Most financial terms are as boring as the local evening news, but today's Financial Lexicon entry, zombies, is definitely not boring. I mean, they're the living dead, it's okay to bash their skulls in, and they even harrass people on Valentine's Day--what's not to love?
Investing in zombies--that's what's not to love. If you invest in a zombie company--defined by investopedia.com as, a company "that continue[s] to operate even though they are insolvent or near bankruptcy"--you're asking to be dragged down by a horde of cavorting corpses and devoured.
Zombie stocks are very volatile and risky, because most zombie companies go bankrupt due to high operational costs from research and development with no guarantee that the final product will be marketable or profitable.
Investing in a zombie company is a classic example of "speculative investment." If you can afford to dabble in some high-risk investments, and you've done some thorough research, investing in a zombie company could pay off. Just don't blame me if the zombie apocalypse overtakes your hard-earned cash.
--Jens
Photo taken from this photostream and used with permission of a Creative Commons license.
How informative and also scary...now when I have money to invest in stocks I will definitely not invest in the undead (which would have been my first natural inclination) thanks to this post. Please keep me updated on all future zombie or zombie-related findings.
LeBaron,
I'm glad I scared you. Wasting your money on zombie stocks is almost as foolish as attacking a zombie with your bare hands.
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