability to consume will always trump willingness to consume.

In the past, automation has been structured to conform to mankind’s needs and abilities. The steam engine, the cotton gin, the automobile, the elevator, aircraft and my Keurig Coffee machine have all been created to service my needs… with some human input. In the future, however, it may be mankind that will have to conform to the

age of robotics. Fortunately, we are an adaptive species and, if history is any guide, mankind will find robotics to be beneficial in many ways. However, the time to recognize and prepare for an incremental layer of chess pieces is upon us and our economic policies have become just that more difficult. Let’s hope our politicians will become Bobby Fischers!

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 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.

Balcones Investment Research can be reached at its website BalconesInvestmentResearch.com and is headquartered in Florida; with offices in Texas and North Carolina, United States

Cover photo courtesy of The Mirror, UK