| TERM OF THE DAY - APRIL 1, 2009 | |
| Greater Fool Theory | |
What Does it Mean?
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. | |
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Investopedia Says...
When acting in accordance with the greater fool theory, an investor buys questionable securities without any regard to their quality, but with the hope of quickly selling them off to another investor (the greater fool), who might also be hoping to flip it quickly. Unfortunately, speculative bubbles... Read more. | |
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| Related Terms | |
| Flipper | |
| Froth | |
| Fully Valued | |
| Overbought | |
| Overvalued | |
| See More... | |
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| Related Links | |
| The Greatest Market Crashes | |
| How Investors Often Cause The Market's Problems | |
| Stock-Picking Strategies: Fundamental Analysis | |
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