Tag: finance

Zooming In

Sunday, March 09, 2025

I’ve begun to explore zombie companies—businesses that generate just enough revenue to keep operating and can service their debt but lack enough profitability to invest in growth or fully pay off their obligations. I’m learning that these companies may survive because of favorable economic conditions, like low interest rates.

I see some publicly traded companies labeled as potential zombies because they have persistent financial struggles (many of which trace back to economic disruptions in the COVID-19 era). Some “zombies” are Peloton, Beyond Meat, Carvana, and AMC Entertainment. Their futures are uncertain, however, as restructuring efforts or shifts in market conditions could turn things around.

I work part-time in a retail department store and see firsthand the mounting pressures on the retail sector, from shifting consumer behavior to evolving business needs. Many zombie retail companies might be teetering even more on the edge in today’s volatile political and economic climate.

I often think of this as a chainsaw environment—a ruthless, high-stakes reality shaped by national leadership. It threatens the broader retail industry and deepens consumers’ personal financial anxieties.

This chainsaw environment—defined by high interest rates, tightened credit conditions, and changing consumer habits—poses a grave risk to zombie companies, particularly in retail. While some large retailers survive in times of cheap debt, rising borrowing costs erode their ability to remain afloat.

Tight economic conditions affect everything. They may force a zombie business into bankruptcy, like Bed Bath & Beyond, or force one simply to disappear. Economics certainly influences our personal comfort as consumers.

My retail experience teaches about a brutal industry. A retail company’s survival depends on its adaptability, capital availability, and market confidence. Unless economic conditions shift favorably—or they secure an external bailout—today’s struggling retail businesses may run out of time.

Dear Friends: Witnessing chaos reduces spending, and we worry about our jobs. Diana

Murky World

Tuesday, March 04, 2025

I worry about today’s stock market because it’s unpredictable and volatile in these early weeks of DJT’s Administration. I like it to behave like a crystal ball, which tells us where the economy is headed. But now, I’m not sure it’s predictive or reacting to what’s already happened, and it’s clueing more confusing volatility ahead.

The stock market reacts in real time. It declines before a recession occurs as investors sell off stocks while detecting hints of slowing growth, tightening monetary policies, and/or shifts in consumer behavior. The stock market responds to political shifts, too, by slumping or rallying.

That’s getting to me right now. The market is reacting wildly to quickly fluctuating employment numbers, worries about inflation, and potential GDP growth. This market is responding instead of predicting.

Its shiftings aren’t based on complex data; they are deeply influenced by investor psychology—fear, optimism, herd behavior, and media narratives. Enough investors believing a downturn is coming and starting to sell may create the crisis they fear.

Financial news sensationalizes markets. Negative headlines spark panic selling and hype, inflating a bubble. The market has predicted recessions that never happened and failed to see crises coming (e.g., the 2008 financial crisis blindsided many).

I struggle to view this market’s potential in light of today’s political complexities. I remind myself to avoid reacting emotionally to daily swings and instead focus on long-term trends. In today’s short-term “noise,” it’s complicated to strategize or know what “proper diversification” currently may mean. (Here’s an instructive fact: Warren Buffet has elected to sit on piles of real cash.)

The market may hint at the future, but it isn’t infallible. I am trying to remain rational and prepared. Today’s volatility may signal a future downturn or reflect much current uncertainty. That remains to be seen.

So, I uncomfortably watch as the stock market predicts, reflects, and seems heavily psychological. The best a small investor can do is be informed, rational, and prepared. Here’s the catch: a stock market isn’t just about numbers, it’s about people—and people are anything but predictable.

Dear Friends: America’s governing body is behaving unpredictably, on steroids. Diana