Ready For Robots

The other day, I came face to face with an astounding sight — an electronic ordering kiosk at a McDonald’s (MCD).

I placed my order, swiped my credit card, and a few moments later, a human being brought me my fried bounty. Total time: four minutes. It couldn’t have been easier or more convenient.

These kiosks are popping up around the country. McDonald’s says it’s planning 1,000 new kiosks a quarter. Actually, the U.S. market is behind Europe and Canada, where the kiosks more established. The benefits are obvious. The kiosks never get an order wrong. They never get tired. They never take lunch breaks.

At first sight, the kiosk seemed odd, but it really shouldn’t. After all, much of our world is being automated. It’s changing our economy, and even changing our culture. Could we eventually see a day when a McDonald’s is run by machines? I think so.

Science fiction has had a lot of play with this idea, but what’s interesting to me is that the movies have looked at the macro scene, with big robots like Skynet and the HAL 9000. But what’s more intriguing is the micro level. How will an automated world impact boring mundane transactions?

The world of automation is loaded with investing opportunities, but investors need to be careful. Not every stock in this sector will be a winner, but a few have the potential to see fantastic returns. I’ll give you two such examples.

Cognex (CGNX) is what I call the “Terminator” stock. They’re the world’s leading supplier of machine-vision products. Simply put, they help machines see.

These products have dozens of applications. For example, they make code readers that deliver fast and accurate reading of both 1-D and 2-D barcodes. These systems are far more accurate than laser-based ones, and they’re easier for people to work with.

On the assembly line, machine-vision products can detect defects, monitor production lines, guide assembly robots, and track, sort and identify parts such as engine parts and semiconductors. Apple is a key customer.

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