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InvestHub.com's
Finance Dictionary and Glossary of Investment Terms

greater fool theory  

Definition 1.

Belief held by one who makes a questionable investment, with the assumption that he/she will be able to sell it later to a bigger fool.
 

Definition 2.

The theory that it is possible to make money by buying overvalued securities because there will almost always be someone else (a greater fool) who is willing to purchase these security at an even higher price.
 

Definition 3.

n 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.
 
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