Market risks do not usually advertise themselves. They’re building quietly, beneath the surface – while everything still looks good on the outside.
This is exactly what legendary investor Louis Navellier believes is happening right now within the $3 trillion private credit market.
On Friday digest In Takeover, Lewis explains how years of easy money may have kept a growing number of companies alive—not because they were strong, but because financing was cheap and abundant. Now, with interest rates rising and conditions tightening, some of these companies may be a lot more fragile than they appear.
He calls them “zombie companies.”
Below, Lewis explains why this matters now, why June 30 could be a major inflection point, and how to spot warning signs before the market does.
He also lays out his full game plan – including which specific stocks he believes are most at risk, and where to rotate capital next – In a presentation you can watch here.
If Lewis is right, this is a risk that most investors won’t see clearly until it’s too late.
I’ll let him take it from here
I wish you a good evening,
Jeff Remsburg
Zombie-themed movies and TV shows are very popular, so you’re probably familiar with this pattern.
Many things seem normal. People go to work. Stores are open. life goes on.
But beneath the surface, something is wrong.
The infected are still walking around… still working… still integrating.
Until suddenly, they weren’t.
The same applies to some companies. From the outside, everything looks normal, but inside it’s rotting.
For many years, Sears seemed like a company still in business.
And technically, it was. Stores were open. The stock is still trading. The administration continued to promise transformation.
But in reality, business continuity was maintained through asset sales, financial engineering, and borrowed time.
This is what I call a “zombie company.”
And if you’re right about what’s going on in private credit, investors may suddenly discover that there are more of them than they realized.
In recent articles, I have He explained How the private credit market has evolved into a $3 trillion shadow banking system, and how investors can do so profit From the upcoming journey to quality – and why June 30 could be a possibility Judgment Day To this whole mess.
Why June 30? Because at this time many private credit instruments will have to inform investors of the true value of their property. If some of these loans are kept afloat through rollovers, restructuring, and wishful thinking, this could be the moment when much of this hidden pressure comes right to the surface.
Today, I want to focus on what this could mean for investors’ portfolios.
Because if this private credit story continues to play out, some stocks will be more vulnerable than others.
And trust me, you don’t want to be caught owning one of these if the private credit bubble starts to burst.
“Zombie” companies.
Zombie company is not always obvious at first glance.
On the surface, it may seem like a normal, efficient business. Maybe the revenue will still come in. The administration may still be speaking confidently. Wall Street may still be giving her the benefit of the doubt.
But beneath the surface, the story is completely different.
These are businesses that have been kept alive by easy money, cheap refinancing, and constant access to credit. They don’t really stand alone. They depend on lenders continuing to extend terms, roll over debt and stay in the game.
It worked for a long time.
But now the environment has changed.
Nearly 80% of private credit loans are variable rate, meaning they are at the mercy of prevailing interest rates.
This is a problem, because interest costs to borrowers rose as interest rates rose.
In many cases, loans that previously carried 4% to 5% interest now cost 12% to 15%. This is a huge jump, and puts serious pressure on companies that already benefit from leverage.
Now, for the full details on what’s happening in private credit – and what I think investors should do to protect themselves – you can learn more at My full presentation here.
Meanwhile, in the next installment of my interview series with InvestorPlace Editor-in-Chief Luis Hernandez, I explain why some “zombie” stocks could be particularly vulnerable if the private credit story continues to unravel… and what investors should be watching right now.
Click the play button below to watch my conversation with Lewis.
Are you pregnant with one of them?
Here is the most important part.
This is not just a story about private credit funds or some hidden corners of Wall Street.
It is also a story about public companies that relied on the easy money system to survive.
Some of them are directly related to private credit.
Others simply share the same warning signs: deteriorating fundamentals, mounting debt, weak institutional support, and business models that may not hold up well if financing conditions become tighter.
That’s why I created a special report entitled: Blacklist of shadow banks.
In it, I’ve identified 10 stocks that I think investors should be particularly cautious about right now.
These are the names that Nizami says appear particularly vulnerable if private credit cracks continue to spread. And if you own any, I think you need to know about them before the rest of Wall Street catches on.
In my full viewI explain why I believe these “zombie” companies could be in serious trouble if credit conditions continue to tighten. I’ll also show you where I think investors might want to reposition themselves when money starts moving toward higher quality businesses.
If you’d like more details on the 10 stocks that interest me most right now — and find out what I think investors should do next — I highly encourage you to do so Watch my full presentation now.
sincerely,
Louis Navellier
editor, Stock breakout
