You ever heard the phrase zombie companies?

Let me explain to what zombie companies are.

These are companies that are making enough money to pay their bills,

pay their debt payments, but not enough to invest into growth.

In other words, these are companies that should be going out of business.

They're hanging on to somebody else's market share

that this other company could do better job and by the way why are they still

around because today according to Bloomberg Total Return Index 18% of

companies are part of zombie companies today.

Barely making it. Some big names you need to know about.

You know what it was in 1997? Only 1%. We went from 1% in 1997. That's 25, 26 years ago, to 18%.

That's an increase of 1,700% growth in companies that don't make money, barely pay their bills,

don't reinvest. Why are these still around?

We're going to talk about that today and why you should know about that today. Okay, so if you give value out of this video, give it a thumbs up and subscribe to the channel.

So the whole concept of zombie companies was started in Japan called a lost decade. This concept

originated in Japan during the 90s following the collapse of the country's

asset price bubble. These companies were characterized by heavy reliance on bank financing

to remain operational meaning if I don't get any loan I can meet my expenses I'm

going out of business number two inefficiency and poor performance number three

inability to generate sufficient earnings to cover operating costs and debt obligations.

Now here's a kicker. The cause, the reason for so many zombie companies was attributed to forbearance by banks that are unwilling to let borrowers

fill. You know the sole concept of too big to fail they're like no no no no we can't let

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