greater fool theory


greater fool theory
 The idea that there is always someone willing to pay a higher price.
 ► “When stocks are selling a 100 times or infinite times earnings they are depending on the greater fool theory.” (Scott Black, on Wall Street Week, Nov. 3, 1995)

American business jargon. 2014.

Look at other dictionaries:

  • Greater fool theory — The greater fool theory (sometimes the bigger fool theory, also called survivor investing) is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to a bigger fool ; in other… …   Wikipedia

  • Greater Fool Theory — A theory that states it is possible to make money by buying securities, whether overvalued or not, and later selling them at a profit because there will always be someone (a bigger or greater fool) who is willing to pay the higher price. When… …   Investment dictionary

  • greater fool theory — noun The theory of making money by buying something for the sole reason of selling it to someone else for a higher price …   Wiktionary

  • greater fool theory — An investment notion that even when a stock is fully valued by conventional standards, there is room for upward movement because there are enough buyers to push prices farther upward purely on speculation or hype. Bloomberg Financial Dictionary …   Financial and business terms

  • Economic bubble — An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is trade in high volumes at prices that are considerably at variance with intrinsic values… …   Wikipedia

  • Stock — For capital stock in the sense of the fixed input of a production function, see Physical capital. For other uses, see Stock (disambiguation). Financial markets Public market Exchange Securities …   Wikipedia

  • Equity investment — generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of… …   Wikipedia

  • Ponzi scheme — A Ponzi scheme is a fraudulent investment operation that involves promising or paying abnormally high returns ( profits ) to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business …   Wikipedia

  • Tulip mania — A tulip, known as the Viceroy , displayed in a 1637 Dutch catalog. Its bulb cost between 3000 and 4200 florins depending on size. A skilled craftsman at the time earned about 300 florins a year.[1] Tulip mania or tulipomania (Dutch names include …   Wikipedia

  • Bagholder — The term bagholder is an informal slang term used in U.S. financial markets to refer to the shareholders left holding shares of worthless stocks. [cite web|title=Stockholders, Stakeholders, and Bagholders|url=http://papers.ssrn.com/sol3/papers.cfm… …   Wikipedia