By Kim Iskyan
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The best word to sum up these situations? Stranded . In the investment world, a “stranded asset” – the money equivalent of cooling your heels on a chilly airport floor, or a beached boat left for the vultures – is a resource that at one time produced income or held value but no longer does. It’s experienced an unexpected (or earlier- than-expected) write-down or collapse in value – and perhaps it’s gone from being an asset (worth something) to being a liability (costing you something). An asset can become stranded due to some kind of external change in technology, markets, policy, society, litigation, or something such as climate change.
See if you can guess the common theme in these scenarios... Your plane lands in Denver, and your connecting flight is canceled just as the snowstorm of the century moves in. So you’re stuck and snowbound as the entire airport is closed down for days... A crippled boat topples over on the cracked thirsty earth, on what used to be the shores of the Aral Sea – before an endless drought and aggressive agriculture practically drains the world’s fourth-largest lake... Around $900 billion worth of energy assets which, according to the Financial Times , could “evaporate” if governments move more aggressively to reduce carbon emissions (more on this below)... If you answered that each of these scenarios is a cocktail of desperation and hopelessness, blended with isolation and served with a side of loss and despair, you are correct! (Sorry, you win nothing, except this informational and entertaining story... keep reading.)
An asset can become stranded due to some kind of external change in technology, markets, policy, society, litigation, or something such as climate change.
American Consequences
15 American Co s quences 15
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