Zombies are walking dead. They exist solely to destroy living creatures. At least, thats the way it works in movies and popular television shows.
Investors must ask if zombies will destroy the living stock market as well.
Data shows investors hope zombie companies wont destroy viable companies. But the dangers of zombies are growing.
A zombie company is one that doesnt earn enough money to pay its interest expense.
The list includes popular names like ExxonMobil, Delta Air Lines and Boeing.
According to Bloomberg, the list includes about 600 of the companies in the Russell 3000, an index of the 3,000 largest publicly traded companies.
Since the pandemic began, zombies added more than $1 trillion in debt and now owe a combined $1.4 trillion.
Remember that is debt the companies cant afford to pay. Yet, investors seem to be ignoring the risks.
Theyve been buying shares of zombies, and weak balance sheet companies outperformed healthy companies in November. Indexes based on balance sheet strength are shown in the chart below.
Weak Companies Gain Ground
Zombie companies are an international problem. The Bank of International Settlements (BIS), the central bank to the worlds central banks, says about 20% of the companies in Europe and Asia are also zombies.
The BIS notes that Zombie firms tend to concentrate in cyclical sectors like consumer goods, entertainment, airlines and apparel. These are sectors that face additional risks if the economy doesnt recover quickly.
The problem of zombie firms isnt new. A BIS study of the life cycle of zombie companies indicates about 25% of the firms will fail, and about 15% will remain zombies for years.
As for the rest, about 60% [of zombies] formally recovered from zombie status. However, recovered zombies underperform compared to firms that have never been zombies, and they face a high probability of relapsing into zombie status.
Investing is difficult in a strong economy. Investors should strive to put the odds on their side. Right now, in a weak economy, that means avoiding zombies and buying companies with strong earnings and small debt payments.
Michael Carr is a Chartered Market Technician forBanyan HillPublishing and the Editor ofOne Trade, Peak Velocity Trader and Precision Profits. He teaches technical analysis and quantitative technical analysis at the New York Institute of Finance. Mr. Carr is also the former editor of the CMT Association newsletter, Technically Speaking.
Follow him on Twitter@MichaelCarrGuru.
View post:
Zombies Led Novembers Rally, and That Should Scare You - Money and Markets
- Zombie 2nd mortgages are coming to life, threatening thousands of Americans' homes - WFAE - May 20th, 2024
- Spam, junk slop? The latest wave of AI behind the zombie internet - The Guardian - May 20th, 2024
- 'Zombie cells' in the sea: Viruses keep the most common marine bacteria in check - Phys.org - May 20th, 2024
- 'Zombie Driver' Prompts Wild Police Chase From Venice Onto 405 that Ends in Crash - Los Angeles Magazine - May 20th, 2024
- What are zombie fires, and why are they becoming more common? - KXAN.com - May 20th, 2024
- "Zombie" Wildfires Force Thousands To Evacuate In Western Canada - DOGOnews - May 20th, 2024
- What exactly are 'zombie' fires, and how are they affecting wildfires this spring? - CBC News - May 20th, 2024
- The Case of the Zombie Ninjas - East County Magazine - May 20th, 2024
- Zombie' fires partially to blame for spring Canadian wildfires - NBC Connecticut - May 20th, 2024
- What are 'zombie fires'? - Fox Weather - May 20th, 2024
- Kill the zombie Space National Guard idea - Defense One - May 20th, 2024
- AIs Flirty Upgrade, Facebooks Zombie Internet, and Why We May Be Doing Mental Health Wrong - Crooked - May 20th, 2024
- What are zombie fires, and why are they becoming more common? - KTVI Fox 2 St. Louis - May 20th, 2024
- Zombie Cicadas taking over the trees... and your plate? - Gray DC - May 20th, 2024
- Canada's "zombie" wildfires threaten towns, send smoke into U.S. - Axios - May 20th, 2024
- 10 Best Zombie Movies of the 21st Century, Ranked - Collider - May 20th, 2024
- Zombie cicadas are taking over the trees... and your kitchen! - Gray DC - May 20th, 2024
- 'Zombie' entrepreneurs who can't afford to close down is on the rise in S.Korea - - May 20th, 2024
- The 10 best zombie games to play in 2024 - TechRadar - May 20th, 2024
- 'Zombie' house flippers discover the grisly past of Florida home - ABC Action News Tampa Bay - May 20th, 2024
- Resident Evil collides with Battlefield in this WW1 zombie horror - GAMINGbible - May 20th, 2024
- What is a zombie fire? | Latest Weather Clips - Fox Weather - May 20th, 2024
- What are 'zombie' fires, and why are they becoming more common? - MSN - May 20th, 2024
- Transformers' New Zombie Autobot Is a Sick Way to Treat the Hero Who Relaunched the Franchise - Screen Rant - May 20th, 2024
- #Showbiz: A clutch of zombie movies with bite - New Straits Times - May 20th, 2024
- 'Zombie' wildfires resurface in Canada, worsening US air quality - The Times of India - May 20th, 2024
- The Last of Us Season 2 First Look: Pedro Pascal and Bella Ramsey Return to Face the Zombie Apocalypse - Variety - May 20th, 2024
- On its 15th anniversary, Killing Floor stands as one of the best zombie shooters and the timing couldn't be more ... - VG247 - May 20th, 2024
- The HANDLING THE UNDEAD Trailer Imagines A Different Kind Of Zombie Movie - FANGORIA - May 9th, 2024
- Museum in Germany Finds Skeleton That May Have Been Considered a Zombie - Atlas Obscura - May 9th, 2024
- The Dead Don't Die Brilliantly References Bill Murray's Other Zombie Movie With 89% On RT - Screen Rant - May 9th, 2024
- Austin Butler's 2019 Zombie Movie Marked The End Of A Concerning RT Trend - Screen Rant - May 9th, 2024
- 'Quality and Diversity': From Zombie Apocalypse to 'Vengeful Quinceaera,' Blood Window Showcase Presents Six ... - AOL - May 9th, 2024
- Zombie Trainers and a New Era of Forced Labor - Newsweek - May 9th, 2024
- I Started A Zombie Outbreak In Undead Inc And I Regret Nothing - TheGamer - May 9th, 2024
- How to watch the Night of the Living Dead and all of George Romero's zombie movies - Popverse - May 9th, 2024
- The Cranberries' Zombie - the story behind the incendiary song - Louder - April 22nd, 2024
- Chris Riddell on the zombie Tory government falling apart at the seams cartoon - The Guardian - April 22nd, 2024
- Zombie grave dating back 4,200 years discovered in Germany, photos show - Miami Herald - April 22nd, 2024
- Steam zombie survival game leaves early access 11 years on, and you've got one week to get it cheap - PCGamesN - April 22nd, 2024
- "Zombie" cicadas with STDs are coming to Virginia - Axios - April 22nd, 2024
- Deathtroopers is the Star Wars zombie horror game I never knew I needed - PC Gamer - April 22nd, 2024
- Zombie Army VR Reveals The Story In Latest Trailer - Bleeding Cool News - April 22nd, 2024
- Where Infected "Zombie Cicadas" In The US Will Emerge In 2024 - TheTravel - April 22nd, 2024
- Zombie anti-abortion laws are menacing American women - The Hill - April 22nd, 2024
- Joe Manganiello to Zombie It Up in Mountain Man Adaptation - Reactor - Reactor - April 22nd, 2024
- Frozen Soul Covered White Zombie and It Rules - MetalSucks - April 22nd, 2024
- Arizona's abortion ban could bring zombie laws back to life in other states - Fast Company - April 22nd, 2024
- Arizona abortion ban shows the dangers of reviving zombie laws - MSNBC - April 22nd, 2024
- Zombie fires smoldering near Canadian oil and gas wells threaten production following 2023 wildfires - WorldOil - April 22nd, 2024
- You'll Never Guess Who Doesn't Want to Repeal a Zombie Abortion Ban - The New Republic - April 22nd, 2024
- Zombie Army VR: New trailer gives a glimpse of the gruesome campaign - MIXED Reality News - April 22nd, 2024
- Zombie Tests: Is the SAT Back From the Dead? - Fair Observer - April 22nd, 2024
- How likely are you to survive a zombie apocalypse in Connecticut? You may want to travel north - Hartford Courant - April 22nd, 2024
- Missouri Reports 162 New Cases Of Deer 'Zombie' Disease In 2023 - Lake Expo - April 22nd, 2024
- Zombie Fires Pose Looming Threat to Canada's Oil and Gas Infrastructure - OilPrice.com - April 22nd, 2024
- Rob Zombie Presenting House on Haunted Hill Soundtrack on Vinyl - ComicBook.com - April 22nd, 2024
- Take on Zombie Stormtroopers In This Star Wars Fan Game - IGN - April 22nd, 2024
- The Best Zombie Game of 2023 Has a New Expansion Out Now - Esports.net News - April 22nd, 2024
- Frozen Soul Debuts Frosty Rendition of White Zombie's 'Creature of the - Knotfest - April 22nd, 2024
- 'Dawn of the Dead' at 45: A Zombie Love Affair That Never Died - The New York Times - April 12th, 2024
- Hyper-sexual 'zombie cicadas' infected with bizarre STD fungus will emerge in US - New York Post - April 12th, 2024
- Zombie malls and other retail centers getting extreme makeovers to keep up with the times - Chicago Tribune - April 12th, 2024
- 'Zombie' drug xylazine found in cannabis THC vapes in UK - BBC.com - April 12th, 2024
- Taxing health insurance: The Republican zombie that refuses to die - Roll Call - April 12th, 2024
- Fungus-infected Zombie Cicadas with hypersexuality to emerge in the US this year: Expert - Hindustan Times - April 12th, 2024
- Zombie Classic Dawn Of The Dead Coming Back to Theaters for 45th Anniversary - MetalSucks - April 12th, 2024
- E-News | 'Zombie cicadas' infected with sexually transmitted fungus expected to emerge this year in parts of US - WVU ENews - April 12th, 2024
- Deadly Zombie Sedative Penetrating The U.K.s Illicit Drugs Market - Forbes - April 12th, 2024
- Seattle Police warn that base ingredient in 'zombie drug' tranq is being sold as standalone pill - FOX 13 Seattle - April 12th, 2024
- Opinion | Today's Opinions: Haunted by zombie law and thrown into abortion time-travel - The Washington Post - The Washington Post - April 12th, 2024
- Rob Zombie Teases 'House of 1000 Corpses' Book With Rare Photos, Original Script and More! - Bloody Disgusting - April 12th, 2024
- Zombie malls getting extreme makeovers to keep up with the times - Detroit News - April 12th, 2024
- 2000s Horror Fantasy Is One Of The Most Unique Takes On The Zombie Genre - Giant Freakin Robot - April 12th, 2024
- Mysterious 'Zombie Neurons' Unlock Secrets of Learning in The Brain - ScienceAlert - April 12th, 2024
- Zombie SKUs: What They Are, How They Work & Results - JumpFly PPC Advertising News - April 12th, 2024
- Arizona Reviving Its Zombie Abortion Ban Is Trump's Doing - The Cut - April 12th, 2024
- Hyper-sexual "zombie cicadas" that are infected with sexually transmitted fungus expected to emerge this year - CBS News - April 12th, 2024
- Should we be concerned about zombie cicadas? - WGN Radio - Chicago - April 12th, 2024
- You need to play this underrated zombie shooter before it leaves Xbox Game Pass - Digital Trends - April 12th, 2024
Reviewed and Recommended by Erik Baquero